The European Commission has issued fines against six liquid crystal display ("LCD") panel producers, totalling €648,925,000, for their participation in cartel activity. Despite the fact that the majority of the infringing conduct took place in Taiwan, the Commission nonetheless ruled that the companies' illegal conduct had an adverse effect on consumers in Europe.
The LCD panel market is not insignificant. Indeed, such technology has become increasingly utilised in many new and developed products, including televisions, computer monitors and various handheld electronic devices.
From October 2001 to February 2006, the cartel members agreed various aspects of pricing policy, including price ranges and minimum prices, as well as exchanging information in relation to production and production capacity. The undertakings involved in this anti-competitive conduct included South Korean firms, Samsung Electronics and LG Display, as well as four firms from Taiwan, namely, AU Optronics, Chimei InnoLux Corporation, Chunghwa Picture Tubes, and HannStar Display Corporation.
Despite the gravity of the infringement, Samsung Electronics, as the first to come forward, received full immunity from fines under the Commission's leniency procedure. The leniency policy aims to encourage those involved in anti-competitive practices to come clean, which, in turn, provides the Commission with vital information to help enable it to prove the infringement.
However, the benefit of the Commission's leniency policy was not restricted to Samsung. Indeed, to reflect high levels of cooperation with the Commission's investigation, LG Display, AU Optronics and Chunghwa Picture Tubes all received reductions in fines, ranging from 50% to 5%.
Furthermore, LG Display also received immunity from all fines attributable to cartel conduct after 2005, as they were the first party to come forward with evidence showing that the cartel had operated after that date.
This case serves to demonstrate the wide range of incentives offered through the Commission's leniency policy in return for full cooperation and disclosure. However, notwithstanding leniency's appeal, competition compliance remains the ultimate goal. Indeed, it is important to remember that, while the leniency procedure can mitigate fines received from the Commission, it does not preclude subsequent private claims for damages being brought against cartel participants in national courts.
MacRoberts advises on all aspects of Competition Law.
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