Taiwan FTC fines four international ODD makers for cartel

Ocean Chen, Taipei; Adam Hwang, DIGITIMES [Friday 21 September 2012]

Taiwan's Fair Trade Commission (FTC) on September 20 meted out fines totaling NT$54 million (US$1.84 million) in an antitrust probe against four major optical disk drive (ODD) makers.

The makers were found to have viloated the fair trade law for their concerted action in open-bid competition for ODD procurement PC vendors Hewlett-Packard (HP) and Dell during September 2006-September 2009, according to the FTC.

The four companies and corresponding fines are: Toshiba-Samsung Storage Technology, NT$25 million; Hitachi-LG Data Storage NT$16 million; Philips & Lite-On Digital Solutions, NT$8 million; and Sony Optiarc, NT$5 million, the FTC indicated.

According tio the FTC, the four companies, before or during open-bid competition held by HP and Dell to procure ODDs, exchanged quotations and related information. They fixed the winning prices and the order of priority for suppliers in advance through e-mail, phone communication or meetings. As the four companies had a combined global ODD market share of over 75% based on surveys by Japan-based Techno Systems Research (TSR), and HP and Dell together occupied about 10% of the Taiwan PC market, such concerted action had affected ODD supply and demand in the Taiwan market and therefore violated Article 14 of Taiwan's Fair Trade Act, FTC explained.

As one of the four companies pleaded guilty on the cartel with US Department of Justice in November 2011, FTC was informed of it and began investigation in November 2011 as well, FTC indicated.

The Fair Trade Act was amended in November 2011 introducing a forgiveness article. If a company participating in a concerted action admits the guilt before FTC discovers or begins investigation, the company can be exempt from the fine, FTC indicated.

In this case, one of the four companies admitted the violation and provided FTC with related evidence which was key to FTC's decision on the pecuniary penalty and therefore will be exempt from paying the fine, FTC pointed out. But FTC did not reveal the name of the forgiven company due to confidentiality required by the law.