EU to Fine Samsung, Korean Air for Collusion

The European Union will soon take legal action against the cartel activities of major Korean companies, including Samsung Electronics and Korean Air, sources said yesterday.

Industry watchers and government officials said Samsung will soon face a fine after pleading guilty or reaching a settlement with the European Commission after the company admitted to price-fixing of DRAM prices.

“The size of the fine will be similar to the amount the U.S. government imposed on Samsung in 2005 (300 million U.S. dollars),” an industry insider said. “The amount will be decided and announced in a month or two.”

The European Commission will also soon rule on Korean Air’s unfair practices. The nation`s largest carrier was also fined 300 million dollars for colluding on cargo charges and airfares in 2007 by the U.S. Justice Department.

The airline received a report containing evidence of collusion from the European Commission in Dec. 2007 and filed an appeal at a hearing in July last year in Brussels, Belgium.

“Generally, the final decision on the fine is made months after the hearing,” a senior Korean official in charge of international trade disputes said. “To my understanding, the European authority’s action is imminent whatever form it may be.”

The commission is also investigating alleged price-fixing by Korean manufacturers of LCD panels and cathode-ray tubes (CRTs).

The move toward levying a fine is based on the extraterritorial application of the EU’s own competition law. Major economies, such as the United States, the EU and Japan, are using a similar measure as a new way to protect their domestic industries.

With the launch of the Obama administration, the application of the competition law is expected to grow more intense in America. China also adopted in August last year an anti-trust law with a clause on extraterritorial application of anti-trust law.

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