Out-Law News 1 min. read

EU regulator takes action against disc drive 'cartelists'

Eight businesses participated in a cartel in the market for optical disc drives (ODDs), the European Commission has claimed.

The Commission, which is responsible for enforcing EU competition laws, fined Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage a total of €116 million for "having coordinated their behaviour in relation to procurement tenders" for the supply of ODDs that were run by at least one of two computer manufacturers, Dell and Hewlett Packard.

Three other companies, Philips, Lite-On, and their joint venture Philips & Lite-On Digital Solutions, avoided a financial penalty after disclosing their involvement in the activity, the Commission said.

However, Sony, together with its subsidiary Sony Optiarc fined more than €30m by the Commission, told Out-Law.com that it does not accept the Commission's decision and would appeal.

"We disagree with and strongly contest the decision rendered today by the European Commission concerning conduct alleged to have taken place between 2004 and 2008 in connection with the supply of optical disk drives to Dell in the European Union," Sony said in a statement. "Despite the narrowness of the Commission’s finding as to Sony, the company believes the decision is incorrect and not supported by the evidence and it intends to appeal.  Sony Corporation remains committed to complying fully with applicable antitrust rules in all countries in which it operates around the world."

Out-Law.com also asked Hitachi-LG Data Storage, Toshiba Samsung Storage Technology and Quanta Storage for their reaction to the Commission's decision but did not receive a response.

Article 101 of the Treaty on the Functioning of the EU places a general ban on agreements between undertakings that affect EU trade where those agreements "have as their object or effect the prevention, restriction or distortion of competition within the internal market".

According to the Commission, the eight companies discussed their intended bidding strategies for contracts to supply Dell and Hewlett Packard with ODDs for the computers they made. The companies also "shared the results of procurement tenders and exchanged other commercially sensitive information concerning ODDs used in laptops and desktops" and "organised a network of parallel bilateral contacts that pursued a single plan to avoid aggressive competition in procurement tenders organised by Dell and HP", the regulator said.

"The companies were aware that their behaviour was illegal and tried to conceal their contacts and to evade detection of their arrangements," the Commission said. "For example, they avoided naming the competitors concerned in their internal correspondence but used abbreviations or generic names."

"The cartelists also avoided leaving traces of anticompetitive arrangements by preferring face-to-face meetings and ensured that the competitors' discussions were not revealed to customers. Some of them met in places where they could not be easily spotted, including in parking lots or cinemas," it said.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.