Samsung, Philips and Infineon fined over chip price fixing by EU

The European Commission has handed chip manufacturing companies a 138 million fine after finding them guilty of running a decade-long cartel on smart card chips.

The investigation found that Infineon, Philips and Samsung colluded to maintain the price of chips for smart cards. Also implicated was Renesas, a former joint venture between Hitachi and Mitsubishi, however this organisation was granted immunity from prosecution after blowing the whistle on the deal.

The European Commissioner in charge of competition policy, Joaquin Almunia, said: "In this digital era smart card chips are used by almost everybody, whether in their mobile phones, bank cards or passports.

"It is crucial that the companies producing them focus their efforts on how to outperform their competitors by innovating and providing the best products at the most attractive prices. If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions," he said in a statement.

According to the Commisssion, the companies involved in the cartel "colluded through a network of bilateral contacts in order to determine their respective responses to customers' requests to lower prices".

They discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilisation and their future market conduct.

It said collusion of the type breaches Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA), which prohibit cartels and restrictive business practices.

Samsung had managed to get a 30 per cent reduction in its fine by cooperating with the investigation. Infineon was fined 82.7 million and Philips 20.1 million.

Infineon and Philips both rejected the charges and vowed to appeal the decision.