Out-Law News 2 min. read
23 Apr 2015, 12:30 pm
The Court of Justice of the EU (CJEU) dismissed the company's appeal against a previous ruling by the EU's General Court. The General Court had upheld the European Commission's decision to fine LG Display for price-fixing, but revised down to €210m the €215m fine the Commission had originally served.
LG Display argued before the CJEU that sales it made of LCD panels to its parent companies should not have been considered when the level of fine imposed on it was assessed. It said that those sales were not linked to the cartel activity and that the General Court had erred by finding that the Commission was able to consider those sales when setting its fine.
EU guidelines require the Commission, among other things, to establish the value of sales made by companies during the time they were acting in breach of competition rules and factor that in when determining what fine to serve companies for engaging in anti-competitive behaviour.
The CJEU rejected LG Display's argument as "unfounded".
"To ignore the value of sales made to independent third parties on the ground that the undertaking participating in the infringement has particular structural links with those third parties would give an unjustified advantage to such an undertaking by allowing it to avoid the imposition of a fine proportionate to its importance on the product market to which the infringement relates," the CJEU said in its judgment.
"That is because, in addition to the profit which can be expected from a cartel which provides for horizontal price-fixing in sales to independent third parties, an undertaking may also benefit from such a cartel through growth in its sales to undertakings with which there are certain structural links, where such undertakings are not subject to the increased prices fixed within the cartel, since, as a result, that undertaking acquires a competitive advantage over its competitors who offer those increased prices on the relevant market," it said.
"Moreover, the very fact that an undertaking achieves sales on the relevant market to independent third parties at such increased prices entails a distortion of competition affecting the entire relevant market, to the disadvantage, in particular, of consumers. It follows that … even where a cartel does not relate to the sales of the product in question to undertakings linked to the members of that cartel, competition on the relevant market is distorted, and consequently those sales may be taken into account for the calculation of the fine," the CJEU said.
The CJEU also dismissed LG Display's arguments that it was entitled to "partial immunity" from penalties for its cartel activities.
In 2010 the European Commission fined LG Display, Chunghwa, AU Optronics, Chimei InnoLux and HannStar Display €649 million in total for operating in a price-fixing ring for LCD screens between October 2001 and February 2006. Samsung did not receive a fine because it alerted the Commission to the activity.
"During the four years, the companies agreed prices, including price ranges and minimum prices, exchanged information on future production planning, capacity utilisation, pricing and other commercial conditions," said a Commission statement at the time. "The cartel members held monthly multilateral meetings and further bilateral meetings. In total they met around 60 times mainly in hotels in Taiwan for what they called 'the Crystal meetings'."
"These agreements had a direct impact on customers in the European Economic Area because the vast majority of televisions, computer monitors and notebooks incorporating those LCD panels and sold in the EEA comes from Asia," it said.
The European Commission said that the companies knew that what they were doing was wrong because documents urged readers to keep them secret and to keep written communication about the discussions to a minimum.