With their profit margin already squeezed, South Korean flat-screen makers LG.Philips LCD Co and Samsung Electronic Co are being probed by trade watchdogs from Japan, the US and South Korea over possible price-fixing collusion, newspaper reports said yesterday.
South Korean newspapers reported that Japan's Fair Trade Commission, South Korea's Fair Trade Commission (FTC) and the US Department of Justice began a joint investigation into Samsung to determine whether they violated fair trade rules.
Both Samsung and LG.Philips -- the top two manufacturers of liquid-crystal display (LCD) panels used for both flat-screen TV sets and PC monitors -- said they will cooperate with the investigation.
An official at the FTC confirmed that the probe was underway, with close cooperation among the trade watchdogs in Japan, South Korea and the US to secure the data necessary for the investigation, which could take two months.
Their rivals in Taiwan -- including AU Optronics Corp (友達光電), Chi Mei Optoelectronics Corp (奇美電子) and Chunghwa Picture Tubes Ltd (中華映管) -- have jumped into the market, making it hard for Samsung and LG.Philips to continue their lucrative business.
Experts predict that if the watchdogs found them guilty of collusion sometime after the second quarter next year, both would pay a price in the form of huge penalties and flagging credibility.
LG.Philips is forecast to be harder hit than Samsung if the watchdogs enforce penalties.
Shares in LG.Philips fell to a record low yesterday, declining 4.3 percent to close at 25,850 won in Seoul. Samsung ended 0.7 percent lower at 600,000 won.
In Taiwan, AU Optronics, the world's third-largest flat panel maker, said yesterday in a statement that it planned to cooperate with investigators in anti-competition probes into global panel makers by the US and Japanese fair trade watchdogs.
Officials at Chi Mei also said its wholly owned US unit, IDTech Co, would collaborate with US authorities during the investigation.
additional reporting by Lisa Wang