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Chinese regulator fines six LCD screen makers over price fixing

Regulators in China have followed the European Commission in fining a number of major global technology companies for fixing prices of display screens, according to media reports.08 Jan 2013

The National Development and Reform Commission (NDRC) in China ordered LG Display, Samsung, AU Optronics, Chimei InnoLux Corporation, Chunghwa Picture Tubes and HannStar Display Corporation to pay a total of 353 million Chinese yuan (approximately £35m) over price-fixing activity it said took place between 2001 and 2006, according to a report by the Bloomberg news agency.

The companies unfairly negotiated or manipulated the prices of liquid crystal display (LCD) screens, NDRC adjudged, according to a report by South Korean news agency Yon Hap..

LG Display and Samsung, respectively fined 118m and 101m Chinese yuan (approximately £11.65m and £10m), are South Korean companies. The other four firms are from Taiwan. It is the first time authorities in China have sanctioned foreign companies over competition law matters, according to the Yon Hap report.

Nine manufacturers of televisions will be refunded from nearly half of the money the companies have been ordered to pay, the Yon Hap's report said.

All six companies have owned up to the practices, NDRC said, according to the Bloomberg report.

"The enterprises involved in the price monopoly acts have harmed the legitimate rights and interests of the domestic colour TV enterprises and consumers," NDRC said.

LG Display said it has taken steps to address compliance.

"To prevent a recurrence of such problems, LG Display has been mending policies and executing them, and remains committed to operating with compliance and transparency," a spokesperson for LG Display said, according to the Yon Hap report.

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.

Last month it emerged that Hewlett-Packard (HP) had filed a lawsuit in a district court in California against Chungwha and subsidiary Tatung Company of America alleging that it had overpaid for display screens as a result of the companies participation in a "price fixing scheme". HP is seeking $1 billion in damages from the case, Bloomberg reported at the time.

In 2009 Chunghwa agreed to pay a $65m fine as part of a guilty plea made in conjunction with the US Justice Department after the Department had conducted a criminal investigation into 'thin film transistor liquid crystal display' price fixing.

As part of its plea agreement, the Taiwan-based company acknowledged that it had participated "in a conspiracy to suppress and eliminate competition by fixing the prices of thin-film transistor liquid crystal display panels sold in the United States and elsewhere, from on or about September 14, 2001, to on or about December 1, 2006, in violation of the Sherman Antitrust Act".