EU Fines Sony, Fuji, Maxell on Videotape

The European Commission has levied almost $110 million in fines against Sony, Fuji, and Maxell for fixing the prices of videotape between 1999 and 2002.

The European Commission has handed down a €74,790,000 fine (almost $110 million in U.S. dollars) in fines against Japanese manufacturers Sony, Fuji, and Maxell for fixing the prices on professional videotapes sold in Europe between 1999 and 2002, in violation of EU competition laws. Furthermore, Sony’s portion of the fine was cranked up by an additional 30 percent for hindering the EC’s investigation.

The EC carried out surprise inspections on European subsidiaries of Sony, Fuji, and Maxell in May 2002 and uncovered "abundant evidence" of cartel activities. During the inspections, a Sony employee refused to answer questions and another shredded documents during the inspection. The investigation focused on professional Betacam SP and Digital Betacom video tape, used widely in professional television and advertising. European sales of the tape formats totaled €115 million in 2001.

"This decision sends two warnings to companies engaging in cartel activities: first, the Commission can prosecute cartels effectively even without prompts from immunity applicants, and second, obstructing a Commission’s antitrust investigation leads to severe penalties," said the EC’s Competition Commissioner Neelie Kroes, in a statement.

The fines are the first to be levied under new EU guidelines that raise penalties against companies that engage in price fixing or back-room deals to divide markets.

Sony, Fuji, and Maxell are the dominant players in the professional videotape market, accounting for about 85 percent of all tape sold.