Disc drive suppliers fined €116 million for optical collusion

Paul Snell is managing editor at Supply Management
22 October 2015

A group of eight suppliers of optical disc drives have been fined a total of €116 million by the European Commission for colluding on tenders.

The Commission said the firms had shared their intentions on bidding strategies, the results of tenders and other commercially sensitive information, and organised a network of contacts “to avoid aggressive competition” in tenders for laptop and desktop disc drives issued by manufacturers Dell and HP between June 2004 and November 2008. Optical disc drives read media such as CDs, DVDs and Blu-rays.

The eight firms that participated in the cartel were Philips, Lite-On, their joint venture Philips Lite-On Digital, Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage.

To avoid detection, individuals met face-to-face in car parks and cinemas where they could not easily be spotted.

Philips, Sony and Sony Optiarc only participated in the collusion in relation to tenders from Dell. Philips, Lite-On, and their joint venture had their fines reduced to nothing, as they revealed the existence of the cartel to regulators.

Margrethe Vestager, EU competition policy commissioner, said: “This decision demonstrates once again that cartelists cannot escape fines just by holding their meetings in cinemas and car parks outside Europe, while selling their products in Europe."

Companies affected by the cartel can now seek damages from the firms under EU law.

In August John Kirkpatrick, director of policy at the UK Competition & Markets Authority, warned buyers to be vigilant of the threat posed by bid-rigging.

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