November 13, 2008
Companies Pay Fines For Price Fixing
Three Asian electronics companies have agreed to pay $585 million in fines for intentionally driving up the prices of LCD screens.
In a plea deal reached on Wednesday, LG Display Co. Ltd., Sharp Corp., and Chunghwa Picture Tubes Ltd. agreed to cooperate in a U.S. Justice Department antitrust investigation.
Scott D. Hammond, Deputy Assistant Attorney General, said the scheme cost consumers, and retailers like Dell Inc., Motorola, and Apple Computers. The total losses have not yet been determined.
"These price-fixing conspiracies affected millions of American consumers who use computers, cell phones and numerous other household electronics every day," Hammond said. "By conspiring to drive up the price of LCD panels, consumers were forced to pay more for these products."
The $70 billion worldwide market for LCD screens has led regulators in Asia and the European Union to open investigations into LCD pricing.
There is a $70 billion worldwide market for LCD screens. Regulators in Asia and the European Union also have opened investigations into LCD price gouging.
According to the Justice Department, LG Display America agreed to pay $400 million in fines for fixing prices of certain LCD panels during a 5 year period from 2001 to 2006. The fine is the second highest ever imposed by the Justice Department antitrust division.
Chunghwa, a Taiwanese company, will pay $65 million in fines for participating in the same price-gouging conspiracy.
Sharp agreed to pay $120 million for a separate conspiracy that gouged prices on LCD panels sold to Dell, Motorola, and Apple. The panels were used in Apple's iPod, Motorola Razr phones, and many computer monitors.
"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," the company said in a statement.
According to a Sharp spokesman, many company officials will also return up to 30 percent of their compensation for three months to ease shareholder concerns.
"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," the company said.
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