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Statement by Vice-President Almunia on Smart Card Chips cartel

European Commission - STATEMENT/14/268   03/09/2014

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European Commission

Statement

Brussels, 3 September 2014

Statement by Vice-President Almunia on Smart Card Chips cartel

Today the European Commission has found and sanctioned a cartel set up by companies producing Smart Card Chips, a product used in the SIM cards of mobile phones, in payment cards or identity cards for example. We have imposed fines totalling 138 million euros.

The companies involved were Infineon, Philips, Samsung and Renesas, a joint venture of Hitachi and Mitsubishi. Instead of competing, these companies colluded in order to coordinate their market behaviour throughout Europe.

They held contacts to discuss prices, price trends as well as production capacity. They also disclosed to each other their future market conduct, in general or for negotiations with individual customers. The cartel was organised through a network of bilateral contacts that took place between September 2003 and September 2005. These contacts allowed them to prepare their respective responses to customers' requests to lower prices.

Such contacts were clearly anticompetitive since they reduced uncertainty concerning each other's behaviour on the market.

The cartelists must have known that their conduct was illegal. Some of them even took measures to conceal the collusion.

But the cartel was ultimately discovered and punished.

One company, Renesas, has received immunity from fines as it had revealed the existence of the cartel to the Commission. Samsung also received a reduction of 30% of its fine for cooperating with the investigation.

Our "leniency" programme has been again very effective as a way to uncover these secret arrangements. It is our best tool to detect and defeat cartels, and ultimately to protect European consumers and businesses from such harmful practices. Each suspected infringement is then investigated thoroughly by the Commission itself, with all guarantees of due process.

The fine amounts imposed today reflect the gravity of the infringement, the turnover generated by the cartelised products and the duration of participation of each company in the cartel.

After our investigation started, we also explored the possibility of settling this case with some of the companies involved. But in 2012 the Commission decided to put an end to the settlement talks since there was a clear lack of progress in these discussions.

The essence of a cartel settlement, as we experienced over the last four years, is to benefit from a quicker, more efficient procedure, and to reach a common understanding with the companies concerned on the existence and characteristics of a cartel. This allows the Commission to focus its efforts on other investigations, while the companies get a 10% reduction of their fine. If that is not possible, then the Commission will be obliged to revert to the normal procedure and to pursue the suspected infringement – as we did in this case.


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