Asian LCD makers fined for price-fixing

Asian manufacturers settle for $585 million

By Tom Ramstack | Wednesday, November 12, 2008

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Prices for flat-screen televisions, personal computers and iPods will likely fall since Asian manufacturers of liquid crystal displays agreed to settle an antitrust lawsuit Wednesday, Justice Department lawyers said.

Major electronics manufacturers LG Display Co., Sharp Corp. and Chunghwa Picture Tubes Ltd. agreed to pay $585 million in fines to settle the department's charges of price-fixing.

The companies sell liquid crystal displays to American corporations such as Apple Inc., Dell Inc. and Motorola Inc.

As a result of agreements between the Asian manufacturers to set prices for their products, "consumers were forced to pay more for these products," Thomas O. Barnett, head of the Justice Department's antitrust division, said during a press conference Wednesday in Washington.

Businesses that agree to set prices for their industry, rather than letting marketplace competition determine costs to consumers, violate antitrust provisions of the federal Sherman Act.

Government lawsuits alleging violations of the act were filed Wednesday against the Asian manufacturers in San Francisco.

Liquid crystal display panels are used in computer monitors, televisions, mobile phones and numerous other electronic devices. The worldwide market of liquid crystal displays reached $70 billion in 2006.

Unnamed representatives of the Asian manufacturers held what they called "crystal meetings" with competitors during which they agreed on the prices they would charge customers, the Justice Department reported.

Breaking up their alleged scheme is likely "to lead to lower prices," Mr. Barnett said. He would not give an estimate how low prices would fall.

The bulk of the fines, or $400 million, is being paid by LG Display, a South Korean corporation, which also pleaded guilty to participating in a conspiracy from September 2001 to June 2006. It was the second-largest antitrust fine in U.S. history.

Sharp, a Japanese company, agreed to pay a $120 million for conspiracies to fix prices of liquid crystal displays sold to Dell for its computers, to Motorola for Razr mobile phones and to Apple for its iPod portable music players.

Chunghwa, a Taiwanese manufacturer, agreed to pay $65 million for participating with LG Display Co. to fix prices on display panels sold worldwide.

So far, no corporate executives are facing criminal charges. But "the investigation is continuing," Mr. Barnett said.

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