Singapore’s Competition Commission (CCS) has fined four aluminum electrolytic capacitor (AEC) maufacturers a record S$19,552,464 ($14,730,826) for price-fixing, and exchanging information on confidential sales, distribution and pricing.
Another manufacturer was given full immunity for providing information.
The five electronics manufacturers – Elna Electronics, Nichicon (Singapore), Panasonic Industrial Devices Singapore (together with Panasonic Industrial Devices Malaysia), Rubycon Singapore and Singapore Chemi-con (SCC) – were close competitors who, according to CCS, held meetings with “unfailing regularity” in Singapore.
According to CCS, the manufacturers used these meetings to exchange confidential and commercially sensitive business information such as customer quotations, sales volumes, production capacities, business plans and pricing strategies.
They also discussed and agreed on sales prices and price increases, and agreed to collectively reject customers’ requests for reduction in prices of AECs.
AECs are electrical components used in electrical devices such as computers and a variety of domestic appliances.
Investigations into the cartel began after CCS received an application for immunity under CCS’s leniency programme from Panasonic.
The authority found that cartel activity started as far back as 1997, and the meetings took place almost on a monthly basis until 2013.
By fixing prices, the five companies managed to shelter each other’s profitability and market shares from the rest of the competition.
“This means that an individual AEC supplier may not have been able to sustain a price increase without losing market share to its competitors as its customers could switch to another AEC supplier,” CCS said in a statement.
If they had not taken part in cartel activity, the manufacturers would have had to draw customers with better prices or quality of products.
“The harm to competition was for a protracted period of time as this was a long-running cartel made up of the major suppliers of AECs in ASEAN, including Singapore,” CCS added.
CCS CEO Toh Han Li said: “Cartels among suppliers cause serious harm to competition in the market, leaving businesses and end-consumers in a poorer bargaining position and facing less competitive prices.”
Of the five manufacturers, SCC was given the heaviest fine of S$6,993,805, followed by Nichicon, which was fined S$6,987,262.
ELNA was fined S$853,227 and Rubycon was fined S$853,227, while Panasonic received total immunity from financial penalties.
ELNA, Rubycon and SCC had their penalties reduced under a leniency programme for companies that come forward with information on their own cartel activities.