Bloomberg News

Philips Claims Antitrust Immunity as EU Targets CD, DVD Drives

July 24, 2012

Royal Philips Electronics NV (PHIA) said it was granted immunity from fines after the European Union sent makers of CD and DVD drives formal antitrust complaints over claims they colluded globally to fix prices.

Philips won’t be punished by the European Commission conditional on its continued cooperation with the investigation, according to an e-mailed statement from Joost Akkermans, a spokesman for the Amsterdam-based company.

The commission, the EU’s Brussels-based antitrust authority, said it sent statements of objections to 13 companies for colluding to rig bids for at least five years over optical disk drives sold to two manufacturers of personal computers and servers. It didn’t name the suppliers or the customers.

“The commission has concerns that those suppliers may have coordinated their behavior in bidding events organized by two major original equipment manufacturers,” the EU said in a statement. “This behavior, if established, may have ultimately affected customers that bought optical disk drives manufactured by the companies concerned.”

Hitachi-LG Data Storage agreed in the U.S. last year to plead guilty and pay a $21.1 million fine for colluding with others to rig bids and fix prices for optical drives to be sold to Dell Inc. (DELL:US), Hewlett-Packard Co. (HPQ:US) and Microsoft Corp. (MSFT:US) Sony Corp. (6758) and Toshiba Corp. have said the U.S. Justice Department sought information from them over the drives. Hitachi-LG is a joint venture of Tokyo-based Hitachi Ltd. (6501) and Seoul-based LG Electronics Inc. (066570)

U.S. Lawsuit

Sony, Hitachi, Samsung Electronics Co. (005930), LG Electronics Inc. and Toshiba are being sued for compensation by purchasers in a U.S. lawsuit. A judge ruled in 2010 that the case could proceed while the U.S. government pursues its criminal probe. Toshiba Samsung Storage Technology Corp. and Hitachi-LG Data Storage Inc., both joint ventures, and Philips Lite-On Digital Solutions Corp. were also named in the court filings.

Daniela Karthaus, a spokeswoman for Hitachi’s European unit based in Maidenhead, west of London, declined to immediately comment. Beth Robins, a spokeswoman for LG’s U.K. press office also declined to immediately comment.

Sylvia Shin, a spokeswoman for Sony Europe, declined to immediately comment. Toshiba and Samsung didn’t immediately respond to an e-mail seeking comment.

Optical disk drives include CD-ROM, CD-RW, DVD-ROM and DVD- RW. They use laser light or electromagnetic waves to read data.

The EU can fine companies as much as 10 percent of yearly sales for operating a cartel to fix prices. Companies can defend themselves in writing or seek an oral hearing before the commission makes any decision on fines.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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