EU imposes $1.9 billion cartel fine on screen producers

BRUSSELS – The European Union on Wednesday imposed its biggest ever cartel fine of almost €1.47 billion ($1.96 billion) on seven companies for fixing the market of television and computer monitor tubes.

The EU’s Commission ruled that, for a decade ending in 2006, the companies — including Philips, LG Electronics and Panasonic — artificially set prices, shared markets and restricted their output at the expense of millions of consumers.

EU antitrust Commissioner Joaquin Almunia said that the companies’ actions “feature all the worst kinds of anticompetitive behaviour that are strictly forbidden to companies doing business in Europe.”

Tubes were the essential part of television screens and computer monitors before they were replaced by LCD and plasma flatscreens. The cathode ray tubes accounted for up to 70 per cent of the cost of a screen, the Commission said.

Alumina added that the tubes’ cost gave “an indication of the serious harm” the companies had caused. “There are victims: millions and millions of citizens.”

Philips and LG Electronics, which acted jointly and separately, were fined a combined €999 million ($1.3 billion) with Panasonic punished with a €157 million ($205 million) fine, adding to more if combined fines and affiliates were included.

Despite its co-operation with the Commission probe, Philips said in a statement it planned to appeal the fine since it considered it “disproportionate and unjust.”

“We regret that we are linked to this kind of behaviour,” said Philips CEO Frans van Houten.

LG Electronics said it would only react after studying the decision.

Other companies fined were Samsung SDI, Technicolor, MTPD and Toshiba. Chunghwa of Taiwan escaped fines as it was the first to reveal the cartel to the EU.

“It is the biggest fine for a cartel, ever,” Almunia said. The fine exceeded the previous record of the 2008 fine of €1.38 billion ($1.8 billion) in a car glass cartel.

Almunia said the tubes cartel operated worldwide with the companies involved fully realizing they acted illegally.

One document seized by the Commission had a warning “Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission”.

Another documents said “Please dispose the following document after reading it”.

Even when the tube market went into a decline with the advent of flatscreens, the cartel made sure profits through production controls.

“Instead of competing with each other to innovate and provide the best product at the best price, they chose to conspire to artificially maintain returns in a declining technology market,” Almunia said. “This is why we fight cartels.”

The Commission started its probe with an antitrust raid on the companies in November 2007. Almunia said U.S. authorities were currently investigating the case as well.


Mike Corder in The Hague and Sam Kim in Seoul contributed to this article.


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