1999/55/EC: Commission Decision of 21 December 1998 terminating the anti-dumping proceeding concerning imports of certain laser optical reading systems, and the main constituent elements thereof, for use in motor vehicles, originating in Japan, Korea, Malaysia, the People's Republic of China and Taiwan (notified under document number C(1998) 4329)
Date: 1998-12-21
Institutions: European Commission
Subjects: Far East, Malaysia, anti-dumping legislation, import, sound reproduction equipment, vehicle parts

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Official Journal of the European Communities

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 21 December 1998

terminating the anti-dumping proceeding concerning imports of certain laser
optical reading systems, and the main constituent elements thereof, for use in
motor vehicles, originating in Japan, Korea, Malaysia, the People’s Republic of
China and Taiwan

(notified under document number C(1998) 4329)

(1999/55/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(2)

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries
the European
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Article 9 thereof,

not members

of

the European Communities (3)
anti-dumping

On 25 October 1997, the Commission announced
by means of a notice published in the Official
Journal of
the
initiation
proceeding
concerning imports into the European Community
of LORS originating in Japan, Korea, Malaysia, the
People’s Republic of China (hereinafter ‘the PRC')
and Taiwan and commenced an investigation.

an

of

After consulting the Advisory Committee,

2. Investigation period

Whereas:

A. PROCEDURE

1. Initiation

(1)

On 12 September 1997, a complaint was lodged
pursuant to Article 5 of Council Regulation (EC)
No 384/96 (hereinafter ‘the Basic Regulation'), by
the Association for Laser Optical Reading Systems
on behalf of Community producers whose collect-
represented significantly more than
ive output
50 % of the total Community production of certain
laser optical reading systems for use in motor
vehicles (LORS). The complaint contained suffi-
cient evidence of injurious dumping to justify the
opening of an anti-dumping proceeding.

(3)

(4)

The investigation period for the determination of
dumping covered the period from l October 1996
to 30 September 1997 (hereinafter referred to as
‘the investigation period'). The examination of
injury covers the period January 1994 to the end of
the investigation period.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. General remarks

In the notice of initiation, the Commission had
defined the product scope as laser optical reading
systems comprising compact disc tuners
(CD
tuners), disc-changers and car radios with a disc
control device (car radio).

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.

(3) OJ C 324, 25. 10. 1997, p. 2.

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(5)

(6)

(7)

The further investigation has firstly established that
the above elements
taken together cannot be
regarded as a ‘system' forming one single product,
in spite of certain given functional links existing
between these elements, as this would require that
the elements could only properly function together.
Indeed, the car radio can function on its own and
does also not contain a laser optical reading mech-
anism. A CD tuner likewise can function on its
own. The disc-changer is the only element which
must be linked to one of the other elements in
order to function. However, this cannot be consid-
ered sufficient to characterise all three elements
taken together as a system and thus one single
product.

Secondly, the investigation has by the same token
coverage would
established that
the product
radios, a large
encompass, with respect
percentage of these elements even if they are used
outside the laser optical reading system, i.e. if they
would not be used to reproduce CDs.

to car

For these reasons, it is considered that the above-
mentioned three elements cannot be regarded as
one system consisting of one single product. There-
fore, given the results of the investigation, it was
necessary to assess the three products separately,
namely car radios, CD tuners and disc-changers.

2. Car radios

(8) With respect

radios,

to car

the Community
industry has agreed on reducing the product
concerned by the present proceeding to CD tuners
and disc-changers by withdrawing the complaint as
far as car radios are concerned. As the investigation
has not revealed any Community interest grounds
to continue with the proceeding in the absence of a
to car
complaint,
radios should thus be terminated in accordance
with Article 9(1) of the Basic Regulation.

the proceeding with respect

3. CD tuners

3.1. Product under consideration and like product

(9)

CD tuners are products which incorporate in a
single housing a compact disc player, able to repro-
duce (read) digital audio signals (essentially music)
stored on one or more CDs, without having the
ability to record such audio signals (CN codes
8527 21 20 and 8527 21 70). A CD tuner generally
also incorporates a radio broadcast receiver. In this
respect it was established that CD tuners manufac-
tured and sold by the Community producers in the
Community market are alike, or closely resemble,
CD tuners manufactured in and sold for export

from the countries concerned to the Community.
Furthermore, CD tuners sold in the countries
concerned are also alike, or closely resemble, CD
tuners sold for export from the countries concerned
to the Community. All these products therefore are
to be considered a single product within the
meaning of Article 1(4) of the Basic Regulation.

3.2. Dumping and injury

(10)

The investigation established the existence of
dumping and injury. However, given the conclu-
sions as set out below, it is not necessary to detail
these findings.

(11)

(12)

3.3. Causation

it was examined whether

Pursuant to Articles 3(6) and 3(7) of the Basic Regu-
the imports
lation,
concerned have caused material injury or whether
the injury was caused by effects other
than
dumping.

In this respect, the market share of the dumped
imports decreased by nine percentage points
between 1994 and the investigation period,
i.e.
from around 61 % to around 52 %, while
Community consumption increased by around
129 % during the same period of time. This in-
dicates
from the countries
concerned, while increasing their exports in abso-
lute terms, did not do so to an extent reflecting the
the consumption in the
massive expansion of
Community.

the exporters

that

Prices of the exporters have declined by more than
18 % between 1994 and the investigation period.
the Community industry only
By comparison,
reduced their prices by around 8 %.

addition,

found for

concerned.

the
Limited price undercutting was
it mainly
In
imports
concerned non-homogeneous products with a great
variety of features and technical differences and
subject to rapid technological development. There-
fore,
the undercutting cannot be
found to have had a clear material impact on the
Community industry’s prices.

the effects of

(13)

The Commission has also examined other factors
that may have had an effect on the situation of the
Community industry.

to other third countries, between
With respect
1994 and the investigation period,
their import
volumes have increased significantly more than
both the consumption and the imports from the
countries concerned, i.e. by 700 % (from around
67 000 units to around 500 000 units), and their

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market shares also went up considerably by 16
percentage points,
from around 8 % to around
24 %. This shows that these other imports have
fully participated in and even increased more
the
quickly
Community consumption.

expansion found for

than the

As regards prices,
limited information gathered
from certain cooperating interested parties may
indicate that there has been high price undercut-
ting by these imports.

