Royal Philips Electronics NV (PHIA) and LG Electronics Inc. (066570) are among companies fined a record 1.47 billion euros ($1.9 billion) by European Union antitrust regulators over price-fixing deals on now-obsolete cathode-ray tubes used in televisions and computer monitors.
Philips was fined 313.4 million euros, while LG faces a 295.6 million-euro penalty, the European Commission said in a statement today. Philips and LG also share a fine of 391.9 million euros for a unit they jointly owned. Panasonic Corp. (6752) was fined 157.5 million euros and shares an 86.7 million-euro punishment with Toshiba Corp. and MTPD, a Panasonic unit. Panasonic and MTPD also share a 7.9 million-euro fine.
“These tubes accounted for 50 to 70 percent of the price of a screen,” EU Competition Commissioner Joaquin Almunia told reporters. “This gives an indication of the serious harm that these cartels have caused over a decade, both to the manufacturers of TVs and computers and ultimately to final consumers who had to pay a higher price than they should have.”
The companies’ agreements sought to halt the slide in sales of cathode-ray tubes after customers switched to slimmer liquid- crystal and plasma display sets, Almunia said. Antitrust watchdogs in the EU, Japan and South Korea raided companies in 2007 over concerns they colluded to fix prices. Philips and Technicolor SA (TCH), previously known as Thomson SA, received objections in the EU probe in 2009.
Joost Akkermans, a spokesman for Amsterdam-based Philips, said the fine was “disproportionate and unjustified” and related to a unit it divested in 2001. Philips will appeal the EU decision, he said in a telephone interview.
The fines exceed an earlier record of 1.38 billion euros imposed by the EU in 2008 on makers of glass for car windows.
Meetings among the companies’ top management in Asia and Europe to fix prices were often followed by a golf game, the EU said in statement. The firms fixed prices, shared markets, allocated customers between themselves and restricted their own output in two worldwide cartels between 1996 and 2006.
Samsung SDI Co. Ltd., an affiliate of Samsung Electronics Co. Ltd., was also told to pay 150.8 million euros. Toshiba was separately fined 28 million euros and Technicolor was fined 38.6 million euros. Chunghwa Picture Tubes (2475) Ltd. wasn’t punished because it was the first to inform regulators of the cartel (EUGNEMUQ:US).
Technicolor fell as much as 2.7 percent in Paris trading after it said in a statement that it would seek a payment schedule from EU regulators for the fine. The fine will be booked as a one-off item for the second-half of 2012, it said. It sold its cathode-ray unit in 2005.
The EU decision is “factually and legally erroneous as it applies to Panasonic and MTPD,” said Keiichiro Yoshida, a spokesman for Osaka-based Panasonic. The company will carefully review the decision and consider options for an appeal, he said in an e-mail.
“Toshiba believes that the European Commission’s conclusions are unfounded, and is currently considering appealing the decision to the European General Court,” said Toru Ohara, a spokesman for the Tokyo-based company.
Ken Hong, a spokesman for LG in Seoul, said the company would comment after it has reviewed the EU decision. Samsung SDI didn’t immediately respond to an e-mail seeking comment outside normal business hours in South Korea.
Samsung SDI, Philips and Technicolor received reductions to their fines for cooperating with the investigation, the EU said.
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