The European Commission has slapped a €138m fine on three tech companies after finding them guilty of having a smart card chips cartel, concluding a six-year-old case.
Samsung, Philips, Infineon and Renesas – a joint Hitachi and Mitsubishi venture – were discovered to have co-ordinated their market behaviour for smart card chips, which are used in mobile phone SIM cards, bank cards, passports and other applications.
The European Commission (EC) imposed the fines when its investigation revealed that the companies had colluded together via bilateral contacts between September 2003 and September 2005, breaching anti-cartel EU rules within the European Economic Area.
The cartel saw the four companies reach a consensus about how to deal with responses to customer requests to lower smart card chip prices.
The EC revealed that sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilisation and their future market conduct, was shared and discussed between the four companies. Such behaviour was found to have breached Article 101 of the Treaty on the Functioning of the European Union.
Joaquin Almunia, vice president in charge of EC competition policy, declared that companies need to focus their efforts on competition in order to deliver the best products at attractive prices. He added: "If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions."
In October 2008, the EC started investigations into the cartel over smart card price fixing, customer allocation and the exchange of sensitive commercial information. Since then the investigation has been ongoing, with the EC announcing in June that it was nearing a conclusion to its antitrust case.
The EC had looked at the possibility of settling the case with the companies in order to reach common ground on what constitutes a cartel. But in 2012, it decided to revert back to its investigation procedures after discussions with the companies failed to progress.
While the four companies were found to have established a cartel, Renesas received full immunity by whistleblowing to the European Commission.
Samsung has to pay a fine of €35m, although it wriggled out of 30 percent of its share of the fine by co-operating with the EC's investigation. In a statement sent to V3 Samsung said: "We are carefully reviewing the European Commission's decision and have no further comments at this stage."
While Philips got rid of its smart card chips business after the infringement, it still remains liable for its activity during the period it was involved in the cartel. It has to pay a fine of €20m.
Philips told V3 that it does not agree with the EC's conclusion: "We do not agree with the decision by the European Commission as we firmly believe that claims of anti-competitive behavior by the former Philips smart card chips business are unfounded." Philips said it plans to appeal the EC's decision.
The largest fine was handed to Infineon, at €82.7m. V3 contacted the company but had received no reply at the time of publication.
Microsoft has also incurred the scrutiny of Chinese authorities, which have given the company 20 days to respond to antitrust accusations.
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