Final report of the Hearing Officer [1]

COMP/39.309 — Liquid Crystal Display (LCD)

2011/C 295/04

(1) The draft decision presented to the Commission pursuant to Articles 7 and 23(2) of Regulation (EC) No 1/2003 concerns a cartel between producers of Liquid Crystal Display (LCD) panels.

(2) In a Statement of Objections (SO) dated 27 May 2009, the Commission came to the preliminary conclusion that certain undertakings participated in a single and continuous infringement of Article 101(1) TFEU and Article 53(1) EEA in the sector of liquid crystal display panels for TV, notebook and monitor applications between 5 October 2001 and 25 May 2006 for all undertakings, except for one which was alleged to have participated between 5 October 2001 and 6 January 2006.

(3) The draft decision comes to the conclusion that the following undertakings infringed Article 101(1) TFEU and Article 53(1) of the EEA Agreement by participating in a single and continuous agreement and concerted practice in the sector of liquid crystal display panels for TV, notebook and monitor applications:

(i) Samsung Electronics Co Ltd and Samsung Electronics Taiwan Co Ltd (Samsung), from 5 October 2001 until 1 February 2006;

(ii) LG Display Co., Ltd. and LG Display Taiwan Co., Ltd. (LGD), from 5 October 2001 until 1 February 2006;

(iii) AU Optronics Corporation (AUO), from 5 October 2001 until 1 February 2006;

(iv) Chimei InnoLux Corporation (CMI), from 5 October 2001 until 1 February 2006;

(v) Chunghwa Picture Tubes, Ltd. (CPT), from 5 October 2001 until 1 February 2006; and

(vi) HannStar Display Corporation (HannStar), from 5 October 2001 until 6 January 2006.

(4) Each of these undertakings (collectively referred to as "the parties" below) received the Statement of Objections and was given the possibility to make known its views on the objections contained therein, according to Article 27 of Regulation (EC) No 1/2003.

(5) The Hearing Officer originally responsible for this case was Ms Karen WILLIAMS. Following my appointment as Hearing Officer as of 16 September 2010, I assumed responsibility for the case.

I. WRITTEN AND ORAL PROCEDURES

A. Access to file

(6) Following receipt of the SO issued on 27 May 2009, the parties were granted access to the file via a CD-ROM which they received on 4 June 2009. The parties also received access to oral and written leniency statements at the Commission's premises.

(7) Issues of access to the file were raised in particular by LGD in its response to the SO and at the oral hearing. LGD claimed that some translations were missing and that the organisation of the file, in particular the location of the non-confidential versions, made it impossible for it to assess what added value its submissions brought to the Commission's investigation. LGD was given further access to the file, following which it lodged an additional submission on 1 February 2010 requesting partial immunity under paragraph 26 of the Leniency Notice. While LGD reserved its rights to make further comments in its 1 February 2010 submission, it did not do so.

(8) On the basis of the above, I consider that LGD was able to fully exercise its right to be heard on the issue of whether it is entitled to partial immunity, and that the difficulties of access to the file — as regrettable as they may have been — have not led to any impediment of its right to be heard.

B. Time period to respond to the Statement of Objections

(9) The addressees of the Statement of Objections were originally granted a deadline until 10 July 2009 to reply to it. All parties requested extensions on grounds which were found justified by the then Hearing Officer. An extension was granted to CPT until 23 July 2009; to HannStar and Samsung until 24 July 2009; to CMI, AUO, and LGD until 28 July 2009. In connection with the above mentioned access to file issue LGD requested a further extension, which was granted until 11 August 2009. All parties replied in due time.

C. Oral hearing

(10) An oral hearing was held on 22 and 23 September 2009 and attended by representatives of all parties.

(11) During the oral hearing, the Commission posed a few questions to some of the parties and requested written answers. Access to the non-confidential versions of these answers was provided by letter of 6 April 2010.

D. Letter to the parties concerning […] documents

(12) On 6 April 2010, the Commission addressed a letter to the parties (the "Letter"), indicating that it may wish to include in the decision certain documents submitted by […] in its reply to the Statement of Objections on 11 August. The documents were attached to the Letter, which stated that the "new information corroborates and supports the objections already set out in the SO".

(13) AUO claimed in its response to the Letter that by not providing the documents before the oral hearing, the Commission deprived AUO of the opportunity to be heard. In its comments on certain of the […] documents, AUO also requested that the Commission provide further information on how the documents corroborate and support the objections already set out in the Statement of Objections. CMI noted in its response to the Letter that without any accompanying explanation as to what the documents are meant to show, it was difficult to see the use the Commission would make of them.

(14) Despite AUO and CMI's claims, I consider that the right for the parties to be heard on the new […] documents was respected by the Commission. First, I do not consider that the timing of the communication of the […] documents by the Commission was inappropriate. The Commission cannot be required to determine, already prior to the oral hearing, which parts of the replies to the Statement of Objections it may wish to use in a final decision. Second, the parties were given the opportunity to comment in writing on the new […] documents. The right to be heard orally only pertains to objections on which the Commission relies, and the Letter did not add any objections to those which were already made in the Statement of Objections. The Commission was therefore under no obligation to hear the parties orally on these documents specifically. Third, while the Letter could have stated more specifically to which objections the documents related, I consider that the context in which the documents would potentially be used by the Commission was sufficiently clear in this case for the parties to usefully comment on the documents, and therefore exercise in full their right to be heard.

