twice connect
careers

LG, Sharp, Chunghwa Fined $585M For LCD Price Fixing

11/12/2008 02:00:00 PM Eastern

UPDATED! Washington — More details are in concerning the $585 million in criminal fines being levied against LG Display, Sharp and Chunghwa Picture Tubes by the Department of Justice's (DOJ) antitrust division for LCD panel price fixing.

In a release by the DOJ the three companies have agreed to pay the fines for their roles in conspiracies to fix prices in the sale of LCD panels. Of the $585 million in fines, LG Display 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.

Sharp issued a statement Wednesday saying it agreed to pay a fine of $120 million “regarding price fixing of TFT LCDs with respect to a limited number of customers.” Further, Sharp’s chairman and CEO and certain board members have offered shareholders and other concerned parties to voluntarily return 10 percent to 30 percent of their remuneration for three months starting in December 2008.

“Sharp understands the gravity of this situation and will strengthen and thoroughly implement measures to prevent the recurrence of this kind of problem, and will earnestly work to regain the public’s confidence,” according to statement issued by the company.

Sharp pointed out that the DOJ’s investigation of price-fixing practices of the world’s major TFT-LCD manufacturers began in December 2006, “and Sharp has fully cooperated in this investigation,” the company said.

“After carefully taking into consideration the applicable laws and regulations, the facts and other factors, Sharp has decided that the best possible course of action would be to conclude the aforementioned agreement.”

Sharp said it will record the amount as “an extraordinary expense for the fiscal period of Oct. 1 through Dec. 31, 2008.”

Chunghwa agreed to pay a $65 million fine for its participation in the price-fixing scheme from September 2001 through December 2006.

Representatives from LG Display and Chunghwa Picture Tubes had not responded to TWICE’s requests for comment as this was posted.

“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 in DOJ’s statement.

LG Display Co. Ltd, a South Korean corporation, and its wholly owned subsidiary, LG Display America Inc., a California company, 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 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 from April 2001 to December 2006 for use in computer monitors and laptops, to Motorola from fall 2005 to the middle of 2006 for use in Razr mobile phones, and to Apple Computer 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, said in the DOJ statement. “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.”

DOJ said 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.

Sharp is charged with participating in three separate conspiracies, to fix the price of TFT-LCD panels sold to Dell, Motorola and Apple by: participating in bilateral meetings, conversations and communications in Japan and the United States to discuss the prices of TFT-LCD panels to be sold to Dell, Apple and Motorola; agreeing during those bilateral meetings, conversations and communications to charge prices of TFT-LCD panels at certain predetermined levels to Dell, Apple and Motorola; issuing price quotations in accordance with the agreements reached; and exchanging information on sales of TFT-LCD panels to be sold to Dell, Apple and Motorola for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

LG, Sharp and Chunghwa are each charged with price fixing in violation of the Sherman Act. Each violation carries a maximum fine of $100 million for corporations, DOJ said.

The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine, the department stated.

Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the San Francisco Field Office of the antitrust division at (415) 436-6660.

PHOTOS
ProSource Meeting Filled With Optimism

San Antonio — Optimism reigned at ProSource’s

Ingram Draws 500 To Spring Vendor Expo

Scottsdale, Ariz. — Ingram Micro Consumer

CEA Holds ’14 Digital Patriots Dinner

Washington — CEA held its annual Digital Patriots’

8 Technology Accessories For a Greener Earth

An Earth Day review of Earth-friendly products, by

BrandSource Shows Diverse Product Selection

BrandSource’s Summit show at the Marriott World

Scenes From Toy Fair

By Lisa Johnston

ADL Honors Morales, Bilas, Paull, Weedfald At Annual Dinner

New York — The Anti-Defamation League’s National