Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and LG, along with four Tawainese companies, are being fined for rigging the prices of LCD panels. They’ve been ordered to pay 144 million yuans and an additional 172 million yuan to the mainland buyers in China. Government officials also took 36.75 million yuan for themselves.
The small list of companies includes AU Optronics, Chi Mei Optoelectronics, HannStarr Display, and Chunghwa Picture Tubes. The National Development and Reform Commission reported that these companies were fined for priced-rigging between year 2001 and 2006.
The investigation originally started when the NDRC received numerous complaints of six companies fixing prices in late 2006. It was during that particular investigation that these companies admitted to fixing the prices on LCD flat panels which were supplied to the mainland market in China.
Yonhap News stated that this was the first time China punished a foreign company over anti-trust issues.
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) has yet to comment on the issue. A spokesperson for LG told Yonhap News that they wanted to prevent a recurrence of this.
NRDC data indicates that LCD panels makes up about eighty percent of the production cost for the color television set. The number has since dropped to seventy percent. The agency also noted that all six companies promised to extend the warranty periods for their LCD panels from 18 months to 36 months, which could save manufacturers 395 million yuans a year in maintenance costs.
China’s internet citizens seem to be satisfied with the recent ruling. Most of the country’s “netizens” expressed their support, but some were not so happy with the fines as they thought there should have been given harsher punishments.
Despite some negativity, it might not matter. As Professsor Wu Hong (Dean of the School of Economic Laws under China University of Political Science and Law) elaborated, “The incident is a milestone for Chinese market regulators who will act hard if anyone plays against rules.”
The fines should prove to be a victory for the Chinese market.