National Development and Reform Commission

China fines six firms - including LG and Samsung - over LCD price-fixing

Six suppliers, including Samsung, ordered to pay 350m yuan for manipulating flat-screen market; action follows fines by US and Europe

PUBLISHED : Saturday, 05 January, 2013, 12:00am
UPDATED : Tuesday, 11 October, 2016, 1:04pm

China has imposed penalties totalling 353 million yuan (HK$434 million) on six manufacturers of flat panel screens, including Samsung and LG Display, for fixing prices.

It is the first time China has issued a penalty against a foreign firm for fixing prices. The penalty relates to infringements between 2001 and 2006.

The National Development and Reform Commission's (NDRC) penalty includes 144 million yuan in fines and the repayment of 172 million yuan that Chinese customers overpaid, the economic planning body said.

The US and the European Union have previously fined panel makers for fixing prices through similar cartels, including Samsung, LG Display and Sharp.

The other four companies included in the judgment are Taiwanese - Innolux, AU Optronics, Chunghwa Picture Tubes and HannStar Display.

The NDRC said investigators found representatives of LG, Samsung and the four Taiwanese suppliers met 53 times in the six years before 2006 to agree on prices to charge for flat panel screens sold to mainland manufacturers. The six suppliers sold 5.15 million flat panel screens under manipulated prices during the period.

Samsung sold 826,500, LG 1.93 million displays and Taiwan's Innolux 1.57 million.

Samsung will have to pay 101 million yuan while LG will have to pay 118 million yuan.

Xiang Ligang, an industry commentator on telecommunications and electrical equipment, said mainland companies were at a disadvantage in relation to flat panel screens because most of the parts must be imported. "Only two Chinese firms are making the products, according to my knowledge," Xiang said.

LCDs (liquid crystal displays) are widely used in electronics including televisions, mobile phones, computers and tablets.

Zhang Bing, a Shenzhen-based research director of market research firm NDP DisplaySearch, said 80 per cent of the LCDs for televisions made on the mainland were imported.

Zhang said though the mainland manufacturers were improving their technologies and exploring new products, "in the next five years" China has to import the majority of its needs.

Zhang added it would be difficult for more mainland companies to break into the industry.

"A single production line will cost 20 billion yuan, or more than US$3 billion," Zhang said.

Samsung's display-making unit said in a statement it stopped taking part in any form of price-fixing at the end of 2005, and that the company would abide by China's fair-trade law.

LG Display said that the decision covered events between 2001 and 2006, and "we do not expect this decision to impact our relationship with customers or panel sales".