Electronics Production | December 08, 2010
EU fines six LCD makers over cartel
The European Commission has fined six LCD panel producers a total of €648 925 000 for operating a cartel which harmed European buyers of television sets, computers and other products that use the key Liquid Crystal Display component.
The six are Samsung Electronics and LG Display of Korea and Taiwanese firms AU Optronics, Chimei InnoLux Corporation, Chunghwa Picture Tubes and HannStar Display Corporation. Samsung Electronics received full immunity from fines under the Commission's leniency programme, as it was the first to provide information about the cartel. Article 101 of the EU Treaty prohibits price-fixing and other practices restrictive of competition. "Foreign companies, like European ones, need to understand that if they want to do business in Europe they must play fair. The companies concerned knew they were breaking competition rules and took steps to conceal their illegal behaviour. The only understanding we will show is for those that come forward to denounce a cartel and help prove its existence," said Commission Vice President in charge of competition policy Joaquín Almunia. Today the Commission fined six producers of liquid crystal display (LCD) panels a total of €648 925 000 for operating a cartel between October 2001 and February 2006. LCD panels are the main component of thin, flat screens used in televisions, computer monitors and electronic notebooks. The companies are Samsung Electronics and LG Display of Korea and Taiwanese firms AU Optronics, Chimei InnoLux Corporation, Chunghwa Picture Tubes and HannStar Display Corporation. During the four years, the companies agreed prices, including price ranges and minimum prices, exchanged information on future production planning, capacity utilisation, pricing and other commercial conditions. The cartel members held monthly multilateral meetings and further bilateral meetings. In total they met around 60 times mainly in hotels in Taiwan for what they called "the Crystal meetings". These agreements had a direct impact on customers in the European Economic Area because the vast majority of televisions, computer monitors and notebooks incorporating those LCD panels and sold in the EEA comes from Asia. The investigation gathered by the Commission shows that the companies were aware they were breaking competition rules and took steps to conceal the venue and results of the meetings. A document requested everybody "to take care of security/confidentiality matters and to limit written communication" reminding of the DRAM investigation started in 2002 and concluded in May 2010. The Commission faced the companies with a Statement of Objections on May 2009 on which they had the opportunity to comment and be heard and after which the Commission reduced the proven duration of the infringement by four months. The fines In setting the level of the fines, the Commission took into account the companies' sales of the products concerned in the EEA, the very serious nature of the infringement, its EEA-wide scope and its duration. Samsung Electronics received full immunity under the Commission's 2002 Leniency Notice, as it brought the cartel to the Commission's attention and provided valuable information to prove the infringement. The fines of the following undertakings were also reduced for their cooperation with the Commission: LG Display (50%), AU Optronics (20%) and Chunghwa Picture Tubes (5%). Besides this reduction LG Display also received a full reduction of fine for its participation in the cartel in 2006, as it was the first company to bring forward evidence showing that the cartel continued after 2005 (so-called "partial immunity"). None of the companies met the conditions for a reduction of the fine under paragraph 35 of the Commission's 2006 Guidelines on Fines (inability-to-pay claims). Two had applied. The individual fines are as follows: - Samsung Electronics: EUR 0 - LG Display: EUR 215'000'000 - AU Optronics: EUR 116'800'000 - Chimei InnoLux Corporation: EUR 300'000'000 - Chunghwa Pictures Tubes: EUR 9'025'000 - HannStar Display Corporation: EUR 8'100'000