Record €1.47 BEELLION EC fine for price-fixing display cartels
CRT monitors - more evil than we knew
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The EC has fined screen-makers including Samsung and LG €1.47bn for joining in one or both of two different CRT cartels running between 1996 and 2006.
The European Commission's antitrust division said that eight different companies fixed prices, shared markets, divvied out customers between them and restricted their output in the colour display tubes for tellies in one cartel and computer monitors in the other.
The companies' top management agreed the anticompetitive deals at "green meetings", so-called by the firms because they were usually followed by a game of golf.
"These cartels for cathode ray tubes are 'textbook cartels': they feature all the worst kinds of anticompetitive behaviour that are strictly forbidden to companies doing business in Europe," competition commissioner Joaquin Almunia said in a tinned statement.
"Cathode ray tubes were a very important component in the making of television and computer screens. They accounted for 50 to 70 per cent of the price of a screen. This gives an indication of the serious harm this illegal behaviour has caused both to television and computer screen producers in the EEA, and ultimately the harm it caused to the European consumers over the years".
The commission said that Chunghwa, LG Electronics, Philips and Samsung SDI participated in both cartels, while Panasonic and its subsidiary MTPD, Toshiba and Technicolor took part in the TV tube cartel. Chunghwa, however, got full immunity from the fines since it was the firm that came clean to the commission and started the investigation.
Some of the other firms were shown leniency because they cooperated with the investigation, but all of them will have to pay millions. Philips and LG are the worst off, getting €313m and €295m fines respectively. Samsung was fined €151m and Panasonic will have to pay €157m.
The cartels were trying to keep earning money as the market for CRT declined, the commission said, in a way that was hurting consumers. ®
COMMENTS
Re: Woefully Inadequate Fines
Let me correct that for you:
" in real capitalist economies, the consumers actually fix the price"
in nominal capitalist economies, situations may occur such as this where suppliers are not competing against each other (allowing consumer choices to fix the price), but colluding with each other so that they are the ones fixing the price and consumer choice becomes an illusion.
Re: Woefully Inadequate Fines
I think an easier way would be to apply the fines directly to the executives instead of the company. Saves having to jail them and if the CEO knows those millions will come out of his own pocket I'd wager it wouldn't happen too often in the future. Personal accountability, it's a great motivator.
Re: Woefully Inadequate Fines
'Woah! Call the wahambulance! Someone has made higher profit than is rightfully owed according to... who exactly?'
Think your missing the point. The case was about collusion! Collusion over a round of golf! Its anti-competitive, harms economies and therefore illegal!
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