Chimei Innolux Corp (奇美電子) was given a heavy fine by the European Commission for allegedly fixing the price of flat panels because it opted not to cooperate with European authorities in its investigation of the case, an EU official said yesterday.
Chimei Innolux was one of five companies fined a total of 649 million euros (US$859 million) by the European Commission on Wednesday for operating a cartel that colluded on flat-panel prices between Oct. 5, 2001 and Feb. 1, 2006.
Though the company, then known as Chi Mei Optoelectronics, had a lower market share than South Korean rivals LG Display Co and Samsung Electronics Co -during the period, its 300 million euro fine was the highest among the companies involved in the alleged conspiracy.
LG Display was fined 215 million euros, while Samsung, the world’s biggest flat-panel maker, was not disciplined because it reported the price collusion activities to European authorities.
“Their fine is lower than that of Chimei Innolux because both Samsung Electronics and LG Display have cooperated with the Commission investigation under the Commission’s Leniency Notice,” European Commission Competition Policy spokeswoman Amelia Torres wrote in an e-mail to the Central News Agency.
Chimei Innolux also had this option, but decided not to avail itself of it, Torres said.
“Chi Mei Optoelectronics had all possibilities to blow the whistle itself between October 2001, when the cartel started, until March 2006, when Samsung blew the whistle. If it had done so, it would have received no fine,” she said.
Torres added that Chi Mei could have cooperated with the European Commission after March 2006 to obtain a reduction of its fine, but “it has chosen not to do so.”
Chimei Innolux did not immediately respond to Torres’ comments.
Terry Gou (郭台銘), the chairman of Chimei Innolux’s parent company, Hon Hai Precision Industry Co (鴻海精密), strongly -protested the fine on Friday, saying his company would not pay money it should not have to pay and questioned why its fine was out of proportion to its market share.
Gou also said that the company had yet to receive formal notification of how the European Commission calculated the fine.
Torres acknowledged that the full text of the decision with all the reasoning had yet to be sent, but she called it standard procedure and said it would be forwarded to the company in the coming days.
“The company’s lawyers were informed one week before of the likely date of the Commission decision,” Torres said. “The full text of the 140-page decision will contain a full explanation on how the fines were calculated.”
Gou said Chimei Innolux would wait for the document before deciding whether to appeal the case. Regardless of what the company decides, it will have three months to respond.
“Chimei Innolux has three months after the notification of the decision to either pay the fine or, in case the company appeals, to provide for a bank guarantee or a provisional payment,” Torres said.
Torres also made it clear that the European Commission was accusing Chi Mei Optoelectronics staff, rather than Gou, of having knowledge of the cartel meetings and the price fixing that allegedly occurred.
Three other Taiwanese manufacturers that were fined in the case are AU Optronics Corp (友達光電) with a 117 million euro fine, Chunghwa Picture Tubes Ltd (中華映管) with a 9 million euro fine and HannStar Display Corp (瀚宇彩晶) with an 8 million euro fine.