EU To Fine Philips, LG, Others For Cartel Actions
April Flowers for redOrbit.com — Your Universe Online
According to unnamed sources, Philips and LG Electronics, along with four other top electronics manufacturers, are facing hefty European Union (EU) fines at the end of the month. Their offense? Price fixing television cathode-ray tubes.
The other companies involved are South Korea’s Samsung SDI, French group Thomson, which was renamed Technicolor in 2010, and Japanese companies Matsushita, now known as Panasonic Corp, and Toshiba Corp.
The companies in question were raided by the European Commission in 2007. The Commission will announce the fines on November 28, according to sources and a document seen by Reuters. The fines are expected to be hefty because the cartel lasted more than a decade, starting in the late 1990s. According to law, the EU executive is allowed to penalize companies up to 10 percent of their turnover for breaching EU rules.
For Philips, that could easily reach 2.26 billion Euros, or $2.9 billion USD. For LG Electronics, the fine could be as much as 5.4 trillion Korean won, or $5 billion USD based on their 2011 revenues. Sanctions are not expected to reach those levels, however.
Two joint venture companies, LG Philips Display and MT Picture Display, will also be penalized by the European Commission, which did not respond to a phone call or email asking for comment.
Cathode ray tubes are a largely outdated technology that were used in TVs and computer monitors. They have been replaced by modern technologies such as LCD, plasma and organic LED.
Two years ago, the EU authority slapped a total fine of 648 million Euros ($824 million USD) on six LCD manufacturing companies — including Chunghwa Picture Tubes, Samsung, and LG Display — for taking part in another cartel. Last year, it imposed 128.74 million Euro ($164 million USD) fines on four producers of cathode ray tubes for fixing prices.