EU fines Infineon, Philips and Samsung €138m for forming smart-card chip cartel

Wednesday 03 September 2014 12.42
The companies colluded over pricing, contracts and customers between 2003 and 2005, according to the European Commission
The companies colluded over pricing, contracts and customers between 2003 and 2005, according to the European Commission

The European Union has fined Infineon, Philips and Samsung €138m for forming a smartcard chip cartel in Europe in its latest competition case against technology firms.

The German, Dutch and South Korean firms "colluded through bilateral contacts that took place in the period between September 2003 and September 2005," the European Commission said in a statement.

Japan's Renesas was granted immunity for revealing the cartel's existence.

Infineon was fined €82.7m, Philips €20.1m, and Samsung €35.1m, with the latter having its penalty reduced by 30% for having cooperated with investigators.

The companies "in our view knew that their conduct was illegal," said Joaquin Almunia, the commission's vice president in charge of competition policy.

They "discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilisation and their future market conduct," the commission said.

Mr Almunia added that "in this digital era smart card chips are used by almost everybody, whether in their mobile phones, bank cards or passports."

Companies producing them should be focused on being competitive, he said, adding: "If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions."

The commission said Renesas and its joint venture parent companies Hitachi and Mitsbubishi avoided a fine of more than €51m because it was the first to reveal the cartel's existence to the commission.

It said that Philips "remains liable for what happened during the period of infringement" even though it has since divested its smart card chips business. 

The commission said anyone harmed by the cartel may seek damages before the courts of the European member states. 

The EU has previously fined US computer chip giant Intel €1.06bn for abusing its dominant market position. 

Earlier this year Google and the Commission agreed a deal over accusations the world's largest search engine was squeezing out competitors in Europe's search market, so avoiding legal action and potentially billions in fines.