LG probed, Samsung spared

By Kim Yoo-chul

Samsung Electronics was spared from fines for fixing the price of LCD screens, officials from the nation’s top antitrust watchdog said. But its rival LG Display is under investigation and may face a heavy fine.

Under the current downswing in the LCD business, the firms’ contrasting fates are set to have a major impact on their business prospects.

Some sources say that Samsung took advantage of a whistle-blowing clause, although the company declined to comment.

``Leniency programs have proven particularly effective with more businesses cooperating in order to reduce or avoid fines altogether,’’ said an official from the Fair Trade Commission (FTC), asking not to be identified, Tuesday. “Samsung used it.”

Under leniency programs by the European Union (EU) and FTC, companies that cooperate with the anti-trust authority see their prospective penalties either wiped out or reduced.

``Proving price-fixing scams is really tough without cooperation from insiders,’’ added the official.

LG Display was the FTC’s primary target over its involvement in price-fixing cartels with Taiwanese LCD makers.

LG Display spokesman Frank Lee confirmed that LG was being investigated by the FTC. However, he declined to elaborate further citing the sensitivity of the issue.

The FTC has been widening the scope of its investigation into possible price-fixing by the world’s leading LCD makers. The FTC is currently investigating a total of 10 vendors.

Last month, the nation’s top antitrust watchdog revealed it discovered Samsung, LG Display and Chimel Innolux had colluded to fix LCD panel prices by using their bargaining power in the global market.

``The FTC plans to complete the investigation by the end of this year and the amount of fines will be decided afterwards,’’ added the official.

The FTC investigation comes on the heels of a similar probe by European regulators who, in December, found six LCD makers, including Samsung, had colluded for almost five years. Those vendors were fined a total of $881 million.

``Heavy fines are expected for LG, though Samsung was freed from levies after informing on the cartel,’’ said another FTC official adding the watchdog has not divulged the identities of the seven other manufacturers under investigation.

``The scope of the probe isn’t limited to South Korean companies because manufacturers from other countries, including Taiwan, are also under scrutiny,’’ the official on condition of anonymity.

LCDs are used in everything from handsets to televisions and Korea is home to the world’s top two LCD makers in Samsung Electronics and LG Display, while Taiwan’s Chimei Innolux follows them.

The situation for the industry’s top-tier LCD makers is looking bad as LCD prices are falling, hit by rising inventories and lower demand for LCD-embedded consumer electronics amid economic uncertainties.

The Korean LCD giants are expected to report operating losses in the third quarter of this year.

Samsung cut the number of its LCD executives by 10 percent, while LG Display told The Korea Times that it has no plans to build new LCD-producing factories next year.

The FTC also confirmed that Google and Apple were also its next targets for possible wrongdoings in Korea, though officials declined to give more details.

A Google spokesman here wasn’t available for comment, while Apple’s local representative Steve Park declined to give any information about the issue.