The European Commission imposed the biggest antitrust penalty in its
history on Wednesday, fining six firms including Philips, LG Electronics
and Panasonic a total of 1.47 billion euros for running two cartels for
nearly a decade.
The Commission said executives from the European and
Asian companies met until six years ago to fix prices and divide up
markets for TV and computer monitor cathode-ray tubes, technology now
mostly made obsolete by flat screens.
Between 1996 and 2006 they
met in Paris, Rome, Amsterdam and in Asia for "green meetings",
so-called because they often ended in a round of golf.
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 EU antitrust
regulator imposed the biggest penalties on Philips for its role in the
price fixing and carving up of markets. The Dutch-based firm was fined
313.4 million euros and faces a further penalty through a joint venture.
Chief Executive Frans van Houten said the group would challenge what he
called the disproportionate and unjustified penalty.
Electronics of South Korea must pay 295.6 million euros plus its share
of a joint venture penalty, followed by Panasonic Corp which was fined
The Japanese firm said it might also make a legal
challenge. "Panasonic believes the EU decision is factually and legally
erroneous and will carefully review the decision and consider our
options for appeal to the European courts," it said.
Commission also fined Samsung SDI 150.8 million euros, Toshiba Corp. 28
million euros, and French company Technicolor 38.6 million euros.
joint venture between Philips and LG Electronics was penalised 391.9
million euros while two Panasonic joint ventures were also sanctioned.
said the violations were especially harmful for consumers, as
cathode-ray tubes accounted for 50 to 70 percent of the price of a
Cathode-ray tubes have largely been replaced by more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.
Philips sold off
the business which committed the infringement in 2001 but said it would
make a provision of 509 million euros in the fourth quarter for the
ING analyst Fabian Smeets told ANP-Reuters that the sanction
was significant, but had been expected. Philips' shares were down 0.82
percent to 19.93 euros at late afternoon, erasing earlier gains after
news of the fines.
Technicolor said the fine, which will be booked
as an exceptional item in its second-half accounts, would not affect
its 2012 earnings and free cash flow targets.
Until now, the
Commission's biggest antitrust penalty had been a 1.38 billion euro fine
imposed on participants in a car glass cartel in 2008.
Commission's sanctions followed a total fine of 128.74 million euros
levied last year against four producers of the glass used in cathode-ray
Chunghwa Picture Tubes, Samsung Electronics, LG Display
and three other LCD companies were penalised a total 648 million euros
two years ago for taking part in a cartel.
© Thomson Reuters 2012