Multiple countries have been investigating into allegations that LG, Philips, Samsung and others colluded to rig the prices of the LCD market, minting huge profits in the process. EU has already slammed the companies with a $1.9 billion bill and now, China has fined them another $56.6 million.
The decision by the Chinese authorities to fine the companies is quite significant. On the list is Samsung, LG and four other Taiwanese companies. This is the first time ever China has punished a foreign company for indulging in price-fixing measures.
The fine was levied by National Development and Reform Commission which serves as a primary policymaking body on the economic front of the mainland. The Commission looked into the allegations that the LCD vendors have collaborated to set prices across the industry by meeting regularly between 2001 and 2006.
It was eventually revealed that the price-fixing affected a total of $74 billion in global LCD sales. Although EU tested the case on antitrust charges, China has limited itself to violations related to Price Law since the antitrust law in the mainland was passed after 2006.
Chinese companies that buy LCD displays from the fined companies are happy over the decision, lamenting at the same time how it has affected their business over the years. Commenting on the situation, Lu Renbo of China Electronic Chamber of Commerce states, “LCD screens account for about 80 percent of the overall costs of color television sets. The mainland produced about half of the world’s televisions but at that time all screens were imported.”
Since LCDs were being used in everything, from TV sets and phones, back when the prices were rigged, it is no wonder that a whole lot companies were affected by the price fixing.
Courtesy: China Daily