The 10 Largest Antitrust Fines In History

In recent news chip maker Intel is in an ongoing battle to fight a staggering $1.2 billion antitrust fine levied against them for abusing their dominant position in the CPU market, and squeezing out their only rival, much smaller AMD. What most people don’t know, however, is that this is but the latest chapter in a long-running battle between the technology giant and the EU, which began when the suit was first brought, back in 2002.

There’s no doubt that the antitrust fine is huge. Its sheer size staggers the imagination, but depending on how you count, it’s actually not the largest such fine in history. Below, we’ll list nine others, and tell you what was involved in each case.

Microsoft WMP

Microsoft has long been a target of antitrust laws, both in the United States and the EU, but while US courts have steered clear of levying big fines against the software giant, the same cannot be said of the EU. All told, Europe has levied a total of $2.1 billion in antitrust fines in three separate suits for various abuses of its market position. The three primary complaints levied against the company were:

• A refusal to provide information to competitors that would allow them to make their hardware and software Microsoft compatible
• The fact that Windows Media Player, included as part of the bundle with the Windows Operating System, damaged for-profit streaming services
• And Microsoft’s heavy handedness in steering Windows users toward their Internet Explorer web browser, rather than allowing users a free choice of which browser to use.

Google Android Case

This case is still ongoing, and Google, like Intel, is fighting the EU’s ruling, but according to the EU, Google has abused the dominant position of its Android OS, including a requirement that all Smartphone manufacturers using the OS must install 11 core Google apps onto their products prior to sale. These apps need to be one swipe away from the home screen and cannot be deleted. The argument is that this behavior denies consumers a choice of applications in what’s supposed to be a free market.

The exact amount of the fine is still being hammered out, but could be as high as 10% of Google’s total, worldwide revenue, which would make it nearly $7.5 billion!

LG, Samsung, Panasonic, And Others

A total of seven global corporations were listed by the EU as being members of a cartel, found to have colluded by sharing markets, agreeing not to compete for certain customers, and fixing prices. Collectively, these seven companies were fined a total of $1.6 billion dollars. While technically larger than the Intel fine, this one is split seven ways.

AU Optronics Price Fixing

AU Optronics, a Taiwanese company based in Houston, TX that manufactures LCD screens, was fined a hefty $500 million in 2012 for price fixing. This is actually half the amount that was originally demanded, and was negotiated down from the $1 billion mark because the judge in the case reasoned that the company had already paid millions to settle other lawsuits relating to the case, and still had others outstanding.

Hoffmann-La Roche, Ltd.

In 1999, the Swiss pharmaceutical giant was found guilty of antitrust violations in the US, and fined $500 million. According to the Department of Justice brief on the matter, the company was found performing the following illegal activities:

• agreeing to fix and raise prices on Vitamins A, B2, B5, C, E, Beta Carotene, and vitamin premixes;
• agreeing to allocate the volume of sales and market shares of such vitamins;
• agreeing to divide contracts to supply vitamin premixes to customers in the U.S. by rigging the bids for those contracts; and,
• participating in meetings and conversations to monitor and enforce adherence to the agreed-upon prices and market shares.

Yazaki Corporation

In 2012, Japanese firm Yazaki, manufacturer of electronic automobile components was fined $548 million for price-rigging and bid-fixing schemes. In a relatively rare move, four of the company’s top executives also agreed to serve prison time in the US for their actions.

Bridgestone Corporation

In 2014, the Bridgestone Corporation was found guilty of price fixing and bid rigging, in an attempt to maintain an unnaturally high price for its anti-vibration rubber parts sold to Toyota, Nissan, Fuji, Isuzu, and their affiliate companies. For this, the company was fined $425 million.

LG Display America

In 2009, LG, which is a well known South Korean company, and one of the world’s largest manufacturers of LCD displays, was fined $400 million for price fixing.

Société Air France , et. Al.

In 2008, a total of five major international airlines agreed to pay $505 million in fines for antitrust violations. The five companies (Société Air France (Air France), Cathay Pacific Airways Limited (Cathay), Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), Martinair Holland N.V. (Martinair), and SAS Cargo Group A/S (SAS)) were found guilty of conspiring to fix international shipping rates, harming US businesses attempting to import goods to Europe.

Final Thoughts

Antitrust violations are nothing new. When you boil it down to barest essentials, corporations are cost-externalizing machines. They tend to privatize profits and socialize costs as much as possible. When they grow large enough, the temptation is all but overwhelming that they will attempt to alter the competitive landscape to make it impossible for start-ups to engage them in fair, head to head competition, thus the need for strong antitrust laws.

Of course, sometimes the judge gets it wrong. Sometimes, a weak competitor who can’t win in the marketplace uses the courts to lash out in the hopes of using an unjust court decision to enable them to compete. That’s why it’s of equal importance to have a good appeals process, and we definitely have that.

The reality though, is that since the heyday of trust busting, corporations have been allowed to grow so large and powerful that the biggest international companies have balance sheets that rival, and in many cases, exceed the GDP of whole countries. These corporations are so massive that they can be all but impossible to control, and this is a strong argument for strengthening current antitrust legislation on the books.

Sources

http://www.cbronline.com/news/verticals/public-sector/8-of-the-biggest-european-antitrust-fines-imposed-on-tech-firms-for-business-practices-4870212
http://www.bloomberg.com/news/articles/2016-06-21/intel-fights-record-1-2-billion-antitrust-fine-at-top-eu-court
http://www.nytimes.com/2012/09/21/business/au-optronics-fined-500-million-in-us-price-fixing-case.html?_r=0
https://www.justice.gov/archive/atr/public/press_releases/1999/2626.htm
https://www.justice.gov/opa/pr/yazaki-corp-denso-corp-and-four-yazaki-executives-agree-plead-guilty-automobile-parts-price
https://www.justice.gov/opa/pr/bridgestone-corp-agrees-plead-guilty-price-fixing-automobile-parts-installed-us-cars
http://www.zimmreed.com/case/lcd-panel-price-fixing/
https://www.justice.gov/archive/opa/pr/2008/June/08-at-570.html