updated 04:32 pm EST, Wed December 5, 2012
Record fine for manufacturers in decade-long cartel
The European Commission has fined seven electronics manufacturers 1.47 billion euro ($1.92 billion) for price fixing, in what has been described as "textbook cartels". Philips, LG, Samsung, and others were fined for their parts in cathode ray tube (CRT) price cartels for televisions and computer monitors, that lasted between 1996 and 2006.
The investigation found that top level management meetings, called "green(s) meetings" by cartel members due to using gold courses as meeting locations, designed the cartels themselves, while lower level meetings took place to implement and manage the cartels themselves. Meetings reviewed demand, production, and sales in key regions, followed by discussions on prices for individual TV and computer manufacturers, and usually ended up pushing the prices up far higher than they should have been in a normal market.
Documents found in the investigation showed the companies involved as knowing they were breaking the law, with warnings in paperwork including "Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission," and "Please dispose the following document after reading it."
Chunghwa received full immunity for whistle-blowing, escaping almost 17 million euro ($22 million) fines. Of those fined, Samsung was hit for 150 million euro ($196 million), LG for 295 million euro ($385 million), and Philips had the heaviest penalty of 313 million euro ($409 million).
Commission Vice President in charge of competition policy Joaquin Almunia said the cartels "feature all the worst kinds of anticompetitive behaviour that are strictly forbidden to companies doing business in Europe." With CRTs accounting for between 50 and 70-percent of a screen's price it "gives an induction of the serious harm this illegal behaviour has caused both to television and computer screen producers in the EEA."
The findings of the investigation and eventual results mirror a similar case for LCD manufacturers, over a fixing cartel that took place in Europe between 2001 and 2006. Fines the equivalent of $856 million were levied against LG, Samsung, Chunghwa and others for the same controlling of parts essential to monitor and television construction.