Philips 2014 Annual Report Download - page 160

Group nancial statements 12.9
160 Annual Report 2014
Since the ultimate disposition of asserted claims and
proceedings and investigations cannot be predicted
with certainty, an adverse outcome could have a
material adverse eect on the Company’s consolidated
nancial position, results of operations and cash ows.
Provided below are disclosures of the more signicant
cases:
Cathode-Ray Tubes (CRT)
On November 21, 2007, the Company announced that
competition law authorities in several jurisdictions had
commenced investigations into possible
anticompetitive activities in the Cathode-Ray Tubes, or
CRT industry. On December 5, 2012, the European
Commission issued a decision imposing nes on
(former) CRT manufacturers including the Company.
The European Commission imposed a ne of EUR 313
million on the Company and a ne of EUR 392 million
jointly and severally on the Company and LG
Electronics, Inc. In total a payable of EUR 509 million
was recognized in 2012 and the ne was paid in the rst
quarter of 2013. The Company appealed the decision of
the European Commission and in November 2014 the
Company presented its defense at a Hearing with the
General Court.
United States
Subsequent to the public announcement of these
investigations in 2007, certain Philips Group companies
were named as defendants in class action antitrust
complaints by direct and indirect purchasers of CRTs
led in various federal district courts in the United
States. These actions allege anticompetitive conduct by
manufacturers of CRTs and seek treble damages on a
joint and several liability basis under federal antitrust
law, as well as various state antitrust and unfair
competition laws. These actions have been
consolidated for pretrial proceedings in the United
States District Court for the Northern District of
California. In addition, sixteen individual plaintis,
principally large retailers of CRT products who opted-
out of the direct purchaser class, led separate
complaints against the Company and other defendants
based on the same substantive allegations as the
putative class plainti complaints. These cases also are
consolidated for pre-trial purposes with the putative
class actions in the Northern District of California.
In 2012 a settlement agreement was approved between
the Company and counsel for direct purchaser plaintis
fully resolving all claims of the direct purchaser class.
Also, the Company recently reached a settlement with
the indirect purchaser class, subject to court approval,
that would fully resolve all claims of the indirect
purchaser class and release all claims of the indirect
purchaser class. The Company reached in the past year
settlements with a number of the individual plaintis
resolving all claims by those retailers on a global basis.
The settlements reached to date represent the majority
of CRT sales attributed to the Company by the
individual plaintis. Several of the remaining individual
plainti cases are scheduled for trial in 2015, with the
remainder expected to be transferred back to their
original venues for further proceedings. Trial dates in
these other cases have not yet been set.
In addition, the state attorneys general of California,
Florida, Illinois, Oregon and Washington led actions
against Philips and other defendants seeking to recover
damages on behalf of the states and, acting as parens
patriae, their consumers. In 2012 the Florida complaint
was withdrawn. In 2013 a settlement agreement was
reached with the state attorney general of California
that has been approved subject to review by the
California Court of Appeal. The actions brought by the
state attorneys general of Illinois, Oregon and
Washington are pending in the respective state courts
of the plaintis. The Oregon Attorney General action
has been set for trial in July 2016. Trial dates for the
Washington and Illinois actions have not been set and
there is no timetable for resolution of these cases.
Canada
In 2007, certain Philips Group companies were also
been named as defendants, in proposed class
proceedings in Ontario, Quebec and British Columbia,
Canada, along with numerous other participants in the
industry. After years of inactivity, in 2014, plaintis in the
Ontario action initiated the class certication
proceedings with class certication hearings scheduled
for late April 2015.
Other civil claims related to CRT
In 2014, the Company was named as a defendant in a
consumer class action lawsuit led in Israel in which
damages are claimed against several defendants based
on alleged anticompetitive activities in the CRT
industry. In addition, an electronics manufacturer led
a claim against the Company and several co-
defendants with a court in the Netherlands, also
seeking compensation for the alleged damage
sustained as a result from the alleged anticompetitive
activities in the CRT industry. The Company has
received indications that more civil claims may be led
in other jurisdictions in due course.
Except for what has been provided or accrued for as
disclosed in note 19, Provisions and note 21, Accrued
liabilities, the Company has concluded that due to the
considerable uncertainty associated with certain of
these matters, on the basis of current knowledge,
potential losses cannot be reliably estimated with
respect to these matters. These investigations and
litigation could have a materially adverse eect on the
Company’s consolidated nancial position, results of
operations and cash ows.