November 12, 2008

The United States Department Of Justice has announced LG, Sharp, and Chunghwa have agreed to plead guilty in an LCD price-fixing conspiracy and to pay $585 million in fines. What follows below is the official USDOJ release.

It's unfortunate LG and Sharp participated in price-fixing but these fines are a drop in a million-gallon tank of water. Hundreds of billions of dollars have been profited from with regards to LCD sales, and LG's $400 million fine is a mere fraction of what they profited from. I estimate the their fine at maybe 2% of what LG profited from LCD sales. This is a highly conservative estimate.

The Sherman Act is capped at how much a fine for a corporation can be, which is completely stupid. The courts should decide how much damage a corporation does to society, how much they profited, and hand down the fine according to the illegal profits made. If you knew you were going to make $20 billion in LCD profits by price-fixing but the fine would be $400 million...it's a no-brainer in the corporate world what your choice is going to be.

While LG, Sharp, and the lesser-known Chunghwa corporations are named in the USDOJ fine, I also want to make clear LG and Sharp are great companies who have served technology well. It's unfortunate we had some powerful employees give these companies a bad name.

- DigitalDingus

Three leading electronics manufacturers – LG Display Co. Ltd., Sharp Corp., and Chunghwa Picture Tubes Ltd. ("CPT") – have agreed to plead guilty and pay a total of $585 million in criminal fines for their roles in conspiracies to fix prices in the sale of liquid crystal display (LCD) panels, the Department of Justice announced. Of the $585 million in fines, LG will pay $400 million, the second highest criminal fine ever imposed by the Department’s Antitrust Division.

Today’s charges were filed in U.S. District Court in San Francisco. The companies have agreed to cooperate with the Department’s ongoing antitrust investigation.

Thin-Film Transistor-Liquid Crystal Display (TFT-LCD) panels are used in computer monitors and notebooks, televisions, mobile phones, and other electronic devices. In 2006, the worldwide market for TFT-LCD panels was approximately $70 billion. Companies directly affected by the LCD price-fixing conspiracies are some of the largest computer, television and cellular telephone manufacturers in the world, including Apple, Dell and Motorola.

"Today’s charges and criminal fines emphasize the commitment of the Department of Justice to crack down on international cartels," said Attorney General Michael B. Mukasey.

LG Display Co. Ltd, a South Korean corporation, and its wholly-owned subsidiary, LG Display America Inc., a California company (LG), agreed to plead guilty to participating in a conspiracy from September 2001 to June 2006 to fix the price of TFT-LCD panels sold worldwide. During the conspiracy, LG Display Co. Ltd. was known as LG.Philips LCD Co. Ltd. (a joint venture between LG Electronics and Philips Electronics) and LG Display America Inc. was known as LG.Philips LCD America Inc.

Sharp Corp., a Japanese consumer electronics manufacturer, has agreed to pay a $120 million fine for its participation in separate conspiracies to fix the price of TFT-LCD panels sold to Dell Inc. from April 2001 to December 2006 for use in computer monitors and laptops; to Motorola Inc. from fall 2005 to the middle of 2006 for use in Razr mobile phones; and to Apple Computer Inc. from September 2005 to December 2006 for use in iPod portable music players.

Chunghwa, a Taiwanese TFT-LCD panel manufacturer, has agreed to pay a $65 million fine for its participation with LG and other unnamed co-conspirators in a conspiracy from September 2001 to December 2006 to fix the price of TFT-LCD panels sold worldwide.

"These price-fixing conspiracies affected millions of American consumers who use computers, cell phones and numerous other household electronics every day," said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. "These convictions, and the significant fines they carry, should send a clear message that the Antitrust Division will vigorously investigate and prosecute illegal cartels, regardless of where they are located."

LG and Chunghwa are charged with carrying out the conspiracy by:

• Participating in meetings, conversations, and communications in Taiwan, Korea and the United States to discuss the prices of TFT-LCD panels;
• Agreeing during those meetings, conversations and communications to charge prices of TFT-LCD panels at certain pre-determined levels;
• Issuing price quotations in accordance with the agreements reached; and
• Exchanging information on sales of TFT-LCD panels, for the purpose of monitoring and enforcing adherence to the agreed-upon prices.