European Commission fines optical drive manufacturers for cartel formation

The European Commission has fined eight optical drive manufacturers a total of EUR 116 million for forming a cartel. Philips and Lite-On avoid their share of the fine, because they were the first to disclose the existence of the cartel.

The companies that were part of the cartel are Philips, Lite-On, the joint venture Philips & Lite-On Digital Solutions, Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage. During the period between June 2004 and November 2008, the companies made agreements with each other about the strategy to be followed when bidding for tenders, according to the European Commission.

They also shared sensitive information about tenders and about optical drives in laptops and desktops themselves. By communicating with each other, they tried to avoid aggressive competition and bidding wars in tenders from Dell and HP. However, this behavior is contrary to EU competition rules. According to the European Commission, the companies knowingly acted in violation of the rules, which would be apparent from the fact that they did not use the full names of their competitors in their correspondence, but abbreviations or generic names.

Philips, Lite-On and the joint venture Philips & Lite-On Digital Solutions were fined but not required to pay for their cooperation in the investigation and disclosure of the cartel’s existence. Toshiba Samsung Storage Technology receives the highest fine: more than 41 million euros. Hitachi-LG Data Storage has been fined more than €37 million and Sony has to pay €21 million. For Sony Optiarc and Quanta, the fine is 9.8 and 7.1 million euros respectively.