EU slaps huge fine on South Korea, Taiwan LCD cartel

Dec 08, 2010

The European Commission has imposed 649 million euros in fines on South Korean and Taiwanese electronics firms for secretly fixing prices of LCD flat screens for Europe's TVs and computers.

A number of the companies indicated that they might appeal.

The fines, worth 860 million dollars, were slapped Wednesday on Taiwan's AU Optronics, Chimei InnoLux Corporation, Chunghwa Picture Tubes and HannStar Display Corporation along with South Korean firm LG Display.

The leader in the LCD business, South Korea's Samsung Electronics, was also accused of being part of the cartel but escaped cash sanctions for coming forward first with information on the alleged scheme.

"Foreign companies, like European ones, need to understand that if they want to do business in Europe they must play fair," European competition commissioner Joaquin Almunia said in a statement.

"The companies concerned knew they were breaking competition rules and took steps to conceal their illegal behaviour," he said.

Europe's competition watchdog accused the firms of running a cartel between October 2001 and February 2006 that fixed prices, harming European buyers of televisions and computers equipped with liquid crystal displays.

The companies held monthly meetings to agree on price ranges and minimum prices, and traded information on future production planning, capacity utilisation, pricing and other commercial conditions, the commission said.

Company officials met 60 times, mainly in hotels in Taiwan, for what they dubbed "the Crystal meetings," the regulator said.

"The fact that the cartel meetings took place outside the EU is no excuse," Almunia told a news conference, saying the group was "very well organised."

The investigation found that the companies knew they were breaking competition rules and took steps to conceal their meetings.

The commission cited a document urging everybody "to take care of security/confidentiality matters and to limit written communication."

Chimei InnoLux faces the largest fine, 300 million euros, followed by 215 million euros against LG Display.

AU Optronics was fined 116.8 million euros, followed by nine million euros for Chunghwa Picture Tubes and 8.1 million euros for HannStar Display.

Reacting on Thursday, South Korea's LG Display said in a statement it "acknowledges the wrongful acts of the past" and respects the European Commission's regulatory authority.

"However, LG Display may, after careful review and consideration, appeal today's decision to the EU General Court if it finds there were procedural or substantive due process issues with the investigation."

LG Display said it had taken comprehensive measures to avoid repetition of such "mistakes" and reaffirmed its commitment to high ethical standards.

Taiwan's AU Optronics (AUO) said it would appeal in the General Court in Luxembourg in a statement to the Taiwan Stock Exchange.

The other Taiwanese firms said they were considering whether to appeal, while the fines were not expected to have a major impact on their operations.

The European Commission said Wednesday that the cartel had a direct impact on European consumers because "the vast majority" of televisions, computer monitors and electronic notebooks with LCD panels that are sold in Europe come from Asia. The market was worth more than seven billion euros over the period that the cartel existed.

At the same time that the European Commission opened its investigation in late 2006 other competition regulators in the United States and Asia did the same.

LG and Chunghwa, along with Japanese firm Sharp, pleaded guilty in the United States and were fined a total of 585 million dollars in November 2008. LG was hit with the harshest penalty, of 400 million dollars.

The European Commission cracked down on seven cartels this year, imposing nearly three billion euros in total fines.

Explore further: EU Parliament votes to break up Google

add to favorites email to friend print save as pdf

Related Stories

EU fines Samsung, nine other chip makers over cartel

May 19, 2010

The EU Commission fined the world's biggest memory chip makers, including Samsung, Infineon and Toshiba, a total of 331 million euros (403 million dollars) on Wednesday for operating a cartel.

EU antitrust regulators charge LCD panel makers

Jul 13, 2009

(AP) -- European Union antitrust regulators have charged Royal Philips Electronics NV and LG Display with fixing the price of liquid crystal display monitors, Philips said Monday.

Head of Taiwan LCD maker barred from leaving US

Aug 23, 2010

(AP) -- The chief executive of a leading Taiwanese LCD screen maker has been barred from leaving the U.S. during a U.S. Justice Department probe into alleged price-fixing, the company said.

Recommended for you

EU Parliament votes to break up Google

Nov 27, 2014

The European Parliament voted overwhelmingly for the break-up of Google Thursday in a largely symbolic vote that nevertheless cast another blow in the four-year standoff between Brussels and the US Internet ...

Toyota finds new air bag issue, recalls more cars

Nov 27, 2014

Toyota Motor Corp. recalled more than 40,000 vehicles in Japan on Thursday as part of a worldwide scare over defective air bags and is investigating a new type of air bag problem that could lead to further recalls.

Netflix sues Yahoo CIO for alleged kickbacks

Nov 26, 2014

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.