China Fines Overseas Firms for Price-Rigging

CHINA has fined six overseas LCD panel makers including Samsung and LG a total of 144 million yuan (US$22.8 million) for manipulating prices, its top economic planning agency said yesterday.

It is the first time that overseas businesses have been fined for price-fixing on the Chinese mainland.

Investigators found that between 2001 and 2006, South Korea’s Samsung and LG, and four Taiwan-based companies – AU Optronics Ltd, Chi Mei Corp, Chunghwa Picture Tubes Ltd and HannStar Display Corp – held 53 meetings in South Korea to reach agreements on LCD panel pricing, adding high costs to TV makers on the Chinese mainland and creating market disorder, the National Development and Reform Commission said in a statement.

“It’s an obvious activity of price-fixing and making unreasonable profit through their market positions,” the commission said.

Samsung, LG, AU Optronics and Chi Mei are the world’s top LCD panel makers.

Through the price fixing scheme, the six companies sold 5.1 million panels on the mainland, mostly from LG and Chi Mei, which amounted to 208 million yuan in revenue, according to the commission.

In addition to the fines, the companies were ordered to pay back a total of 172 million yuan to Chinese television makers who have been overcharged in the price fixing.

The commission said authorities also seized 36.8 million yuan from the companies, raising the total in the case to 353 million yuan.

The commission also is requiring the six makers of LCD TV panels sold in the domestic market to extend the free warranty from 18 to 36 months starting this year.

The warranty expansion is expected to save TV makers 395 million yuan in after-sales repair annually.

Liquid crystal display, or LCD, screens are widely used in televisions, computers and mobile devices.

The panel accounts for 70 to 80 percent of the cost of a television.

Some Chinese experts say some conglomerates violate industry rules in China just because its punishment is often not severe enough, Xinhua news agency said.

The fines have been a fractional sum compared with the huge profits the companies can reap from underhanded deals.

The six LCD companies also were investigated and fined by US and European regulators for manipulating LCD panel prices and breaking anti-competition laws.

Recently they were fined by US authorities US$1.2 billion, by European Union authorities 648 million euros (US$845.3 million) and by South Korean authorities 194 billion won (US$182.5 million), Xinhua said.


Zhu Shenshen, Shanghai

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