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Infineon and Samsung, among other giants, were fined $180 million for manipulating chip prices.
Publish Time:
2021-10-12 17:07
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Following the conclusion of an antitrust investigation, Infineon, Samsung, and Philips have been fined a total of €138 million (approximately $181 million) on September 3rd.
The antitrust regulators imposed the fine on the companies on Wednesday. Officials allege that the companies were involved in price-fixing of mobile SIM card chips.
The commission launched the investigation in 2008, alleging that Infineon, Philips, Samsung, and Renesas (then a joint venture between Hitachi and Mitsubishi) colluded to manipulate prices of smart card chips between September 2003 and September 2005. These companies are accused of coordinating their market behavior to control the prices of chips used in bank cards, passports, pay-TV cards, and other devices requiring memory functions.
Philips denied the price-fixing allegations and plans to appeal the commission's decision. The companies involved had attempted to settle the case with a 10% reduction in fines, but negotiations broke down last year.
The commission stated that the companies, through bilateral contracts, created a network to discuss pricing, contractual, and production capacity information to "decide how to respond to customer requests for price reductions," thus constituting price-fixing collusion. These activities violated the Treaty on the Functioning of the European Union (TFEU), which prohibits cartels and anti-competitive business practices.
Commissioner Joaquín Almunia stated: “In today's digital age, almost everyone uses smart card chips, whether in their mobile phones, bank cards, or passports. It is crucial that smart card chip manufacturers focus on innovation and offering good products at attractive prices to compete. If companies choose to collude on prices, sacrificing the interests of their customers and end consumers, they should expect sanctions.”
In total, Infineon will pay €82.8 million (approximately $109 million), Philips €20.15 million (approximately $26.5 million), and Samsung €35.12 million (approximately $46.2 million). The electronics giant received a 30% reduction in its fine for cooperating. Renesas was granted immunity and did not have to pay its approximately $67 million fine due to reporting the cartel to the authorities.
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