TV, computer screen cartel hit with record EU fine

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Philips, LG Electronics, Samsung SDI and three other firms were fined a record €1.47 billion by EU antitrust regulators on Wednesday (5 December) for fixing prices of TV and monitor cathode-ray tubes for nearly a decade.

 

The European Commission slapped the biggest penalty, of €313.4 million, on Dutch-based Philips. LG Electronics came in second with a €295.6 million fine.

The EU competition authority fined Panasonic Corp €157.5 million, Samsung SDI €150.8 million, Toshiba Corp. €28 million, and French company Technicolor €38.6 million.

Two Panasonic joint ventures were also fined. Taiwanese firm Chunghwa Picture Tubes blew the whistle on the cartels in TV and computer monitors and escaped a fine.

Philips announced that it will take a provision of €509 million in the fourth quarter this year to cover the fine, saying it intends to appeal the decision by the EU's antitrust authorities.

"We believe that the fine which relates to a business that has been divested in 2001 is disproportionate and unjustified," the company said in a statement.

The two cartels, one involving TVs and the other computer monitors, operated worldwide between 1996 and 2006, during which company executives discussed how to fix prices and share markets at "green meetings", so-called because the events often ended with a round of golf.

"These cartels for cathode ray tubes are 'textbook cartels': they feature all the worst kinds of anti-competitive behaviour that are strictly forbidden to companies doing business in Europe," EU Competition Commissioner Joaquin Almunia said in a statement.

The companies were well aware they were breaking the law, the Commission said. "For instance, in a document found during the Commission's inspections, a warning goes as follows: 'Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission'," the EU executive noted.

He said the violations were especially harmful for consumers, as cathode ray tubes accounted for 50 to 70% of the price of a screen.

Cathode ray tubes have largely been replaced by more advanced display technologies such as liquid-crystal display (LCD), plasma display and organic light-emitting diodes.

The biggest fine prior to the cathode-ray tube cartel was €1.38 billion imposed on participants in a car glass cartel in 2008.

The Commission's sanctions followed a total fine of €128.74 million levied last year against four producers of the glass used in cathode-ray tubes.

And Chunghwa Picture Tubes, Samsung Electronics, LG Display and three other LCD companies were penalised a total €648 million two years ago for taking part in a cartel.

Positions: 

BEUC, the European Consumer Organisation, welcomed the Commission's cartel-busting efforts but said it provided "only half a solution" to cartels.

A much more effective remedy, BEUC said, is to enable consumers to be able to take collective claims to court.

"At the end of today, not a euro cent will be seen by the most important parties to this – the victims themselves. The Commission is due in coming weeks make a final decision whether or not to introduce such a system for collective private damages claims. The TV cartel needs to be final proof that it is long overdue," said Monique Goyens, BEUC director general.

"15 EU countries have some form of collective actions system. Europe needs to act to ensure this should be open to all European consumers. Fines are often written off by companies as the cost of doing business. Therefore these practices keep repeating and consumers continue to lose out. If we want to clean up such practices in the Europe’s Single Market, then collective actions are critical."

"Companies should be held to account and compensate consumers for illegal profit," Goyens said.

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