LG to appeal $285 mil. EU fine, Samsung spared for voluntary report
By Kim Yoo-chul
LG Display, the world's second-biggest LCD maker, is considering appealing against a fine of 215 million euros ($285 million), levied by the European Commission (EC) for a price-fixing scheme.
``We may take the fine imposition to the General Court in the commission upon review of the situation,’’ said an LG Display spokesman Sohn Young-june, Thursday.
LG’s rival, Samsung was also involved in the cartel but volunteered to report the scheme to the European authorities and received no penalty in return.
The official remarks come after European Union (EU) regulators charged LG with breaching EU laws on restrictive business practices in July, last year.
The EC told LG to pay some $285 million for fixing prices of LCD panels with five other firms between 2001 and 2006.
The European regulators claimed the cartel members held monthly multilateral meetings and further bilateral meetings.
In total, they met around 60 times mainly in hotels in Taiwan for what they called ``the crystal meetings.’’
Samsung Electronics and LG Display are the industry’s two biggest vendors of LCD panels, shipping parts to almost all technology companies including Apple, Dell and Hewlett-Packard (HP).
LG’s Sohn said he expects the amount of the fine to be cut as the company is planning to fully cooperate with the EC and added it will strengthen transparency in management by implementing some needed reform measures.
``The decision will not hurt the relationships with our bigger clients. We will keep up our work to supply value-added products to them,’’ the spokesman said.
Despite the levies, LG Display rose by 1.99 percent to end at 41,050 won per share on the KOSPI, Korea Exchange (KRX), the bourse operator, said.
Market analysts say the fine will just be a ``one-time event’’ as it was widely anticipated and expects operating profit to rise from the first quarter of next year.
``The EC’s decision will cause a shortcoming. LG Display will fall to rock bottom from the fourth quarter and its share corrections are giving good chances for investors to buy,’’ said Park Hyun, an analyst at Hanwha Securities, in a note to clients.
``LG will suffer from a 544.4 billion won operating loss in the fourth quarter hit by the industry’s bearish mood, however, the amount will decrease to 55.8 billion won in the first quarter of 2011,’’ added Park.
Samsung Electronics was also part of the ``price-cartel’’ group.
But Samsung received full immunity from the fines under the commission’s leniency program as it was the first to provide valuable information on the cartel to prove the infringements.
Article 101 of the EU Treaty prohibits price-fixing and other practices restrictive of competition.
``I don’t understand Samsung’s moves against business virtues. Samsung is lacking full prudency. It’s too bad,’’ said a top-ranking industry executive, asking not to be identified.
``Samsung was absolved of any fines as it blew the whistle on the cartel,’’ added the executive.
Taiwanese LCD makers also blamed Samsung over its willing action to be freed from any wrongdoings.
Taiwan-based Chi Mei Optoelectronics and three other Taiwanese firms were also fined. Taiwanese LCD makers have been previously known to take action against Samsung, industry sources said.
Song Cheol-gyu, a Samsung spokesman, declined to comment.
Officials at Taiwanese makers weren’t available for comment.
In the U.S. Department of Justice antitrust investigation, eight companies, including LG Display, Chi Mei, Chunghwa Picture Tubes, Sharp and Hitachi Displays, have pleaded guilty and paid more than $890 million in criminal fines for price-fixing, in a separate case.