European Commission drops the Hammer on TV Cartel

On the 5th December 2012, the European Commission doled out its biggest penalties to date for what it has termed as a “textbook cartel”. The highest penalty of €313.4 million went to the Dutch based electronics company Philips, while close behind was a penalty of €295.6 million suffered by LG electronics. Several other similar companies involved in the television market we hit with penalties such as Panasonic Corp (€157.5 million), Samsung (€150.8 million), Toshiba (€28 million) and Technicolor (€38.6 million). Among these were also several other joint venture companies between many of the companies already mentioned which were almost fined.

All these companies have been fined by the Commission for the act of “price-fixing” of cathode ray tube (CRT) televisions for nearly ten years, while the joint ventures were accused of doing the same in the market of computer monitors. Philips have publically announced that they intend to appeal this decision.

Although modern televisions have abandoned the CRT in favour of liquid crystal displays (LCD’s) or light emitting diodes (LED’s), the market during period in question was still dominated by CRT’s. The CRT as a part on its own would account for 50-70% of the price of a television screen.

These cartels are said to have been in operation between 1996 and 2006. During these periods it transpired that executives from these companies would discuss fixing prices on CRT’s over “green meetings” – so called because they would generally end with a game of golf.

The EU Competition Commissioner Joaquin Almunia has criticised the facts of this case as demonstrating the worst kinds of anti-competitive behaviour that could be carried out by any business in Europe. Worse still, it transpired that the companies were very well aware of the illegality of their activities. The documents they would generally submit to the Commission would first be circulated between the companies and contain the following warning:

“Everybody is requested to keep it a secret as it would be serious damage if it is open to customers or European Commission”

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