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Friday, November 9, 2007

Matsushita and Samsung under investigation

Matsushita and Samsung under investigation

Competition authorities from across the world are investigating a group of Asian electronics makers including Japan’s Matsushita and South Korea’s Samsung on suspicion of price fixing in the shrinking market for cathode-ray tubes.

Matsushita, which sells under the Panasonic and National brands, confirmed on Friday that Japan’s Fair Trade Commission had raided the Osaka offices of its CRT subsidiary, MT Picture Display. Samsung confirmed that South Korean authorities were probing its CRT business.

The European Commission said in a statement that it was inspecting unnamed CRT makers. “The Commission has reason to believe that the companies concerned may have violated EC Treaty rules on cartels and restrictive business practices,” it said.

Other Asian CRT makers are also understood to be under investigation.

Demand for cathode-ray tubes, used in older-style television sets and computer monitors, is dropping with the rise of flat-screen technology.

Matsushita expects industry-wide sales to fall to 69m units globally by 2010 from 112m in 2006.

Samsung’s CRT business operates at a loss, and the company said last month it was considering closing the operation. Matsushita ended CRT production in Europe and the US in 2005 and closed an MT Picture Display plant in Thailand in September.

CRT sales contribute less than 1 per cent of group revenues for Matsushita, which like Samsung and other big electronics makers has switched its focus to LCD and plasma displays.

Matsushita combined its remaining CRT operations with those of Toshiba until earlier this year when its partner sold out of the venture.

An official close to the Japanese investigation said the price-fixing investigation was likely to take at least nine months. If Matsushita is found to have colluded with other manufacturers it could be fined an amount equal to 10 per cent of its CRT sales during the period of collusion, he said.

Matsushita shares ended down 4.3 per cent on Friday compared with a 1.2 per cent decline in Japan’s benchmark Nikkei average. Samsung shares rose 0.3 per cent.

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