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Samsung to Philips Fined $181.3 Million Over Chip Cartel

Samsung, Philips Said to Face EU Fines on Smart-Card Chip Cartel
Samsung Electronics Co., Royal Philips NV and Infineon Technologies AG will be fined as soon as today by the European Union for fixing the price of chips used in mobile phones and bank cards, according to two people with knowledge of the case. Photographer: Brent Lewin/Bloomberg

Samsung Electronics Co., Royal Philips NV and Infineon Technologies AG were fined a total of 138 million euros ($181.3 million) by the European Union for fixing the price of chips used in mobile phones and bank cards.

Samsung, the world’s largest smartphone maker, will have to pay 35.1 million euros, while Philips was told to pay 20.1 million euros. Infineon received the largest penalty at 82.8 million euros.

The companies “colluded through a network of bilateral contacts in order to determine their respective responses to customers’ requests to lower prices,” the European Commission said today in an e-mailed statement today. Some of the firms “took measures to conceal the collusion,” Joaquin Almunia told reporters.

The EU competition chief, whose term is due to end in less than two months, increased his price-fixing fine tally to 1.58 billion euros for this year. Philips nearly escaped a penalty as the 10-year deadline on penalties for antitrust violations ran until Sept. 9, a person familiar with the case said in June.

The fines follow the collapse of talks to settle the case in 2012. Renesas Technology Corp. will avoid an EU punishment because it revealed the smart-card chip cartel.

The companies colluded through bilateral contacts that took place in the period between September 2003 and September 2005, the commission said. They discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilization and their future market conduct, the regulator said.

Share Gains

Philips shares gained 1.2 percent at 2:59 p.m. in Amsterdam. Infineon shares advanced 0.6 percent in Frankfurt trading.

Infineon “rejects the allegations as unfounded,” and “is ready to appeal” the decision, the Neubiberg, Germany company said in an e-mailed statement. “Infineon believes that its procedural rights were violated.”

Philips plans to appeal the decision, which it considers “unfounded,” company spokesman Steve Klink said in a e-mail. Samsung is “reviewing” the decision, said Rhee So-eui, a spokeswoman for the Suwon, South Korea-based company. Representatives for Renesas didn’t immediately respond to a call and an e-mail requesting comment ahead of the decision.

Infineon and Samsung were among nine chipmakers that agreed to pay a total of 331 million euros four years ago for fixing prices for dynamic random access memory, or DRAM, chips for personal computers and servers.

Intel Corp., the world’s largest chipmaker, got the EU’s biggest-ever fine of 1.06 billion euros in 2009 for squeezing its nearest rival Advanced Micro Devices Inc. The Santa Clara, California-based company is challenging the EU decision at the EU’s top court.

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