Thought I'd post this since it's relevant for the upcoming financial report for this quarter:
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/20/AR2007112000360.html
BRUSSELS (Reuters) - The European Commission hit Sony Corp (6758.T) and two other Japanese producers of videotape with fines totaling nearly 75 million euros ($109.8 million) on Tuesday for fixing prices.
"Between 1999 and 2002, Sony, Fuji and Maxell managed to raise or otherwise control prices through a series of regular meetings and other illicit contacts," the European Union executive said in a statement.
Sony's fine was increased by 30 percent to just over 47 million euros after it obstructed the investigation, the statement said.
The fines for Fujifilm Holdings Corp (4901.T) and Hitachi Maxell Ltd (6810.T) were reduced by 40 and 20 percent respectively -- to 13.2 million and 14.4 million euros -- after they co-operated with the investigation.
"This decision sends two warnings to companies engaging in cartel activities," European Competition Commissioner Neelie Kroes said in the statement.
"First, the Commission can prosecute cartels effectively even without prompts from immunity applicants, and second, obstructing a Commission antitrust investigation leads to severe penalties," she said.
The Commission started an investigation with raids on EU subsidiaries of Sony, Fuji and Maxell in May 2002.
The raids found "abundant evidence of cartel activities" although a Sony employee refused to answer questions by EU officials, in breach of Sony's obligations, and another employee shredded documents during the raid, the Commission said.
Sony acknowledged its involvement only after receiving a formal charge sheet from the Commission, it said.
The cartel covered the two most popular professional videotape formats at the time -- Betacam SP and Digital Betacam which in 2001 had total annual sales of 115 million euros in the EU and other European countries.
Television stations and independent TV producers are the main customers for professional videotapes.
Sony, Fuji and Maxell, controlling more than 85 percent of the professional videotape market, "organized three successful rounds of price increases and endeavored to stabilize prices whenever an increase was not possible," the Commission said.
They also regularly monitored the implementation of price agreements and the evidence had details of 11 meetings at which the three companies organized their cartel, it said.
The fines were the first applied under new EU guidelines, which will generally increase such penalties for companies which fix prices or do deals to divide up markets.
(Writing by William Schomberg; editing by Dale Hudson)
Sony has replied with a press release:
http://www.sony.net/SonyInfo/News/Press/200711/07-131E/index.html
EU Fines Sony for Professional Videotape Activities in Europe
Today, Sony Corporation, Sony France SA and Sony Europe Holding BV were informed by the European Commission that it had taken a Decision fining those companies 47.19 million Euros for participating in a cartel from 1999 to 2002 in the professional video tape market in Europe. We have received a brief announcement, but do not yet have the full text of the Decision which we expect to receive in the coming days.
We are very disappointed by the conduct described in the announcement, which involved a small number of employees located in Europe. While the details still need to be confirmed in the full text of the Decision, Sony wants to make clear that it does not approve of or condone conduct of the kind described in the announcement. We are sorry that it happened and express our sincere regret.
Sony is committed to complying fully with all applicable competition rules, including the EU antitrust rules, and it did not contest the principal matters described in the Commission's announcement after they had been formally communicated to Sony. Sony does not, however, agree with the allegation that it obstructed the Commission's investigation. The incidents in question were inappropriate and regrettable, but did not amount to obstruction and had no material impact on the Commission's investigation.
Since the events in the Decision took place some years ago, Sony has reinforced its antitrust compliance policies and training, and has repeatedly made clear to its employees, as it does again today, that such conduct violates our basic principles of integrity and our code of conduct, is unacceptable, and will not be tolerated.
My Mario Kart Wii friend code: 2707-1866-0957
