CADE’s General Superintendence recommends condemnation in the market of the main component of TVs tube

The General Superintendence of the Administrative Council of Economic Defense – CADE suggested, in an opinion published in the Federal Official Gazette on 8 March 2017, the condemnation of four companies and one individual for the involvement in a cartel in the international market for the production and sale of Color Picture Tubes – CPTs. The product is the main component of the tube used in televisions (Administrative Proceeding nº 08012.002414/2009-92).

The General Superintendence recommends the condemnation of the individual as well as the following companies: Chunghwa Pictures Tubes Ltd., Technicolor S/A (former Thomson S/A), MT Picture Display Co. Ltda. (former Matsushita Toshiba Picture Display) and Toshiba Corporation. 

According to the Superintendence´s investigation, the cartel operated between 1995 and 2007. The conduct affected competition in the CPTs’ market by harming companies that purchased television tubes on a large-scale, and ultimately negatively affected consumers in Brazil.

The collusion included a regular exchange of commercially sensitive information regarding production capacity, supply shortages, customers’ quality requirements and the launching of new products. The companies also perpetrated the anticompetitive practices of price fixing, market division and restriction of production.

The case will now be analyzed by CADE’s Tribunal, which is responsible for the final decision. In the case of condemnation, the companies may pay fines starting from 0, 1% to up to 20% of its turnover in the previous year of the initiation of the proceeding.

The conduct was the subject of recent investigations and condemnations in other jurisdictions.

Agreements

 In February 2015, the companies Koninklijke Philips N.V., Philips do Brasil Ltda., LP Displays Amazônia Ltda., LP Displays International Limited, LG Eletronics Inc. and LG Eletronics do Brasil Ltda. and five individuals signed Cease and Desist Agreements (TCCs for its acronym in Portuguese) with CADE.

By means of the agreements, the parties acknowledge their participation in the investigated conduct. They also committed to ceasing the anticompetitive practices and to cooperating with the investigating team. Moreover, the agreements resulted in the collection of more than BRL 42 million for the Fund for the Defense of Diffuse Rights – FDD as pecuniary contribution.

The TCCs resulted in the General Superintendence recommendation to CADE’s Tribunal to file the Administrative Proceeding related to the companies that signed the agreements and their employees.