China fines Samsung, LG for flat panel price-fixing

Summary:The Chinese government has fined Samsung, LG and four Taiwanese companies US$56 million for manipulation of market prices of flat panel screens.

China has fined Samsung and LG along with four Taiwanese firms a total 353 million yuan (US$56 million) for price-fixing of flat panel screens.

The move by China's National Development and Reform Commission is the first time any foreign company has been penalized for anti-trust issues in China, Yonhap News Agency reported Friday.

The four Taiwanese companies fined were AU Optronics, Chunghwa Picture Tubes, HannStar Display, and Chi Mei Optoelectronics.

An official from the commission said the six companies held 53 rounds of "crystal conferences" or meetings between 2001 and 2006, claiming these were to exchange information on the global LCD (liquid crystal display) panel market.

"Those involved turned out to have negotiated prices or manipulated prices [of the screens], hampering legitimate rights and interests of other parties and consumers," the official said.

Out of the total fine, 172 million yuan (US$27 million) was paid as a refund to nine Chinese TV makers, including Konka Group, Changhong Electric, Skyworth Group and TCL Corp, Yonhap reported.

Samsung and LG were hit with the biggest penalities, with a fine of 101 million yuan (US$16 million) and 118 million yuan (US$18 million), respectively.

Sales of 5.15 million pieces of LCD panel in China during the period were recognized under the monopolistic behavior in the case, among which 826,500 pieces were sold by Samsung while 1.93 million were sold by LG Electronics, according to a Sina News report on Friday.

The commission said Samsung, LG and the four Taiwanese companies have committed to strictly abide by the Chinese laws, engage in a fair competition and extend the unpaid warranty service period for China's domestic TV makers to 36 months from the previous 18 months, the report noted.

A spokesperson from LG Display, an affiliate of LG Electronics, said the company is focused on its efforts to block price-rigging. "To prevent a recurrence of such problems, LG Display has been mending policies and executing them, and remains committed to operating with compliance and transparency," he said.

Samsung declined to comment, the report added.

Both Samsung and LG have been fined in the past for price-fixing activity. Last March, the South Korean Fair Trade Commission (FTC) fined Samsung, LG and local telcos SK Telecom, KT Corp and LG Uplus a total of 45.3 billion won (US$40.1 million) for price rigging and customer fraud.

ZDNet Asia's Jamie Yap contributed to the report.

Topics: Legal, China, Hardware, Samsung, Tech Industry

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Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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Jamie Yap covers the compelling and sometimes convoluted cross-section of IT and homo sapiens, which really refers to technology careers, startups, Internet, social media, mobile tech, and privacy stickles. She has interviewed suit-wearing C-level executives from major corporations as well as jeans-wearing entrepreneurs of startups. Prior... Full Bio

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