“International Cartel”

By Susan Ning, Kate Peng, Sarah Eder and Gao Sibo

 Introduction 

A major concern for undertakings which are involved in international cartel cases is the possibility of receiving overlapping punishments for their cartel conduct by competition authorities in different jurisdictions.

Various jurisdictions, including China, recognize the concept of double jeopardy and have introduced provisions which attempt to prevent over-punishment in the context of national proceedings.  Although there is no international standard to prevent double jeopardy in the context of antitrust enforcement of the same cartel by different jurisdictions, a number of competition authorities have taken the principle into account when imposing fines in international cartel cases, for example by excluding commerce or turnover attributable to certain sales or applying a reduction to the fine to take account of the fact that another jurisdiction has already imposed fines in respect of certain sales.     

We recognize that double jeopardy is an important consideration for clients which are implicated in international cartels. The Chinese antitrust agencies have not yet expressed how they intend to address the issue.  However, as they become more experienced in dealing with such cases, we hope that they will also become more aware of the issue and will clarify their approach to the issue of double jeopardy. 
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By Susan Ning and Kate Peng
 
On Jan 4th, the National Development and Reform Commission (“NDRC“) published that they had imposed fines in a total amount of RMB 353 million (approximately USD 56 million) on 6 LCD panel manufacturers, including Samsung and LG of Korea and ChiMei, AU Optronics, Chunghwa Picture Tubes and HannStar from Taiwan region.  This is China’s first antitrust enforcement action against international cartels.  It also imposes the highest penalties in China’s antitrust enforcement history.

According to the press releases of NDRC on its official website 1, during the period from 2001 to 2006, the 6 LCD manufacturers, which accounted for about 80% of the global LCD panel market, convened 53 meetings in Taiwan and Korea to exchange market information and negotiate the price of LCD panels.  NDRC received complaints on the cartel from major Chinese TV makers in December 2006.  The TV makers also reported non-price related misconducts of the panel manufacturers, including providing an 18-month warranty only and failing to provide high-end products in a timely manner.
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