II. THE DRAFT PROHIBITION DECISION

A. The draft decision only deals with objections on which the parties have been heard

(15) After reviewing the draft decision, I came to the conclusion that it deals only with objections in respect of which the parties have been afforded the opportunity of making known their views [2].

(16) Below, I will nevertheless review certain comments made in the course of the proceedings by the parties in relation to the right to be heard, in particular as regards jurisdiction and the fine calculation.

(a) The Commission's jurisdiction

(17) In their replies to the Statement of Objections, several parties [3] criticised the Commission for not having properly established that it has jurisdiction in this case. It was in particular pointed out that the Statement of Objections only contains a very limited analysis of this issue, which set out that the Commission had jurisdiction solely on the basis that the anti-competitive conduct in question affected trade within the Community and the EEA. One party argued that its right to be heard would be violated if the decision were to be adopted on the basis of the reasoning set out in the Statement of Objections.

(18) The draft decision addresses this criticism and includes a more elaborate analysis setting forth the reasons on the basis of which jurisdiction is established in this case, namely that the cartel was global in scope, and targeted amongst others direct sales to EEA customers.

(19) While it is true that the legal assessment of the Commission's jurisdiction in the Statement of Objections was rather limited, I nevertheless consider that the parties' right to be heard has been sufficiently respected. The Statement of Objections included an unreserved statement that the Commission considered to have jurisdiction in this case. The parties responded to this statement extensively in writing and at the hearing. The basic facts relied upon in the draft decision to support the legal conclusion in the decision that the Commission has jurisdiction were already presented in the Statement of Objections. Parties were therefore able to assert their point of view on these facts before the decision was adopted. To conclude, while it would have been preferable for the Statement of Objections to have included a more comprehensive analysis of this jurisdictional issue, I consider that such a shortcoming has not led to a violation of the right to be heard in this case.

(b) Fine calculation

(20) At paragraph 352, the Statement of Objections noted that "the Commission intends to take into consideration and to include in its assessment the fact that the product concerned by the present proceedings is incorporated into other final products". This paragraph gave rise to comments by several parties in their reply to the Statement of Objections and at the oral hearing. In particular, it was argued by some parties that paragraph 352 was very unclear, so that they could not properly exercise their right to be heard.

(21) First, it should be noted that, as regards fine calculation, the Commission only needs to set out, in the Statement of Objections, the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed "intentionally or negligently" [4]. Therefore, even if one accepts the claim that paragraph 352 did not clearly indicate the methodology which the Commission intended to follow to calculate a possible fine, the Commission nevertheless acted within the boundaries of the case law.

(22) In any event, the parties' concerns in this case were fully addressed by the Commission subsequently to the oral hearing. On 4 March 2010, the Commission addressed a letter pursuant to Article 18(2) of Regulation (EC) No 1/2003 requesting the parties to provide turnover information for the purpose of the calculation of a possible fine. Parties were requested to provide, amongst others, their direct and indirect EEA sales [5]. Following the parties' reply to the request, a further letter was addressed to them on 6 April 2010, in which it was explicitly stated that "the Commission intends to use (the data requested in the 4 March request for information) as the basis of the "value of sales" calculation and thus, pursuant to the 2006 Fines Guidelines, as the basis for the fine".

(23) Both the request for information of 4 March 2010 and the Commission letter of 6 April 2010 made it clear that the Commission intended to take into account, amongst others, certain indirect EEA sales (Direct EEA Sales through Transformed Products) in the calculation of a possible fine. It follows that the parties were given the opportunity to make their views known on this issue — and indeed made use of such opportunity, and therefore that their right to be heard was fully respected. As mentioned above, by so doing, the Commission went beyond the requirements of the case law.

B. Objections which have been dropped compared to the Statement of Objections

(24) After having heard the parties in writing and at the oral hearing, the duration of the infringement was cut down […].

(25) Further, several addressees of the Statement of Objections, which the Commission indicated it intended to hold jointly and severally liable with certain perpetrators of the infringement, are not addressees of the draft decision.

III. CONCLUSION

(26) In the light of the above, I consider that the right to be heard has been respected.

Brussels, 30 November 2010.

Wouter Wils

[1] Pursuant to Articles 15 and 16 of Commission Decision (2001/462/EC, ECSC) of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21 (the "Mandate").

[2] Article 15 of the Mandate.

[3] AUO, LGD, CMI, and HannStar.

[4] See, for example, Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P, Dansk Rørindustri and Others v Commission, [2005] ECR I-5425, paragraph 428.

[5] Both were defined in the letter of 4 March 2010. In the draft decision, the indirect EEA sales included for the purpose of the calculation of the fine are referred to as "Direct EEA Sales through Transformed Products".

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