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Cathode ray tube appeals: the ECJ rejects LG and Philips’ appeals

On September 15, 2017, the ECJ rejected LG Electronics’ (“LG”) and Philips Electronics’ (“Philips”) appeals against the General Court’s judgment of 2015 that confirmed the Commission’s infringement decision in the cathode ray tube (“CRT”) cartel.

The judgment today ends the companies’ fight against the 2012 fines for their involvement in the cartel by the CRT manufacturing joint venture LG Philips Displays (“LPD”), jointly owned by  LG and Philips. More precisely, the Commission ordered Philips to pay €313 million and LG €296 million, and held them jointly and severally liable for a €392 million fine it imposed on the joint venture LPD.

Before the ECJstock-vector-schematic-diagram-of-an-x-ray-tube-that-could-be-used-for-radiation-therapy-medical-radiography-152244374, the companies argued inter alia that the General Court had wrongly upheld the European Commission’s procedural handling of the case. LG also criticised the General Court’s finding that it had an obligation to maintain books and records to allow it to retrieve information about the parent’s activities and following LPD’s insolvency, its liquidator had no obligation to give LG access to its records. Philips argued it could not access documents to defend itself, and added that holding it liable through LPD’s conduct meant its liability exceeded that of its subsidiary.

The ECJ today upholds the General Court’s finding that the European Commission’s infringement decision did not commit procedural error and did not harm the companies by sending statements of objections only to them, and not to the LPD joint venture after its parent company became insolvent in 2006. The ECJ stated that when the Commission does not intend to show that a particular company committed an infringement, “the rights of defence do not require a statement of objections to be sent to that company“. The ECJ also dismisses LG’s and Philips’ claims that the General Court had wrongly backed the Commission’s finding that LPD and its parents were part of the same economic unit. According to the Court, the companies did count as vertically integrated for these purposes, and as such the Commission could include the sales in its calculations. It also rejected LG’s claim that direct EEA sales involving transformed products should not have been considered. In fact, the Commission took them into account “only up to the proportion of their value that was capable of corresponding to the value of the cartelised CRTs installed in the television sets and computer monitors“. The ECJ rejected the companies’ allegations that the Commission had failed to treat them equally by handling Samsung’s direct EEA sales of transformed products differently than it had handled theirs. The EU enforcer had not included those sales by a Samsung SDI subsidiary when it set the basic level of the parent’s fine. Finally, the Court held that the commission had applied the same methodology to all the defendants by splitting sales into various categories. The category of direct EEA sales of transformed products was applied only to vertically integrated units and the Commission had correctly concluded that the Samsung companies did not constitute such a group. As a result, the Commission did not treat LG and Philips unequally.

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