Videotape producers fined for price fixing

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BRUSSELS -- European television stations and TV producers could see their expenses slashed after Sony and two other Japanese producers of videotape were hits with fines totaling nearly €75 million ($109.8 million) for price fixing.

The European Commission said the Sony, Fujifilm and Hitachi Maxell -- who jointly account for more than 85% of the videotape market -- managed to raise or otherwise control prices through a series of regular meetings and other illicit contacts between 1999 and 2002.

"This decision sends two warnings to companies engaging in cartel activities," EU Competition Commissioner Neelie Kroes said. "First, the commission can prosecute cartels effectively, even without prompts from immunity applicants, and second, obstructing a commission antitrust investigation leads to severe penalties."

The cartel covered the two most popular professional videotape formats at the time, Betacam SP and Digital Betacam. The commission said that, at the height of the cartel's activities, 2001, the EU videotape market had sales of about €115 million, but this would have been grossly inflated by the price fixing.

The commission fined Sony €47.2 million ($69.2 million), Fujifilm €13.2 million ($19.3 million) and Hitachi Maxell €14.4 million ($21.1 million).

It raised the fine against Sony, the world's second-largest maker of consumer electronics, by 30% because of deliberate obstruction -- one staffer refused to answer questions during a 2002 raid and another shredded documents. It was the largest percentage increase for impeding a cartel probe. "Obstructing the commission's antitrust investigation leads to severe penalties," Kroes said.

By contrast, Fuji's and Maxell's fines were cut by 40% and 20% respectively because they co-operated with investigators.

The case is the first under new guidelines that allow the commission to raise fines based on the size of the market and the length of the violation. The EU has levied a record €2.6 billion ($3.9 billion) in penalties in cartel cases so far this year, compared with €1.9 billion ($2.7 billion) in 2006.
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