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Semiconductors and Components

Infineon, Philips, Samsung Fined Millions by EU

03 September 2014

The European Union’s executive arm Wednesday (Sept. 3) levied fines totaling 138 million euro (about $181.5 million) against Infineon Technologies AG, Philips NV, and Samsung Electronics Co. Ltd. for allegedly colluding to set prices for smart card chips from late 2003 to late 2005.

The European Commission (EC) said through a statement that the three companies and Japan’s Renesas Technology colluded to form a cartel through a network of bilateral contacts to determine their respective responses to customers' requests to lower prices.

The four companies “discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilization and their future market conduct,” according to the commission. Such behavior violates EU rules, the commission said.

The EC level fines totaling about 83 million euro (about $108.8 million) against Infineon, about 35 million euro (roughly $46.2 million) against Samsung and about 20 million euro (roughly $26.5 million) against Philips.

Renesas (now Resesas Electronics Corp.) received full immunity from fines for revealing the existence of the cartel to the commission in 2006, the commission said. Samsung’s fine was cut by 30 percent because the company cooperated with the investigation, the commission said.

Smart card chips are used in mobile phone SIM cards, bank cards, identity cards and passports, pay TV cards and other applications.

"In this digital era smart card chips are used by almost everybody, whether in their mobile phones, bank cards or passports,” said Joaquín Almunia, the EC vice president in charge of competition policy, in a statement. “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.”

Philips divested its smart card chip business in 2006 through the spin out of NXP Semiconductors. But Philips remains liable for what happened during the period of the infringement, the commission said.

Philips plans to appeal the ruling, the Reuters news service reported.

The EC said it had initially explored the possibility of settling the case with some of the companies involved in 2008. But the EC decided in 2012 to discontinue discussions because of a lack of progress, the statement read.

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