And we thought it was just big U.S. window-manufacturing corporations that the European Union targeted in antitrust-like investigations.
Turns out that domestic and Asian suppliers are fair targets as well, as the EU imposed a total of $1.9 billion in fines on Netherlands-based Philips, Korea-based LG and Samsung, Japan’s Panasonic and Toshiba, and France’s Technicolor for price-fixing and under-the-table market allocation deals.
The anticompetitive behavior that actually prompted the fines is ancient history in the fast-paced consumer electronics industry. Focused on yesterday’s fat TVs — yes, the CRT ones that actually aimed electron guns at viewers — the price-fixing actually ended six years ago. But while the wheels of justice may move slowly, they do move, according to EU Competition Commissioner Joaquin Almunia.
“These cartels for cathode-ray tubes are ‘textbook cartels': they feature all the worst kinds of anti-competitive behavior that are strictly forbidden to companies doing business in Europe,” Almunia said in a statement.
Philips earned the biggest fine, €313 million, as one of the ringleaders, while LG was fined €295 million. Panasonic’s penalty was smaller but still very substantial, at €157 million, and Samsung will be forced to pay €151 million.
Samsung and LG are repeat offenders, having recently been involved in an LCD TV price-fixing cartel.
A very real question for some of the companies is whether they can afford to pay.
While Samsung is flush with cash from the smartphone business, other companies — particularly Japanese ones — have failed to make as successful a transition to newer, higher-margin electronics. Panasonic’s stocks is at a three-year low right now and is fresh off a $10 billion annual loss. Toshiba is also in difficult circumstances, and near a five-year stock low.