China fines Taiwan panel makers for price fixing
By Ted Chen ,The China PostTAIPEI, Taiwan -- China yesterday imposed fines of 353 million yuan (US$56.7 million) on four Taiwanese and two South Korean flat panel makers, in an unprecedented legal action against price fixing for the country.
January 5, 2013, 12:06 am TWN
The four Taiwanese companies are Chimei-Innolux (奇美), which was fined 94.41 million yuan; AU Optronics (友達), fined 21.89 million yuan; Chung Hwa Picture Tubes Ltd. (華映), fined 16.2 million yuan; and HannStar Display Corp. (瀚宇彩晶), fined 240,000 yuan.
The two South Korean firms are Samsung, which was fined 101 million yuan, and LG, fined 118 million yuan.
AU Optronics may receive clemency given that it was the first company to come forward and admit to the charges, according to a Chinese media report.
All of the Taiwanese companies have since made public statements acknowledging the fines, and indicated that their operations and financial statements will not be significantly affected. Chung Hwa Picture Tubes Ltd. and Chimei-Innolux further pledged to adhere to Chinese laws and act in the best interest of its customers.
The ruling is the result of a six-year probe, following similar rulings by the European Union, the U.S. and South Korea.
The National Development and Reform Commission of China (NDRC, 國家發展及改革委員會) stated that according to its investigation, in the period between 2001 and 2006 the six companies held over 53 monthly meetings to collude on the price of liquid crystal display (LCD) panels, which harmed the interests of Chinese consumers and competitors in the LCD industry.
The NDRC explained that the 353-million-yuan fine includes the 172 million yuan that the firms gained from their illegal price fixing activities.
The six companies have since returned the overcharges to domestic Chinese manufacturers that purchased panels from the group of six panel makers.
The NDRC levied additional punitive measures on the six companies, requiring them to extend the warranty period for panels from 18 months to 36 months.
US, EU, South Korea Courts Dealt Stricter Penalties
In contrast, companies were given stiffer penalties by courts in the European Union, South Korea and the U.S. in cases related to display panel price fixing.
In 2010, the European Union levied fines of US$843.7 million, while South Korea levied fines of US$182 million for similar offenses.
The U.S. levied fines of US$87 million against Toshiba in July and US$500 million against AU Optronics in September 2012.
The NDRC explained that the amount of the fines was calculated in accordance with the country's price control regulations, instead of the more stringent antitrust law.
China Video Industry Association (中國電子視像行業協會) Deputy Director Hau Ya-bin (郝亞斌) said that the ruling will prove to have a significant impact on the landscape of China's LCD industry.
Hau added that the punitive extension of the warranty period alone will be a great boon to China's TV producers, representing over 395 million yuan in annual cost reductions.
Hau concluded that China's current reliance on panel imports will remain unchanged for the time being, urging regulatory authorities to ensure an environment of fair trade in the mainland.