3. WHO
WHERE
WHEN
WHAT
Record cartel fine over
cathode-ray tubes (CDT and
CPT cartels)
PARTICIPANTS:
7 international
groups of
companies
PROSECUTOR:
The European
Commission
The cartel: between 1996 and
2006
The investigations: from 2007 to
2012
All over the entire European
Economic Area (EEA) and
the Asian market
THE CASE
4. "Everybody is requested to keep it as secret as it would be
serious damage if it is open to customers or European
Commission”
“Producers need to avoid price competition through controlling
their production capacity"
“These cartels for cathode ray tubes are 'textbook cartels': they
feature all the worst kinds of anticompetitive behaviour that are
strictly forbidden to companies doing business in Europe.”
( J. Almunia,Vice-president of European Commission for
Competition)
5. MARKET
BEFORE
• SUPPLY
o High fixed costs
o Fixed capacity
o Seasonality of sales
• DEMAND
o TV manufacturers and monitor makers manufacturers
o Around 2000 slow down with LCD and PDP
over-capacity decrease in price
COLLUSION
6. …TEXTBOOK CARTEL
Few firms
High concentration
Homogeneity of the good
Worldwide market share
of colour CRT
manufaturers in 1996
https://www.epa.gov/sites/production/files/2014-01/documents/computer_display_profile.pdf
(Chunghwa,Samsung, Philips,Panasonic,Toshiba, LG)
(technology for CRT)
7. The fluctuation in demand is low
o Inelastic market demand
o Inelastic supply response from producers of close substitutes
Ability to limit competition and make profits:
CDT - CPT
o Price fixing
o Market shares
o Output restrictions
o Exchange of information
o Price gap CPT
Monitoring the cartel
System of punishment
(target or floor)
(overall and for particular customers)
(to reduce oversupply)
(on prices,sales,production capacities)
(flat TV from $11,000 to $25,000 in 1999 in the USA vs TV from $290 to $2300 in 1990)
…TEXTBOOK CARTEL
8. 2007
• Chunghwa revealed the existence of the cartels to the
Commission
8th Nov
2007
• First inspections by European Commission in CRT sector
26th Nov
2009
• Commission sends Statement of objections to
participants:“two single and continuous infringements”
June 2012
• Another statement of objections on corporate liability of
2 companies
3rd Dec
2012
• The Advisory Committee agrees with EU Commission
about imposition of fines and their amounts
9. THE SEC0ND LARGEST FINE IN EU HISTORY (1.8 BILLION €)
492 million € 17 million € 43 million €
250 million € 71 million € 727 million €
209 million €
10. ANTITRUST
REGULATION IN
THE EU
"The following shall be prohibited as incompatible with
the internal market: all agreements between
undertakings…
(a) directly or indirectly fix purchase or selling prices
or any other trading conditions;
(b) limit or control production, markets, technical
development, or investment;
(c) share markets or sources of supply…”
(Article 101 of the Treaty of the Functioning of the
European Union)
11. THE SEC0ND LARGEST FINE IN EU HISTORY (1.8 BILLION €)
492 million € 17 million € 43 million €
250 million € 71 million € 727 million €
209 million €
100% 10%
40% 30%
0 € 38 million €
150 million € 509 million €
1.41 BILLION €
Appeal
Appeal
42 million €
179 million €
12. THE LENIENCY
NOTICE (2006)
IMMUNITY: the first firm which submits evidence – 100%
LENIENCY:
30-50% the first firm which provides evidence of added
value with respect to the evidence already in the
Commission’s possession.
20-30% the second one
Up to 20% the subsequent ones
SETTLEMENT: A firm, having seen the evidence in the Commission
file, choose to acknowledge its involvement in the cartel and its
liability for it. It may obtain a reduction of 10%.
