Philips reeled into CRT 'cartel' investigation

Philips became the latest company named in a worldwide investigation into possible price-fixing in the market for CRTs for TVs and computer monitors.

Koninklijke Philips Electronics became the latest company named in a worldwide investigation into possible price-fixing in the market for cathode-ray tubes used in TVs and computer monitors.

Wednesday's announcement came one day after the European Commission said that it had fined Sony, Fuji and Maxell a total of US$109 million for price fixing in a different market, that for professional videotape. Sony's fine was increased for obstructing the investigation.

The Commission said earlier this month that it had raided offices of several CRT (cathode-ray tubes) makers for suspected cartel involvement, although it didn't name them. It was part of a wider clampdown on suspected collusion between CRT manufacturers. Korea's Fair Trade Commission is also examining possible cartel behavior at CRT makers affiliated with Matsushita and Samsung Electronics, according to reports.

Cartels are secret agreements between manufacturers designed to fix prices, restrict supply or divide up markets. They're illegal because they can lead to higher prices for consumers, and the Commission can fine companies up to 10 percent of their annual revenue if they are found guilty.

Philips said on Wednesday that authorities in several jurisdictions have began investigating it for possible anticompetitive behavior. Spokesman Joon Knapen would not comment further. The company said it was cooperating with the investigations and that its policy is to comply with competition laws.

"As these matters are in the very early stages, Philips is not in a position to predict or comment on their outcome," the company said.

CRTs are being edged rapidly out by LCDs (liquid crystal displays) and other flat-screen displays, although they are still sold in many TV sets. Philips manufactured CRTs until about 2001, when it dissolved its components business and shifted CRT manufacturing to a joint venture with LG Electronics.

The Commission said there is no strict deadline for its inquiry. Authorities in the U.S. have also been involved in the worldwide investigation, according to reports.

In the videotape case, the Commission said that Sony, Fuji and Maxell colluded to hike up prices for professional videotape sold in Europe between 1999 and 2002. The case involved Betacam SP and Digital Betacam tapes, widely used by advertising companies and independent TV producers.

Sony's fine was increased by 30 percent for obstruction, the Commission said: One of its employees refused to answer questions during a site visit from investigators, while another was found to have shredded evidence. The fines for the other two companies were reduced because they cooperated with the investigation.

The three companies held more than 85 percent of the professional tape market. They organized three rounds of price increases, according to the Commission, which said it found evidence of 11 meetings where the agreements were worked out.

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