Record €1.47 bn fine for Philips, LG and Samsung

The European Commission imposed the biggest antitrust penalty in its history yesterday, fining six firms including Philips, LG Electronics and Samsung SDI a total €1.47 billion 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.

The EU antitrust regulator imposed the biggest penalty of €313.4 million on Dutch-based Philips for its role in fixing prices and carving up markets. LG Electronics of South Korea must pay the second biggest fine, set at €295.6 million.

“These 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.

Taiwanese firm Chunghwa Picture Tubes blew the whistle on the cartels in TV and computer monitors and escaped a fine.

The Commission also fined Panasonic Corp €157.5 million, Samsung SDI €150.8 million, Toshiba Corp €28 million, and French company Technicolor €38.6 million. A joint venture between Philips and LG Electronics was penalised €391.9 million while two Panasonic joint ventures were also sanctioned.

Almunia said the violations were especially harmful for consumers, as cathode-ray tubes accounted for 50 to 70 per cent of the price of a screen. Cathode-ray tubes have largely been replaced by more advanced display technologies such as liquid-crystal display, plasma display and organic light-emitting diodes.

Philips said it would make a provision of €509 million in the fourth quarter for the fine, but chief executive Frans van Houten also said the group would challenge what he called the disproportionate and unjustified penalty. Philips sold off the business which committed the infringement in 2001.