Today, Sharp Corporation received a cease and desist order and a surcharge payment order from Japan Fair Trade Commission (JFTC) as shown below. We take with gravity the fact that we received such orders, and will strengthen our effort of compliance with law and business ethics.
However, since JFTC’s conclusion leading to these orders includes some unprecedented interpretations and applications of the Antimonopoly Act, we are now considering our next steps including a hearing request.
Notes
| (1) |
Contents of the cease and desist order |
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With respect to a violation of Article 3 of the Antimonopoly Act stemming from Sharp’s sales of LCD modules to Nintendo Co., Ltd. from January 1, 2007 to March 31, 2007 and used in that company’s Nintendo DS Lite, Sharp Corporation was ordered to take the necessary measures to prevent a similar violation from occurring in the future. |
| (2) |
Contents of the surcharge and payment order |
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With respect to a violation of Article 3 of the Antimonopoly Act stemming from Sharp’s sales of LCD modules to Nintendo Co., Ltd. from October 28, 2005 to March 31, 2006 and used in that company’s Nintendo DS, Sharp Corporation was ordered to pay the following surcharge.
| Amount for surcharge: |
261.07 million yen |
| Payment due by: |
March 19, 2009 |
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| (3) |
Sharp’s View |
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Regarding JFTC’s orders, Sharp’s point of view is that we did not engage in any activities that could be categorized as a violation of Antimonopoly Act. Therefore, we are considering future responses including a hearing request. Sharp’s point of view is based on several facts including the following: |
| 1) |
LCD modules subject to each order are products in the market into which other LCD manufacturers can enter and compete. Under such circumstances, Sharp and Hitachi Displays, Ltd., only two manufacturers, could not have controlled the prices.
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| 2) |
In order to meet the prices demanded by Nintendo as close as possible, Sharp has provided new technologies, made continuous efforts to reduce costs and conducted price negotiations in good faith to reach an agreement with Nintendo for the delivery prices. |
Furthermore, we understand there is no precedent in Japan that a cartel in violation of Antimonopoly Act was found for a specific product which was sold to one private company for use of a single product model.
Therefore, since Sharp would like to insist its company’s view on this matter, we will determine next steps including whether to request a hearing.
| The above information is true and accurate at the time of publication. Manufacture, sale, price and specifications of products may be subject to change. |
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