CADE’s General Superintendence recommends condemnation of cartels in the markets of tubes’ components and LCD monitors

The General Superintendence of the Administrative Council for Economic Defense – CADE recommended, in opinions published in the Federal Official Gazette on 17 July, the condemnation of companies involved in cartels related to the international markets of the main components of tube monitors, LCD and notebooks.

The General Superintendence recommends the condemnation of the company Chunghwa Picture Tubes for collusive practice in the international market of color display tube – CDT’s production and sale (Administrative Proceeding nº 08012.010338/2009-99).  The product is the main component of tube monitors.

CADE’s investigative body also suggested the condemnation of the companies Chunghwa Picture Tubes, Epson Imaging Devices Corporation, Hannstar Display, INC, Hitachi Display, Inc and Sharp for cartel participation in the production and sale of Thin-Film Transistors – TFT, also known as TFT LCD screens (Administrative Proceeding nº 08012.011980/2008-12). The product is the principal component of monitors and notebooks.

According to the opinions issued by the General Superintendence, in both cases, the conduct had effects on competition and harmed as much the companies that bought the products from global dealers as consumers who bought monitors and notebooks equipped with these technologies.

The cartels involved the practice of regular exchange of sensitive information, such as production capacity, supply shortage and information on the release of new products. The companies also fixed prices, targeted prices and coordinated prices increase. The General Superintendence also verified conducts related to market division and output restriction related to the cartel in the CDT market.  

According to the investigations, the cartel in the CDT market operated between 1995 and 2007. The cartel in the TFT LCD market intervened between 2001 and 2006.

TCCs

Amidst the investigations, parties involved in both cases signed Cease and Desist Agreements (TCCs in its acronym in Portuguese) with CADE.

Regarding the TFT LCD Administrative Proceeding, the TCCs were signed with the companies Samsung Electronics Co., Ltd., Samsung Electronics Taiwan Co. Ltd., LG Display Co, * LG Electronics, INC (LGE), *LG Electronics Taiwan Taipei CO. LTD. (LGETT) and Au Optronics e Quanta Display Inc, in addition to individuals related to them.

Regarding the CDT Administrative Proceeding, the TCCs were signed with Philips, LP Displays International Limited and LG Electronics Inc.

By means of the TCCs, the parties admitted their participation in the anticompetitive conduct. They have also committed to cease the conduct and to collaborate with the ongoing investigation. Furthermore, they have collected pecuniary contribution to the Fund for the Defense of Diffuse Rights (FDD in its acronym in Portuguese).

As a result of the signature of the TCCs, the General Superintendence recommended to CADE’s Administrative Tribunal the filing of the Proceedings related to the agreements’ signatories.

CADE’s Administrative Tribunal, responsible for issuing the final decision, will now judge both Administrative Proceedings. If condemned, the companies will have to pay a fine ranging from 0.1 per cent to 20 per cent of their gross turnover in the year preceding the Proceeding.

These conducts have also been investigated and recently condemned by other jurisdictions.

* The companies adhered to the TCC signed between Cade and LG Display Co, which was the company that effectively recognized participation in the anticompetitive conduct.