On 27 February 2014, the General Court ("GC") handed down two separate judgments concerning appeals brought by Innolux Corp ("Innolux") and LG Display Co. ("LGD") against a 2010 European Commission decision fining them for their participation in a cartel on the market of liquid crystal display ("LCD") panels. The GC largely upheld the Commission's decision, but nevertheless reduced the fines imposed on Innolux and LGD by € 12 million and € 5 million respectively.
On 8 December 2010, the Commission adopted a decision fining six manufacturers of LCD panels a total of over € 648 million for operating a price-fixing cartel. The largest fines, € 300 million and € 215 million, were imposed on Innolux and LGD respectively (see VBB on Competition Law, Volume 2010, No. 12, available at www.vbb.com). Appeals were subsequently brought before the GC.
Concerning the appeal made by Innolux, the GC confirmed the substance of the Commission's decision. In particular, the GC upheld the concept of "direct EEA sales through transformed products" as compatible with the 2006 Fining Guidelines when calculating the value of Innolux's sales of LCD panels to which the infringement related. As a result, the Commission calculated the value of sales based not only on Innolux's direct EEA sales of LCD panels, but also on its EEA sales of transformed products (e.g., IT monitors and TVs) incorporating LCD panels. The GC rejected claims that this concept breached the principles of equal treatment and non-discrimination between vertically and non-vertically integrated groups. The GC also dismissed the argument that such concept artificially shifted the place where those sales were actually made and thus exceeded the limits of the Commission's territorial jurisdiction. However, the GC, in the exercise of its unlimited jurisdiction, reduced the fine imposed on Innolux by € 12 million to a total amount of € 288 million. The GC found it appropriate to recalculate the fine on the basis of a lower sales value to correct an error made by Innolux when providing the Commission with the data necessary for calculating the value of relevant sales, which included sales relating to products other than LCD panels subject to the infringement.
As regards LGD, the GC also upheld the substance of the Commission's decision. Among many claims, the GC rejected the claim that the value of sales of LCD panels should exclude the sales made to undertakings related to the appellant (i.e., Phillips and LG Electronics, the parent companies of LGD) on the grounds that these companies did not constitute a single undertaking as defined by EU competition law and that the sales made by LGD to its related companies were found to have been influenced by the cartel. Nevertheless, the GC reduced the fine imposed on LGD by € 5 million to € 210 million in the exercise of its unlimited jurisdiction. The GC found that the Commission had mistakenly included January 2006 in the calculation of the average value of LGD's sales despite the fact that the latter was granted partial immunity on the basis of the 2006 Leniency Notice for having provided information relating to the cartel after December 2005. As a result, the GC excluded the sales made by LGD of LCD panels during the month of January 2006 and adjusted the fine accordingly.
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