China fines LG and Samsung for fixing prices of flat panel displays

Suppliers have been hit by American and European regulators with penalties totaling more than $3 billion for colluding to push up slumping prices of display screens in 2001-06. US courts have sentenced 12 executives to prison.

In China, the display-manufacturing arms of Samsung Electronics Co and LG Electronics Inc, along with four Taiwanese companies, were ordered to pay $22.8 million in penalties plus repayment to Chinese customers and other charges, according to China's planning agency, the National Development and Reform Commission.

Envoys from LG Display, Samsung Display and the Taiwanese suppliers met every quarter in 2001-06 to set prices of screens at a time when supply outstripped demand, pushing down market prices, according to Western and Chinese regulators.

Samsung owns 85 percent of Samsung Display, the biggest display manufacturer. LG Display is a publicly traded company in which LG owns a 38 percent stake.

Nearly all the world's mobile phones and personal computers are assembled in China, making it a major market for display screens and other components imported from South Korea, Taiwan and other Asian economies.

The display makers "manipulated market prices and damaged the lawful interests of other companies and consumers," said an NDRC statement.

US prosecutors say some $74 billion in global sales of display screens were affected by the conspiracy. Customers included Apple Inc, Dell Inc and other producers of TVs, notebook computers and other electronics.

The Chinese penalties totaled 100 million yuan ($15.9 million) for Samsung Display and 118 million yuan ($18.7 million) for LG Display.

The Taiwanese companies and their fines were Chi Mei Corp, 94 million yuan ($14.9 million); AU Optronics Ltd, 21.9 million yuan ($3.5 million); Chunghwa Picture Tubes, Ltd, 16.2 million yuan ($2.6 million); and HannStar Display Corp, 240,000 yuan ($38,000).

The US Department of Justice says it has been awarded $1.4 billion in fines by courts while EU officials have imposed a total of 1.3 billion euros ($1.7 billion) in penalties.

China's fines were smaller because Beijing acted under its pricing law, which bases penalties on the improper income from individual sales, according to an NDRC statement.

It said Western anti-monopoly laws base penalties on the much larger amount of a company's total revenue but Beijing could not do that because its first anti-monopoly law was not enacted until 2008 and cannot be applied retroactively.