By Kim Yoo-chul
LG Electronics and Samsung SDI said Thursday that they will appeal heavy cartel fines imposed by the European Union antitrust regulators for alleged price-rigging on now-obsolete cathode ray tubes (CRT).
Early Thursday (KST), the European Commission (EC) levied a record-breaking 1.47 billion euro ($1.92 billion) fine on six companies including Samsung and LG, and Toshiba of Japan for colluding to fix prices in two global cartels between 1996 and 2006.
LG Electronics must pay a 295 million euro fine in addition to a 195 million euro fine levied on the firm over claims that LG Philips Display (LPD), a CRT unit it once jointly owned, was also involved in the cartel. Samsung SDI must pay 81.4 million euro.
``These cartels for CRTs are textbook cartels. They feature all the worst kinds of anti-competitive behavior that are strictly forbidden to companies doing business in Europe,’’ said competition commissioner Joaquin Almunia, adding the price-fixing scheme harmed European consumers.
In a statement following the EC’s announcement, LG said it will take the case to court before the February 2013 deadline in an appeal, although the schedule has yet to be decided.
The company pointed out that the EC decision, which ordered it to pay a share of the now-dissolved joint venture between LG and Philips penalty, doesn’t make any sense as LG Electronics had divested itself of CRT activities by transferring them to LPD in July 2001.
``LPD had been operated as a totally independent company. It’s true that LG Electronics had previously owned a 50 percent stake in that joint venture. But LG Electronics has no legal responsibility for the penalty. LPD was not consolidated in LG Electronics’ accounts,’’ said spokesman Yoon Won-il. LPD went bankrupt in 2006.
``We have no responsibility to pay any penalties for alleged price-fixing cartels concerning our CRT activities before the establishment of LPD because the reason is simple _ under EU competition law, companies have no legal responsibility to pay anything if the investigation is conducted five years after such activities ceased,’’ said Yoon.
The EU started its investigation of the six companies for price-fixing in 2007.
According to LG, the world’s second-biggest TV producer, anti-trust watchdogs in Korea, Japan, Canada, the United States and the Czech Republic cleared the company of being involved in a price-fixing cartel and decided not to impose fines.
Samsung SDI said that it will also protest the EU decision. ``SDI will appeal and implement further legal measures if needed,’’ said spokesman Seo Hae-su.