EU court rules on fines issued over cathode ray tubes cartels

Out-Law News | 10 Sep 2015 | 11:15 am | 2 min. read

An EU court has largely upheld fines imposed by the European Commission against companies involved in fixing of prices of "essential components" in the production of colour TVs and computer monitors.

The EU's General Court did, though, reduce the level of fines that Panasonic and Toshiba must pay as a result of their involvement in the cartel activity after the companies appealed against the Commission's decision. Similar appeals from LG Electronics, Philips and Samsung SDI were dismissed by the court.

In late 2012, the European Commission imposed fines totalling more than €1.47 billion on the six companies after it said they had operated in at least one of two global cartels where prices for cathode ray tubes (CRT) were fixed.

The Commission said that LG Electronics, Philips, Samsung SDI, Panasonic, Toshiba, MT Picture Display (MTPD), Technicolor and Chunghwa had entered into anti-competitive agreements over the sale of colour picture tubes (CPT) used for televisions between 1996 and 2006. Chunghwa, LG Electronics, Philips and Samsung also operated a cartel in relation to the sale of colour display tubes (CDT) used in computer monitors between 1997 and 2006, it said. MTPD was a joint venture company owned by both Panasonic and Toshiba at the time.

Chunghwa escaped a fine after disclosing the arrangements to the Commission.

The Commission had said that, in addition to fixing prices, the companies had engaged in other "most harmful" practices that infringed EU competition rules, including sharing markets, allocating customers among themselves, restricting production output and exchanging commercially sensitive information.

In its rulings, the General Court revoked the European Commission's decision to fine Toshiba more than €28m for "direct participation in the infringement".

It ruled that the Commission had not provided sufficient evidence to show that Toshiba "was aware or had actually been kept informed of the existence of the overall CPT cartel and that it intended to contribute by its own conduct to all the common objectives pursued by the participants in the cartel or that it could reasonably have foreseen those objectives and was prepared to take the risk", its statement said.

The General Court also revised down the level of penalties that Toshiba, Panasonic and MTPD must pay in relation to MTPD's infringing activity. MTPD was a joint venture company owned by both Panasonic and Toshiba at the time the cartels were operating.

The Court reached that decision after finding that the Commission should have calculated the fines it imposed on MTPD differently, and made a similar finding in respect of the penalty the Commission had imposed on Panasonic for its direct participation in the CPT cartel.

As a result of the General Court's rulings, Philips must pay more than €313 million for its direct participation in both the CPT and CDT cartels. The company is also, together with LG Electronics, jointly and severally liable for an additional fine totalling more than €391m. Philips and LG Electronics had a joint venture CRT business at the time the cartels were operating. LG Electronics must pay a fine of more than €295m in relation to its direct involvement in the cartels, and Samsung SDI faces a fine of more than €150m.

Panasonic's revised fine for direct participation in the CPT cartel totals more than €128m. The company is jointly and severally liable for a further fine of more than €7.5m with MTPD and also jointly a severally liable for a fine exceeding €82m along with MTPD and Toshiba. The existing penalty served against Technicolor, of more than €38m, for its participation in the CPT cartel was not challenged before the General Court.