EU Fines Smart Card Chip Producers Over Cartel -- Update

By Tom Fairless 

BRUSSELS--European Union regulators issued fines totaling EUR138 million ($181 million) against Infineon Technologies AG, Royal Philips NV and Samsung Group on Wednesday for fixing the price of smart card chips.

The European Commission, the region's central antitrust authority, said the companies had "exchanged sensitive commercial information" on pricing, customers, contract negotiations and production between September 2003 and September 2005. Smart card chips are used in mobile phones, bank cards, passports and other applications.

The fines add to more than EUR1.4 billion in penalties that EU regulators have imposed for cartel violations in the first six months of the year.

"In this digital era, smart card chips are used by almost everybody," the EU's antitrust chief Joaquín Almunia said in a statement. "If...companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions."

Neubiberg, Germany-based Infineon, which will bear the lion's share of the fine, or EUR82.8 million, said it would appeal the decision.

"Infineon rejects the allegations as unfounded...[and] believes that its procedural rights were violated by the European Commission," the company said in a statement.

A spokesman for Philips, which was fined EUR20 million, said the company plans to appeal the decision.

Samsung received a 30% reduction to its fine for cooperating with the investigation and will pay EUR35 million. The company couldn't immediately be reached for comment.

A fourth company, Renesas Technology Corp. of Japan, escaped a fine because it revealed the existence of the cartel, the commission said.

In June, a record EUR1.06 billion fine imposed by EU regulators against U.S. chip maker Intel Corp. for abusing its dominant position in the microprocessor market was upheld by the EU's second highest court. Intel is appealing the decision at the EU's top court in Luxembourg.

Write to Tom Fairless at [e-mail]

Corrections & Amplifications

"In this digital era, smart card chips are used by almost everybody," the EU's antitrust chief Joaquín Almunia said in a statement. An earlier version of this article named him Joquin Almunia.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires