Sony, Fuji and Hitachi Maxwell face fines for Videotape Cartel Based on Levels of Involvement and Cooperation
The European Commission imposed fines totaling €74 Million on Sony Corp., Hitachi Maxwell Ltd. and Fujifilm Holding Corp. in November 2007. The companies have admitted to violating Article 81 of the EC Treaty, which governs restrictive business practices and cartels, between 1999-2002. The three are believed to have operated an illegal price-fixing cartel, artificially inflating prices of their professional videotapes across Europe. The three media conglomerates had a combined share of 85% of the European market during the time in question.
The Commission raided the companies’ European offices in May 2002, and based its financial penalties on evidence that the corporations illegally worked together to fix prices on professional videotapes used by corporate and independent television stations, producers, advertisers and other industry entities. The companies met to discuss anti-competitive initiatives on at least 11 occasions. They agreed to set and then implement illegal prices in tandem based on agreements made during at least three of the meetings, according to the Commission. When they did not set price increases, they relied on other means of price stabilization. The companies also exchanged sensitive industry information, and monitored one another to ensure compliance with cartel decisions.
Prices for the two most popular formats of professional videotape, Betacam SP and Digital Betacam, generate sales in excess of €115 annually.
The heaviest fine was imposed on Sony, reaching €47.2 million, because it failed to cooperate with the Commission’s investigation and did not admit to wrongdoing until after receiving the Commission’s official Statement of Objections. A Sony employee is alleged to have shredded documents during the raid, and another is accused of refusing to answer investigators’ questions. Sony’s penalty was increased by 40% to punish its failure to cooperate fully in the Commission’s investigation.
Fujifilm and Hitachi Maxwell are said to have fully complied with the investigation, going so far as supplying additional evidence that filled out details of the cartels’ behavior. As a result, Fujifilm’s fine was reduced 40%, to €13.2 million, and Hitachi Maxwell’s was reduced by 20% to €14.4. European Commission fines are based on the level of culpability of alleged anti-trust violators, and are set at a level that rewards a colluder’s relative level of cooperation.
The Commission has encouraged individuals and corporations who may have suffered from the illegal behavior between 1999 and 2002 to seek private damages from the companies.
This case marked the first time that the Commission used powers granted to it in 2006 to impose relative fines based on the culpability of each offender, and the economic significance of the anti-competitive behavior to consumers in the European Economic Area.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
The Commission raided the companies’ European offices in May 2002, and based its financial penalties on evidence that the corporations illegally worked together to fix prices on professional videotapes used by corporate and independent television stations, producers, advertisers and other industry entities. The companies met to discuss anti-competitive initiatives on at least 11 occasions. They agreed to set and then implement illegal prices in tandem based on agreements made during at least three of the meetings, according to the Commission. When they did not set price increases, they relied on other means of price stabilization. The companies also exchanged sensitive industry information, and monitored one another to ensure compliance with cartel decisions.
Prices for the two most popular formats of professional videotape, Betacam SP and Digital Betacam, generate sales in excess of €115 annually.
The heaviest fine was imposed on Sony, reaching €47.2 million, because it failed to cooperate with the Commission’s investigation and did not admit to wrongdoing until after receiving the Commission’s official Statement of Objections. A Sony employee is alleged to have shredded documents during the raid, and another is accused of refusing to answer investigators’ questions. Sony’s penalty was increased by 40% to punish its failure to cooperate fully in the Commission’s investigation.
Fujifilm and Hitachi Maxwell are said to have fully complied with the investigation, going so far as supplying additional evidence that filled out details of the cartels’ behavior. As a result, Fujifilm’s fine was reduced 40%, to €13.2 million, and Hitachi Maxwell’s was reduced by 20% to €14.4. European Commission fines are based on the level of culpability of alleged anti-trust violators, and are set at a level that rewards a colluder’s relative level of cooperation.
The Commission has encouraged individuals and corporations who may have suffered from the illegal behavior between 1999 and 2002 to seek private damages from the companies.
This case marked the first time that the Commission used powers granted to it in 2006 to impose relative fines based on the culpability of each offender, and the economic significance of the anti-competitive behavior to consumers in the European Economic Area.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: eu competition law, eu law, european antitrust lawsuits, fuji, hitachi, sony, videotape
posted by European Antitrust Law at
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