Chinese price fixing penalty against panel makers symbolic only: analyst
CNATAIPEI--The fines imposed by Chinese authorities on six flat panel makers, including four from Taiwan, for conspiring to fix prices seem to be symbolic only because the sum is so small, according to a market analyst.
January 6, 2013, 12:01 am TWN
David Hsieh, DisplaySearch's vice president for the greater China market, said late Friday that compared with the big criminal fines ordered by United States courts for the same price manipulation, the punishment from China is not likely to substantially affect the operations of the four Taiwanese firms.
China's National Development and Reform Commission (NDRC) on Friday imposed total fines of 353 million Chinese yuan (US$56.7 million) on six flat panel makers for price-fixing during the period of 2001-2006.
The four Taiwanese firms involved are Chimei Innolux Corp., AU Optronics Corp. (AUO), Chunghwa Picture Tubes Ltd. and HannStar Display Corp., the NDRC said. Chimei Innolux changed its name to Innolux Corp. at the beginning of this year.
The other two manufacturers accused of manipulating product prices in the six-year period are Samsung Electronics Co. and LG Display Co. of South Korea, according to the commission.
The NDRC said the six companies held a total of 53 meetings in Taiwan and South Korea during the six-year period to exchange market information in a bid to manipulate product prices.
China's penalty was only a fraction of the almost US$1.4 billion (NT$40.74 billion) in criminal fines imposed by U.S. courts on various companies from Taiwan, South Korea and Japan, Hsieh noted.
No Japanese firms were involved in the China penalty because they did not sell any flat screens to China during that period, Hsieh said.
The fine of 353 million yuan includes 172 million yuan in overcharges resulting from the price fixing scheme, according to Hsieh.
He said the six companies have already returned that sum to Chinese TV vendors at the request of Chinese authorities.
As a result, the remaining fines are unlikely to affect the companies' bottom lines, he added.
According to the NDRC, Innolux has been fined 94.41 million yuan, AUO 21.89 million yuan, Chunghwa Picture Tubes 16.20 million yuan, and HannStar 240,000 yuan.
The Ministry of Economic Affairs said it has contacted the four local flat panel suppliers and hopes to gain a better understanding of the consequences of the financial penalty.
The ministry said it has promised to provide assistance to the four companies if necessary, but is watching closely how the case will evolve.
Market observers said Chinese flat panel makers have been trying to lure Taiwanese talent by offering attractive remuneration packages, which is likely to have a more serious impact on the local screen business than the price-fixing fines.