Samsung, Philips, Infineon fined millions over chip price fixing

Samsung, Philips and Infineon Technologies get slammed by the European Commission for allegedly fixing the price of chips used in SIM cards.

Smart-card chips are used in bank cards, passports, pay TV cards and other appliances requiring memory. Donald Bell/CNET

Infineon, Samsung and Philips have been fined a total of 138 million euros ($181.33 million) following a European antitrust investigation.

European Union antitrust regulators issued the fine Wednesday. EU officials allege that the companies were involved in a price-fixing scheme for chips used in mobile SIM cards.

According to the European Commission, which began the investigation in 2008, Infineon, Philips, Samsung and Renesas (at the time a joint venture between Hitachi and Mitsubishi) colluded between September 2003 and September 2005 to fix the price of smart-card chips in Europe. The companies all allegedly coordinated their market behavior to control the price of these chips, which are also used in bank cards, passports, pay TV cards and other appliances requiring memory capabilities.

The governing body says the companies involved in the alleged cartel colluded through a network of bilateral contacts, and discussed commercial information on pricing, contracts and production capacity in order to "determine their respective responses to customers' requests to lower prices." These activities are against Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA), which prohibit cartels and anticompetitive business practices.

Renesas has been shown leniency by the commission and now enjoys full immunity, as the joint venture revealed the cartel's existence to EU watchdogs.

Commission Vice President Joaquín Almunia, said:

In this digital era smart-card chips are used by almost everybody, whether in their mobile phones, bank cards or passports. It is crucial that the companies producing them focus their efforts on how to outperform their competitors by innovating and providing the best products at the most attractive prices. If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions.

In total, Infineon must pay 82.8 million euros ($108.80 million), Philips has been fined 20.15 million euros ($26.48 million), and Samsung received a 30 percent reduction in fines for cooperating and so has been fined 35.12 million euros ($46.15 million). Because Renesas alerted the EU authority to the existence of the alleged cartel, the joint venture escaped paying more than 51 million euros ($67.01 million).

Philips denies the price-fixing allegations and plans to appeal the decision.

The companies attempted to settle the case for a 10 percent reduction in fees, but the talks broke down last year without resolution.

This story originally appeared as "Samsung, Philips, Infineon fined 138m euros over chip price fixing" on ZDNet.

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