EU imposes record 1.47 billion euro cartel fine on Philips, 5 others

BRUSSELS Wed Dec 5, 2012 7:52pm IST

The logo of Philips is seen at the company's entrance in Brussels September 11, 2012. REUTERS/Francois Lenoir/Files

The logo of Philips is seen at the company's entrance in Brussels September 11, 2012.

Credit: Reuters/Francois Lenoir/Files

Related Topics

Stocks

   

BRUSSELS (Reuters) - The European Commission imposed the biggest antitrust penalty in its history on Wednesday, fining six firms including Philips, LG Electronics and Samsung SDI a total of 1.47 billion euros 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 euros, on Dutch-based Philips (PHG.AS) for its role in fixing prices and carving up markets. LG Electronics (066570.KS) of South Korea must pay the second biggest fine, set at 295.6 million euros.

"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 (2475.TW) blew the whistle on the cartels in TV and computer monitors and escaped a fine.

The Commission also fined Panasonic Corp (6752.T) 157.5 million euros, Samsung SDI (006400.KS) 150.8 million euros, Toshiba Corp. (6502.T) 28 million euros, and French company Technicolor (TCH.PA) 38.6 million euros.

A joint venture between Philips and LG Electronics was penalised 391.9 million euros 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 percent of the price of a screen.

Cathode-ray tubes have largely been replaced by more advanced display technologies such as liquid-crystal display (LCD), plasma display and organic light-emitting diodes.

Philips said it would make a provision of 509 million euros 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.

ING analyst Fabian Smeets told ANP-Reuters that the sanction was significant, but expected. Philips' shares were down 0.2 percent to 20 euros in mid-session, erasing earlier gains after news of the fines.

Technicolor said the fine, which will be booked as an exceptional item in its second-half accounts, would not affect its 2012 earnings and free cash flow targets.

Until now, the Commission's biggest antitrust penalty had been a 1.38 billion euro fine imposed on participants in a car glass cartel in 2008.

The Commission's sanctions followed a total fine of 128.74 million euros levied last year against four producers of the glass used in cathode-ray tubes.

Chunghwa Picture Tubes, Samsung Electronics (005930.KS), LG Display (034220.KS) and three other LCD companies were penalised a total 648 million euros two years ago for taking part in a cartel.

(Reporting by Foo Yun Chee, additional reporting by Anthony Deutsch in Amsterdam and Elena Berton in Paris; editing by Rex Merrifield and David Stamp)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Vodafone Tax Dispute

Vodafone Tax Dispute

India advised against challenging Vodafone tax ruling - source  Full Article 

Banking Sector

Banking Sector

India's laggard state lenders face tough sell on capital raising plan  Full Article 

Trade Deal

Trade Deal

WTO postpones trade deal by a day after last-minute objection.  Full Article 

Falling Oil Prices

Falling Oil Prices

Saudis signal no push for oil cut as market to "stabilise itself"  Full Article 

Raising Stake

Raising Stake

Nippon Life to raise stake in Reliance Capital fund unit  Full Article 

Sterilisation Camps

Sterilisation Camps

Sterilisation targets remain in all but name, critics say  Full Article 

Share Buyback

Share Buyback

Samsung Electronics to buy back $2 billion in shares  Full Article 

Microsoft in China

Microsoft in China

Microsoft to pay China $140 million for 'tax evasion'   Full Article 

Flashback: 26/11

Flashback: 26/11

The three-day attack in November 2008 left 166 dead.  Slideshow 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage