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By | Stephen Errity 21st November 2007 09:49

EU fines videotape manufacturers for alleged cartel

Sony, Fuji and Maxell pay €74.8m

The European Commission has fined videotape manufacturers Sony, Fuji and Maxell a total of €74.8m for alleged cartel activity in the videotape market.

In a statement, the commission said the three companies, which have a combined share of 85 per cent of the professional videotape market, managed to "raise or otherwise control prices through a series of regular meetings and other illicit contacts" that took place between 1999 and 2002.

The alleged cartel covered the Betacam SP and Digital Betacam formats, which were the two most popular professional videotape formats at the time of the infringement, used mainly by TV stations and independent TV programme producers. The two formats had total combined annual sales of €115m in the European Economic Area (EEA) at the time.

The commission alleges that the trio organised three successful rounds of price increases and endeavoured to stabilise prices whenever an increase was not possible. Sony was fined €47.2m, Fuji €13.2m, and Maxell €14.4m.

The commission explained that it increased Sony's fine by 30 per cent for obstructing its investigation during on-site inspections at its premises. Sony employees allegedly shredded documents and refused to answer questions posed by commission investigators when they visited. On the other hand, under the commission's 2002 Leniency Notice, Fuji's and Maxell's fines were reduced by 40 per cent and 20 per cent respectively because they co-operated with the investigation. The fines were calculated using guidelines drawn up in 2006.

Commenting on the ruling, EU competition commissioner Neelie Kroes said: "This decision sends two warnings to companies engaging in cartel activities: first, the commission can prosecute cartels effectively... and second, obstructing a commission anti-trust investigation leads to severe penalties."

© 2007 ENN

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