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U.S. fines Korean firms $1.27b for price fixing
FTC advises companies to abstain from contacting with rivals
By Kim Yon-sePublished : Nov. 13, 2012 - 19:55
Korean enterprises ranked second in terms of fines levied by U.S. antitrust regulators for price fixing via practices such as cartels.
Since several firms were slapped with antitrust fines totaling $1.57 million for rigging prices of a biochemical product in 1996 in the first case of its kind, Korean enterprises have been subject to collective penalties of $1.27 billion over the past 16 years.
The amount is the second-largest accumulated figure, following $1.36 billion imposed on Japanese firms, according to data from the Fair Trade Commission of Korea.
In terms of severity of penalties, three Korean firms ― LG Dispaly, Samsung Electronics and Korean Air ― were included in the top 10 list.
LG Display was fined $400 million for fixing prices of thin film transistor liquid crystal display, or TFT-LCD, panel products by the U.S. Justice Department in 2008.
It was reportedly the second-largest criminal fine ever imposed by the department’s antitrust division. Along with LG Display, two other companies ― Sharp Corp. and Chunghwa Picture Tubes ― paid fines of $120 million and $65 million, respectively, for the same offence.
According to the settlement, the three companies colluded to charge predetermined prices for the TFT-LCD panels between 2001 and 2006.
In 2005, Samsung Electronics was slapped with a $300 million penalty for fixing memory chip prices with its competitors in the U.S. market.
The company was found to have colluded with other manufacturers to fix the price of dynamic random access memory chips sold to U.S. computer makers in 2002. A Samsung senior executive was ordered to spend 10 months behind bars after he pleaded guilty.
Two other chipmakers involved in the case, Hynix Semiconductor of Korea and Infineon Technologies AG of Germany, were fined $185 million and $160 million, respectively.
In 2007, the U.S. Justice Department charged Korean Air and U.K.-based British Airways with price fixing on passenger and cargo flights. Both airlines agreed to plead guilty and to pay $300 million each in criminal fines.
The charges filed in the U.S. District Court for the District of Columbia said Korean Air conspired with competitors to fix rates on international air cargo shipments between at least 2000 and 2006.
FTC officials said that the U.S. has become one of the few countries that is strict against price-fixing since President Barack Obama declared war on international cartels.
“The country has tightened its crackdown on collusion and price-fixing and if found guilty, company executives are to face criminal charges and civil suits as well as large fines,” a director general said.
He recommended that attending executives refrain from contacting those from rival companies, saying “a meeting for a simple purpose of information collecting can be punishable and even if collusion takes place, it’s also possible that the rival company may abandon the agreement.”
He also advised the use of the “leniency program,” which shelves punishment for companies that voluntarily admit collusion.
By Kim Yon-se (kys@heraldcorp.com)
Since several firms were slapped with antitrust fines totaling $1.57 million for rigging prices of a biochemical product in 1996 in the first case of its kind, Korean enterprises have been subject to collective penalties of $1.27 billion over the past 16 years.
The amount is the second-largest accumulated figure, following $1.36 billion imposed on Japanese firms, according to data from the Fair Trade Commission of Korea.
In terms of severity of penalties, three Korean firms ― LG Dispaly, Samsung Electronics and Korean Air ― were included in the top 10 list.
LG Display was fined $400 million for fixing prices of thin film transistor liquid crystal display, or TFT-LCD, panel products by the U.S. Justice Department in 2008.
It was reportedly the second-largest criminal fine ever imposed by the department’s antitrust division. Along with LG Display, two other companies ― Sharp Corp. and Chunghwa Picture Tubes ― paid fines of $120 million and $65 million, respectively, for the same offence.
According to the settlement, the three companies colluded to charge predetermined prices for the TFT-LCD panels between 2001 and 2006.
In 2005, Samsung Electronics was slapped with a $300 million penalty for fixing memory chip prices with its competitors in the U.S. market.
The company was found to have colluded with other manufacturers to fix the price of dynamic random access memory chips sold to U.S. computer makers in 2002. A Samsung senior executive was ordered to spend 10 months behind bars after he pleaded guilty.
Two other chipmakers involved in the case, Hynix Semiconductor of Korea and Infineon Technologies AG of Germany, were fined $185 million and $160 million, respectively.
In 2007, the U.S. Justice Department charged Korean Air and U.K.-based British Airways with price fixing on passenger and cargo flights. Both airlines agreed to plead guilty and to pay $300 million each in criminal fines.
The charges filed in the U.S. District Court for the District of Columbia said Korean Air conspired with competitors to fix rates on international air cargo shipments between at least 2000 and 2006.
FTC officials said that the U.S. has become one of the few countries that is strict against price-fixing since President Barack Obama declared war on international cartels.
“The country has tightened its crackdown on collusion and price-fixing and if found guilty, company executives are to face criminal charges and civil suits as well as large fines,” a director general said.
He recommended that attending executives refrain from contacting those from rival companies, saying “a meeting for a simple purpose of information collecting can be punishable and even if collusion takes place, it’s also possible that the rival company may abandon the agreement.”
He also advised the use of the “leniency program,” which shelves punishment for companies that voluntarily admit collusion.
By Kim Yon-se (kys@heraldcorp.com)
