Philips has announced that it has received a fine of 313 million euros from the European Commission following an investigation into alleged violation of competition rules in the cathode-ray tubes industry. In addition, the European Commission has ordered Philips and LG Electronics to be jointly and severally liable to pay a fine of 392 million euros for an alleged violation of competition rules by their joint venture: LG.Philips Displays (LPD).
Philips said it intends to appeal the decision because it divested its cathode-ray tubes activities by transferring them to LPD in 2001. It says LPD operated as an independent company and was not consolidated in Philips accounts. In 2006, LPD went bankrupt. The CRT investigation by the European Commission has been previously disclosed in Philips' Annual Reports.
"We regret any association with this type of behavior," said Philips chief executive officer Frans van Houten. "Our ethical standards as set out in our General Business Principles are very clear and must be strictly adhered to. We believe that the fine which relates to a business that has been divested in 2001 is disproportionate and unjustified. At the same time, I want to reassure our stakeholders that the fine will not deflect our focus to make Philips the leading technology company in health and well-being. We will continue on our Accelerate! performance improvement roadmap and reiterate our 2013 financial targets."
The company says it has co-operated fully with the investigation by the European Commission, in return for which its fine was lowered. The fine is payable within three months.
