Seven international electronics manufacturers were fined a total of $1.92 billion by the European Commission on Wednesday for conspiring to fix the price of cathode-ray tubes (CRTs) in two separate cartels between 1996 and 2006.
European Union antitrust regulators established that CRTs represented 50 to 70 percent of the price of a screen, and that LG Electronics, Philips, Samsung Electronics, Toshiba, Technicolor, Panasonic and MT Picture Display (MTPD) worked together in order to share the market for CRTs, allocate customers, fix prices, control their output and exchange sensitive commercial information, which stymied competition.
Some of the companies fined participated in both cartels, others in just one of them, the Commission said Wednesday. One cartel focused on color picture tubes used in televisions, the other on color display tubes used in computer monitors.
A Taiwanese electronics manufacturer called Chunghwa, which participated in both cartels, received full immunity because it was the first company to come forward with information about the anti-competitive practices. Some of the other companies received a fine reduction for their cooperation.
French electronics manufacturer and media services provider Technicolor, formerly known as Thomson, together with Japanese electronics manufacturers Toshiba, Panasonic and MTPD, currently a Panasonic subsidiary, only participated in the television tube cartel. Chunghwa, LG Electronics, Philips and Samsung SDI participated in both.
Technicolor, Philips and Samsung SDI received fine reductions of 10, 30 and 40 percent respectively.
The companies knew that they were breaking the law and were taking precautions to keep their practices hidden, the Commission said. Some documents found during the investigation had clear instructions that they were to be destroyed after being read, and one particular document contained a warning reading "Everybody is requested to keep it as secret as it would be serious damage if it is open to customers or European Commission."
"These two cartels are textbook examples of all the worst kind of collusive practices," said Joaquin Almunia, European Commission vice president in charge of competition policy, during a press conference on Wednesday. "They chose to conspire to artificially maintain returns in a declining technology market."
This kind of behavior is totally unacceptable as it deprives citizens and businesses from the benefits of competitive and dynamic markets, Almunia said.
The two cartels were among the most organized the Commission has ever investigated, he said. Top executives from the fined companies met to conspire in Asia and Europe, often on golf courses. Their plans were then implemented during lower-level meetings that took place on a weekly, monthly or quarterly basis.
"Today the cartels get the sanctions they deserve," Almunia said. The total amount of the fines, which is the highest for a cartel decision ever, is proportional and reflects the gravity and the duration of their activities, he said.
In a press release issued after the Commission's announcement, Technicolor said that the possibility of the company being fined as a result of this investigation has been included in its annual report since 2009.
The company said that it will ask for a payment schedule from the Commission. The loss will appear as an extraordinary item on the company's income statement for the second half of 2012.
Thomson S.A., now Technicolor, sold its CRT business in 2005.
Samsung Electronics, LG Display, Chungwha and three other display makers also participated in a LCD price fixing cartel between 2001 and 2006. The European Commission fined LG Display and Chungwha in 2010 for their involvement, but Samsung received full immunity for providing key information about the deals to the Commission.
Samsung did not respond to a request for comment about the new sanctions resulting from the CRT price-fixing investigation. LG said that time zone differences left it unable to comment Wednesday, but that a response to a request for comment would be made Thursday.
