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Samsung, Philips and Infineon slapped with €138m fine for chip price fixing

SIM people just can't be trusted
Thu Sep 04 2014, 09:05
SIM cards were found to be more expensive than necessary

CHIP MAKERS involved in a price fixing racket stretching back over a decade have been fined €138m by European regulators.

An antitrust investigation into chips used in mobile device SIM cards found that Infineon, Philips and Samsung colluded to artifically manipulate the price of SIM card chips.

Renesas, a former joint venture between Hitachi and Mitsubishi, was also implicated in the investigation but was granted immunity after whistleblowing the existence of the cartel.

European Commission (EC) VP in charge of competition policy Joaquin Almunia said, "In this digital era smart card chips are used by almost everybody, whether in their mobile phones, bank cards or passports.

"It is crucial that the companies producing them focus their efforts on how to outperform their competitors by innovating and providing the best products at the most attractive prices. If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions."

The statement suggested that attempts had been made to reach an amicable settlement with the cartel, which operated from 2003 to 2005, under the terms of the EC 2008 settlement notice, but the EC reverted to pursuing its legal proceedings after encountering limited progress toward agreement.

The commission found that the cartel companies "used a network of bilateral contacts to determine their respective responses to customers' requests to lower prices" in contravention of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA).

The companies that were not granted immunity were fined a total of €138m, or about £110.3m.

Price fixing in the world of technology is nothing new. In 2005, Hynix was fined $185m for fixing the price of memory chips, while in 2012, a cartel also involving Samsung and Philips was forced to pay €1.47bn after it was revealed that it had fixed the price of cathode ray tubes. µ

 

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