The increase of the market share of the imports
from third countries by 16 percentage points, seen
in comparison to the loss of market share of the
exports from the countries concerned of around
nine percentage points, and the loss of
the
Community industry of
two percentage points,
demonstrates that the exports from the countries
concerned have been more than fully replaced by
the imports from the abovementioned third coun-
tries. Indeed, it appears that the market shares of
both the Community industry and the exporters
from the countries concerned suffered from these
imports.

(14)

In view of the above and particular attention paid
to imports from other third countries,
it would
appear that imports from the countries concerned
in isolation have a materially injurious
did not
impact on the
the Community
situation of
industry. Imports from other third countries have
contributed to such an extent to the precarious
situation of
they
should be considered as breaking the causal link
between the dumping and the injury found.

the Community industry that

3.4. Conclusion

(15)

The proceeding with respect to CD tuners should
therefore be terminated.

4. Disc-changers

4.1. Product under consideration and like product

(16) With respect to disc-changers, these are sound-
reproducing apparatus with a laser reading system
usually placed in the boot of a motor vehicle (CN
code ex 8519 99 18). They are able to store and
process several CDs. In order to function and to
reproduce sounds, they must be connected to a
‘head' unit with a disc control device (usually a car
radio). In this respect the investigation has estab-
lished that disc-changers manufactured and sold by
the Community industry in the Community
market are alike, or closely resemble, disc-changers
manufactured in and sold for export
from the
countries concerned to the Community. Further-
countries
sold
more,

disc-changers

the

in

sold for export

concerned are also alike, or closely resemble, disc-
changers
from the countries
concerned to the Community. All these products
therefore are to be considered a single product
within the meaning of Article 1(4) of the Basic
Regulation.

4.2. Dumping, injury and causation

(17)

The investigation established the existence of in-
jurious dumping. However, given the conclusions
as set out below, it is not necessary to detail these
findings.

4.3. Community interest

(18) When assessing the Community interest aspects of
the present case, the Commission examined the
likely costs and benefits that the imposition of
measures would have on the economic operators
concerned.

the Community industry
The market share of
started from 0 % in 1996 but still only reached
1,4 % during the investigation period. On the basis
of an average duty of 20 % on the imports value of
the product concerned,
the amount of duties
imposed on imports of this product would repre-
sent between 6 and 10 times the total value of
production of the Community industry during the
investigation period. Even if production were to be
expanded in accordance with the plans of
the
Community industry, the total value of production
would, in the foreseeable future, only be a fraction
of the amount of duties imposed. The above situa-
tion results from the fact that around 81 % of the
disc-changers sold within the Community during
the investigation period originated in the countries
under investigation.

In addition, when setting up its production, the
Community industry was well aware that it was
doing so in an environment of depressed prices.
Disc-changers had been on the market
for a
number of years and have indeed been imported by
the Community industry, mainly from Japan. The
Community industry only commenced with its
Community activity in 1996, when the product was
already well-established on the market, i.e. at a very
late stage. Under these circumstances it is difficult
to assess the future development of the industry
and the possible beneficial effect of measures.

Furthermore, the overall advantages to be gained by
the Community industry in this particular situa-
tion, which are likely to be minimal given the
immediately
relatively low level of employment
affected, must be weighed against
the probable
disadvantages, in particular for consumers. Indeed,

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the product under consideration is a widespread
consumer electronics product with a large growth
potential. It is likely that the imposition of duties
would severely limit consumer choice, as many
exporters, especially those with high duties, would
be likely to withdraw from the Community market.
This loss of choice as regards the current variety of
models available could not be compensated in the
foreseeable future by the Community industry. The
current high market presence of these exporters
and the fact that they offer a wide model range
comprising high quality products would mean that,
they were to withdraw, consumers would be
if
deprived of
technological
taking advantage of
variety and development, without having any viable
alternative in the foreseeable future. In this situa-
tion it is considered that the interests of consumers
are by far outweighing the interests of
the
Community industry.

In such a situation, it can be considered that the
imposition of measures would disproportionately
affect
the
product concerned.

traders and consumers of

importers,

4.4. Conclusion

(20) Under these circumstances, the proceeding with
respect to disc-changers should be terminated on
the grounds of Community interest.

C. TERMINATION OF THE PROCEEDING

(21)

The complainants were informed of the essential
facts and considerations on the basis of which the
this
Commission
proceeding. Subsequently, the complainants made
known their views, which were then examined in
detail by the Commission,

terminate

intended

to

HAS DECIDED AS FOLLOWS:

Sole Article

The anti-dumping proceeding concerning imports of
certain laser optical
reading systems, and the main
constituent elements thereof, for use in motor vehicles,
falling within CN codes 8527 21 20, 8527 21 70, and
ex 8519 99 18, originating in Japan, Korea, Malaysia, the
People’s Republic of China and Taiwan is hereby ter-
minated.

C o n c l u s i o n o n C o m m u n i t y i n t e r e s t

Done at Brussels, 21 December 1998.

(19)

In view of all the above, compelling reasons exist
on Community interest grounds not to adopt anti-
dumping measures as regards imports of disc-
changers from the countries concerned.

For the Commission

Leon BRITTAN

Vice-President