By Kim Yoo-chul
Staff Reporter

Samsung Electronics, the world's biggest manufacturer of flat-screen television sets, has denied alleged price fixing of its consumer goods with local distributors in Latvia.

The Suwon, Gyeonggi Province-based technology giant plans to bring the possible cartel allegation issue to court as Samsung disagrees with the Latvian Competition Council's (LCC) resolution accusing it of participating in arrangements leading to unfair competition.

"Samsung has been internally investigating such claims for firm clarification. We are seriously considering taking the issue to court," a Samsung spokesman said Tuesday.

"Samsung is now reviewing the allegations in detail and is considering all available legal remedies to achieve a fair solution to this case," he added.

The imminent measure came after the LCC discovered illegal cartel arrangements among five distributors of Samsung Electronics' products and fined them a total of $17.5 million.

The council said that all five of the companies concluded secret agreements in 2007 and 2008 that resulted in market division, free trade limitations, and fixing prices for Samsung's electronic equipment.

It also said that in sales deals with wholesalers, "Samsung Electronics Baltic" imposed territorial sales restrictions, which also distorted competition that could potentially have a lowering effect on prices.

The competition regulator said that because of the illegal cartel arrangements among the Samsung distributors, consumers had incurred significant losses as they had continuously overpaid for products.

LCC has imposed the biggest fine of some $8.5 million on Samsung as the initiator of the illegal cartel arrangements, reports said.

But some industry watchers and officials have interpreted the LCC's latest measure as a way to raise more taxes amid a sluggish local economy.

Under the International Monetary Fund (IMF) and EU programs, Latvia has to take measures to reduce its budget deficit in the coming years.

The country wants to reach the standard for euro adoption by 2014, retaining its currency peg all the way.

Latvia must cut its budget gap to keep receiving funds from the IMF. It is slashing spending and raising taxes to keep to the IMF and EU program without devaluing its currency, which is pegged to the euro.

This year, the country slashed pensions and public sector salaries and raised taxes in order to make savings of $1.06 billion in 2009 and 2010.

Samsung aims to end this year in profit, increasing gross profit on sales of its core products ― LCD TV sets and mobile phones ― and strictly monitoring expenditure.

In January this year, Samsung set up a sales company in Latvia to reinforce its presence in the region. It was earlier represented in the Baltic region by the Dutch administrative unit Samsung Electronics Overseas.

Samsung posted $274 million in its Baltic sales in 2007, with Latvia accounting for 35 percent of the total.

yckim@koreatimes.co.kr