Shares of flat panel maker Chimei Innolux Corp. were sharply lower in Thursday morning trade after the European Commission slapped a heavy fine on the company for alleged price fixing, dealers said. Underperforming the broader market, Chimei Innolux fell 4.70 percent to NT$38.55 (US$1.28) with 47.45 million shares changing hands, while the benchmark weighted index was up 0.57 percent at 8,753.80. The European Commission Wednesday imposed a total of 433.92 million euros in fines on four Taiwanese flat panel makers for violating the EU's competition rules. The companies include Chi Mei Optoelectronics Corp., which merged with Innolux Display Corp. to form Chimei Innolux in March. Chimei Innolux got the heaviest fine of 300 million euros among the four companies, while AU Optronics Corp. (AUO) was fined 116.8 million euros, Chunghwa Picture Tubes Ltd. was fined 9.02 million euros, and the fine for HannStar Display Corp. was 8.1 million euros. A Chimei Innolux executive said the punishment was 'really too harsh.' 'Yes, the fine is heavy. That's why investors rushed to dump their Chimei Innolux shares this morning, ' Grand Cathay Securities analyst Jeff Chang said. Chimei Innolux said it will take a close look at the EU decision before deciding how to react to the punishment. 'If Chimei Innolux decides to assign a provision in the fourth quarter to cover the loss from the fine, I expect the impact on its bottom line cannot be ignored,' Chang said. Chang said the fine could cut the company's earnings per share by NT$1.64 for 2010. The analyst had previously expected the company would post an EPS at NT$0.4 and the fine could make Chimei Innolux post a loss per share at NT$1.24. For AU Optronics, Chang said the fine is expected to cut the company's EPS to NT$0.98 for 2010 from the previously estimated NT$1.50 if it also assigns a provision to cover the fine in the fourth quarter. However, AUO has said it will file an appeal with the General Court in Luxemburg and vigorously defend its business practices. AUO shares fell 1.79 percent to NT$30.25 in Thursday morning trade. For Chunghwa Picture Tubes and HannStar Display, the impact on their bottom lines could be limited due to the relatively small amounts of fines, Chang said. The European Commission also slapped a fine of 215 million euros on LG Display of South Korea for the same accusation. 