The European Commission has imposed a record €1.47 billion fine on seven electronics manufacturers for rigging the market for cathode ray tubes (CRT) used in television sets and computer monitors.

The fine follows an investigation that began with a series of raids in November 2007 culminating with the official start of the investigation in January 2008. It covered the period 1999-2005. Back from 1996, the manufacturers targeted shared markets, allocated customers between themselves and restricted their output, EC said.

European Commission vice president Joaquín Almunia said that these cartels for cathode ray tubes are 'textbook cartels.' "They feature all the worst kinds of anti-competitive behaviour that are strictly forbidden to companies doing business in Europe."

The Commission said: "For almost ten years, the cartelists carried out the most harmful anti-competitive practices including price-fixing, market-sharing, customer allocation, capacity and output co-ordination and exchanges of commercially sensitive information." The manufacturers operated worldwide into two cartels, meetings in Hong Kong, Amsterdam, Paris and Rome, the Commission alleges.

The clandestine meetings - called 'green meetings' - were "secret huddles of some of the world's top electronics executives at which they carved up the cathode ray tubes market and then hit the golf course," as the London Times put it. "They laid the foundations for one of the most egregious cartels that European anti-trust investigators have come across [...] Investigators from the Commission uncovered documents in which the conspirators apparently brazenly discussed the need to keep their discussions secret."

Given that the CRT reportedly accounts for up to 70% of the price of a TV set, the cartel arrangement penalised consumers who were overcharged for almost a decade as a result of the tube producers conspiring to distort the market.

Philips and LG Electronics were imposed the biggest penalties - €313.4 million and €295.6 million, respectively - because of their involvement in both cartels. Samsung, also involved in both cartels, was fined €150.8 million. Panasonic and Toshiba, which participated only in the television tubes cartel, were fined €157.5 million and €28 million, respectively. Technicolor was hit with a €38.6 million penalty.

Technicolor owner, Thomson SA, sold its CRT business in 2005. Philips described its penalty as "disproportionate and unjustified", because its tube production unit was divested in 2001, and said that it would appeal against the Commission's decision, as will LG Electronics.

"Other leading competition authorities, including the Korean Fair Trade Commission, the US Department of Justice and the Canadian Competition Bureau have investigated the same facts and concluded that LG Electronics should not be held liable for the conduct of LG Philips Displays," John Kwon, executive vice president of LG Electronics, said in a press release. He added the company "can't understand why the European Commission has taken a wholly different approach compared with other authorities."

Taiwanese manufacturer Chunghwa was granted immunity because it blew the whistle on the price-fixing arrangement.

Story filed 08.12.12