BRUSSELS — For a decade, senior managers at some of the world’s largest electronics companies met at golf courses, mostly in Asia, for what they called “greens meetings.”
Besides golf, the business at hand was a price-fixing scheme that affected millions of consumers, the top European antitrust regulator said on Wednesday.
Joaquín Almunia, the European competition commissioner, imposed fines totaling almost 1.5 billion euros, or $1.96 billion, on seven companies involved in two cartels that fixed the price of picture and display tubes for televisions and computer screens.
Combined, the fines amount to the largest single penalty for price fixing ever imposed by the commission, which said the cartels had engaged in the most organized market manipulation it had ever investigated. In addition to price fixing, the cartels’ conspiracies included market sharing, customer allocation and exchanges of important commercial information.
The action follows a spate of similar cases in the glass and display sectors, where bulky cathode ray tubes have been supplanted by technologies like liquid-crystal display and plasma that allow manufacturers to build far more compact monitors and screens.
But starting in the late 1990s, when the market was still strong for cathode ray tubes, and lasting until 2006, the conspirators’ scheme allowed them to continue generating strong returns for a technology that was rapidly becoming outmoded.
“The companies were trying to manage through collusion the decline in the market for these kinds of tubes,” Mr. Almunia said at a news conference. “The undue profits that the companies derived from the collusion may even have artificially slowed down the transition to the more modern products like LCD and plasma displays.”
Excerpts from minutes from meetings held by the cartel members obtained during the investigation showed the efforts they made to fix the market for the older technologies, according to commission officials.
“Producers need to avoid price competition through controlling their production capacity (of flat types in particular),” one excerpt read. Another noted that “mutual cooperation is required to deal with an expected economic downturn” in the second half of 2002.
In addition to the “greens meetings,” there were “glass meetings” for lower-level managers. The name probably related to the glass structure of the cathode ray tubes, officials said. They were held in Asia and in European cities including Glasgow, Paris, Rome, Amsterdam and Budapest, commission officials said.
The cartels “feature all the worst kinds of anticompetitive behavior that are strictly forbidden to companies doing business in Europe,” Mr. Almunia said. Producers in Europe and consumers suffered serious harm, he said, because the cathode ray tubes accounted for as much as 70 percent of the price of screens.
During his news conference, Mr. Almunia read from one of the documents obtained by the commission to show that cartel members were aware they were breaking the law. “Everybody is requested to keep it a secret,” the document read, “as it would be serious damage if it is open to customers or to the European Commission.”
The commission’s antitrust division can fine offenders as much as 10 percent of their annual worldwide sales, and the fine on Wednesday exceeded the previous record of almost 1.4 billion euros, which was imposed upon an auto-glass cartel in 2008.
But unlike regulators in the United States, the commission has no criminal enforcement powers and cannot prosecute or seek to jail participants for anticompetitive offenses. Many lawyers say this lack remains a shortcoming of the European system.
“There is a deterrent effect as these fines get higher, but there are always going to be some companies with wayward commercial personnel and some companies where some people say, ‘Let’s take the risk as might be worth it in the long run,’ ” said Caroline Hobson, a competition law partner at CMS Cameron McKenna in London. “An even greater enforcement power is the power to jail offenders, because that really makes people wake up.”
She said she did not represent any of the companies involved in the case.
Mr. Almunia imposed the harshest penalties on Royal Philips Electronics of the Netherlands and LG Electronics of South Korea. Philips was fined 313.4 million euros and LG Electronics 295.6 million euros. Philips and LG also were also part of a joint venture that received an additional fine of 391.9 million euros for which both companies were liable.
The commission also fined Panasonic 157.5 million euros, Samsung 150.8 million euros, Toshiba 28 million euros and Technicolor 38.6 million euros.
In a statement, Philips said it would appeal the fines to the General Court of the European Union, the bloc’s second-highest tribunal. Philips described the fine relating to its involvement in the joint venture as “disproportionate and unjustified.” Philips said it had divested that business in 2001.
LG did not respond to an e-mail request for comment.
The sanctions announced on Wednesday were the latest handed down by the commission over activity in the sector. It levied a fine of 128.7 million euros last year against four producers of the glass that is used in cathode ray tubes, and it imposed a 649 million euro fine in 2010 against members of a cartel that fixed prices on flat-panel displays based on LCD technology. One of the companies involved in that case, Chunghwa from Taiwan, reported the picture tubes case to the commission. As a result, Chunghwa received full immunity from fines.
Europe Fines Electronics Makers $1.92 Billion
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Europe Fines Electronics Makers $1.92 Billion
