Samsung, LG Display Fined by China for Fixing LCD Panel Prices
Stock Chart for HannStar Display Corp (6116)
Samsung Electronics Co. (005930) and LG Display Co. (034220), the world’s biggest makers of flat panels, were among six companies fined by China’s government for participating in a price-fixing scheme.
AU Optronics Corp. (2409), Innolux Corp., Chunghwa Picture Tubes Ltd. and HannStar Display Corp. (6116) also were cited by the National Development and Reform Commission, which ordered the companies to pay a combined 353 million yuan ($56.7 million). LG Display will pay 118 million yuan and Samsung 101 million yuan.
The six companies held 53 meetings in Taiwan and South Korea between 2001 and 2006 to agree on prices for the liquid- crystal-display panels, mainly used for TVs, and shared other confidential information, the commission said today in a statement. The U.S. and European Union previously fined panel makers -- including Samsung, LG Display and Sharp Corp. -- for fixing prices through similar cartels.
“The enterprises involved in the price monopoly acts have harmed the legitimate rights and interests of the domestic color TV enterprises and consumers,” said the commission, which is China’s top economic planning agency. The companies “confessed to their crimes,” the agency said.
Samsung’s display-making unit, Samsung Display Co. of Asan, South Korea, said in a statement it stopped participating in any form of price fixing at the end of 2005, and that the company will abide by China’s fair-trade law.
LG Display, based in Seoul, said in a statement the decision covers events between 2001 and 2006, and “we do not expect this decision to impact our relationship with customers or panel sales.”
China’s government also ordered Innolux, formerly known as Chimei Innolux; AU Optronics; Chunghwa Picture Tubes (2475); and HannStar to pay. These four companies are all based in Taiwan.
“The company has cooperated in the relevant investigations,” Yawen Hsiao, a spokeswoman at AU Optronics, said by phone today. “There is no material impact on company operations.”
Innolux cooperated with the NDRC on investigations, the company said in an e-mailed statement. The ruling won’t affect company operations as related costs have been booked as a non- operating charge, it said.
Eric Chiang, a spokesman for Chunghwa Picture, said the company is cooperating with antitrust investigators and a provision has been made for related costs. There will be no significant impact on company finances or operations, he said.
The six companies earned 208 million yuan from the scheme, the NDRC said.
A U.S. court said in December 2011 that Samsung, Sharp and six other makers of panels for TVs and computers agreed to pay $388 million to settle price-fixing claims by direct purchasers of the products.
The litigation stemmed from a U.S. Justice Department investigation that led to guilty pleas by LG Display, Chunghwa Picture Tubes and Sharp. The companies agreed in 2008 and 2009 to pay $585 million in criminal fines.
Separately, the European Union said in December 2010 it fined six makers of LCD panels a combined 649 million euros ($845 million) for fixing prices.
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