‘A Big Decision for National Interests’
The legal agreement this time is a broad determination for both companies to take initiative of the global market. It is a firm will that they will stop exhaustive disputes and focus on strengthening product competitiveness. As both companies have said, it is ‘an action to wisely get through stringent national economy conditions.’
The legal battle between the two groups had been getting extreme to the point of being called a ‘mud fight.’ For this reason, finding out a meeting point seemed difficult unless the owner decided. There was a high possibility that it would make national damages, since both companies form a great deal of the national economy.
In the TV market, both companies run global first and second place. For washing machines, LG Electronics, and for refrigerators, Samsung Electronics lead the global market. On top of this, both companies have declared global no. 1 in the home appliances division this year. Numerous cooperative companies strive for technology development, expecting an increase of Samsung·LG Electronics’ global market shares.
However, the market structure is tough. There are many obstacles to overcome. The premium image needs to be even more enhanced and built-in market invasions need to speed up.
In addition to this, Chinese businesses constantly broaden their strength overseas. Based on technical skills built through fierce competition in the domestic market, they are expanding their fields overseas including the U.S.A., the barometer of the global market. In the position of our companies, not only do we have to face fierce competition between overseas firms such as Whirlpool Corporation and GE, but we also have to take action against the attack of Chinese companies. Recently, Japanese companies have also been trying to revive their past glories, with ‘low yen’ as their weapon.
The dispute has been put to an end in top secret by only the highest positions of both companies and the judicial affairs system. Executives of the operation division say that they did not know. This was from the judgment that there was that much need for compromise and further time wasting would be inappropriate.
The business world hopes that both companies will create synergies taking this opportunity. Nam, In-seok, vice-chairman of Korea Electronics Association, said, “This is a meaningful decision at the national level. I hope they will cooperate in targeting the world.”
Experts expect the same. Both companies are in urgent need of next generation income sources in both TV and home appliances. If the two companies cooperate, there are many fields to gather way, such as smart home, next generation TV, etc. These fields are the ones that we have been leading in the market. Considering the results made until now, Korea has enough competitiveness to take initiative of the next generation platform. If only the two companies cooperate and take initiative, added value appears in various ways. In contrast, our companies could have lost their chances to take initiative in the global age of limitless competition due to the exhaustive disputes between the two companies. Not only could have they lost their initiative, but also been weeded out of the market.
An official of the Federation of Korean Industries said, “There were many worries that the legal battle between the two companies would imprint negative corporate images overseas. I hope this compromise will function as a good precedent and be used to get rid of similar exhaustive disputes in the financial world.”
※LG Display(LGD) vs Samsung Display(SDC) Dispute Journal
◇ 2013
▲ April 9th = Seoul Metropolitan Police Agency International Criminal Investigative Service searchs and seizes three SDC workplaces, head office, etc. for OLED176 panel technology leakage through the LGD cooperative firm.
▲ November 11th = Seoul Metropolitan Police Agency sends prosecution views of seven SDC executives and employees, four LGD cooperative firm officials, and two corporate bodies to the prosecution.
◇ 2015
▲ February 6th = Suwon District Court declares probation for all SDC researchers on charge of SDC technology leakage.One LGD executive and one cooperative firm employee fined. LGD executives and employees, corporate bodies, etc. not quilty.
▲ February 13th = Suwon District Public Prosecutor`s Office Special Department prosecutes LG cooperative firm chairman and four SDC staff members for siphoning LGD OLED technology, without detention. A total of 11 SDC executives and employees including executive director, chairmen of other cooperative firms, etc. acquitted.
※On Washing Machine (Samsung Electronics·LG Electronics)
◇ 2014
▲ September 3rd = Cho, Sung-jin, chairman of LG Electronics, arouses suspicion of intentionally damaging a Samsung Electronics washing machine at a home appliances store in Berlin, Germany during IFA period.
▲ September 14th = Samsung Electronics requests Seoul Central District Prosecutor`s Office for investigation on LG Electronics chairman Cho, executives, etc. on charges of work disturbance, property damage, defamation, etc.
▲ December 21st = LG Electronics counterclaims on charges of evidence fabrication on Samsung Electronics executives and employees related to the ‘washing machine damage controversy’ and defamation.
▲ December 26th = Seoul Central District Prosecutor`s Office Detective Part 4 seizes and searches LG Electronics’ head office in Yeouido, Seoul, factories in Changwon, Gyeongnam, etc.
◇ 2015
▲ February 15th = Seoul Central District Prosecutor`s Office Detective Part 4 prosecutes three executives including LG chairman Cho, without detention.
▲ March 13th = Seoul Central District Court Criminal Court Part 29 holds preparation of first trial date.
Senior Reporter Kim, Joon-bae