BRUSSELS The European Commission imposed the biggest antitrust penalty in its history on Wednesday, fining six firms including Philips, LG Electronics and Panasonic a total of 1.47 billion euros (£1.19 billion) for running two cartels for nearly a decade.
The Commission said executives from the European and Asian companies met until six years ago to fix prices and divide up markets for TV and computer monitor cathode-ray tubes, technology now mostly made obsolete by flat screens.
Between 1996 and 2006 they met in Paris, Rome, Amsterdam and in Asia for "green meetings", so-called because they often ended in a round of golf.
"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," EU Competition Commissioner Joaquin Almunia said in a statement.
The EU antitrust regulator imposed the biggest penalties on Philips (PHG.AS) for its role in the price fixing and carving up of markets. The Dutch-based firm was fined 313.4 million euros and faces a further penalty through a joint venture.
However, Chief Executive Frans van Houten said the group would challenge what he called the disproportionate and unjustified penalty.
LG Electronics (066570.KS) of South Korea must pay 295.6 million euros plus its share of a joint venture penalty, followed by Panasonic Corp (6752.T) which was fined 157.5 million.
The Japanese firm said it might also make a legal challenge. "Panasonic believes the EU decision is factually and legally erroneous ... and will carefully review the decision and consider our options for appeal to the European courts," it said.
The Commission also fined Samsung SDI (006400.KS) 150.8 million euros, Toshiba Corp. (6502.T) 28 million euros, and French company Technicolor (TCH.PA) 38.6 million euros.
A joint venture between Philips and LG Electronics was penalised 391.9 million euros while two Panasonic joint ventures were also sanctioned.
Almunia said the violations were especially harmful for consumers, as cathode-ray tubes accounted for 50 to 70 percent of the price of a screen.
Cathode-ray tubes have largely been replaced by more advanced display technologies such as liquid-crystal display (LCD), plasma display and organic light-emitting diodes.
Philips sold off the business which committed the infringement in 2001 but said it would make a provision of 509 million euros in the fourth quarter for the fine.
ING analyst Fabian Smeets told ANP-Reuters that the sanction was significant, but had been expected. Philips' shares were down 0.82 percent to 19.93 euros at late afternoon, erasing earlier gains after news of the fines.
Technicolor said the fine, which will be booked as an exceptional item in its second-half accounts, would not affect its 2012 earnings and free cash flow targets.
Until now, the Commission's biggest antitrust penalty had been a 1.38 billion euro fine imposed on participants in a car glass cartel in 2008.
The Commission's sanctions followed a total fine of 128.74 million euros levied last year against four producers of the glass used in cathode-ray tubes.
Chunghwa Picture Tubes, Samsung Electronics (005930.KS), LG Display (034220.KS) and three other LCD companies were penalised a total 648 million euros two years ago for taking part in a cartel.