backtop


Print 47 comment(s) - last by dever.. on Nov 20 at 1:31 PM

Fines to involved firms total $585 million

The economy is tough currently around the world and here in America. While most technology firms simply do the best they can in the current economic climate, some take things too far and turn to illegal means to protect profits.

This was the case for three of the top LCD panel makers in the world. Sharp, LG, and Chunghwa Picture Tubes have all pled guilty to price fixing in the LCD market. The three firms have agreed to pay fines totaling $585 million to the U.S. Justice Department.

The largest fine levied against one of the three firms was against LG. LG alone is responsible for $400 million of the fine with the remaining $85 million coming from Sharp and Chunghwa. The exact amount that the latter two firms will pay is unknown.

The New York Times reports that the $400 million fine against LG is the second largest fine ever levied by the Justice Department's antitrust division. The largest was a $500 million fine paid by F. Hoffman-La Roche in 1999 for price fixing in nutritional supplements.

These fines may be the end of the price fixing saga for the three firms here in the U.S., but things in Europe and Asia are just getting started. The investigation was conducted jointly between authorities in the U.S., Europe, and Asia.

When all is said and done the total cost for each of the LCD makers will be much higher than the U.S. fines alone. In addition to fines from the Justice Department, the New York Times reports that several class action suits have been filed on behalf of consumers and distributors who purchased screens made by the companies.

Three American firms who purchased LCD panels from the companies in the scandal specifically named by the Justice Department are Dell, Apple, and Motorola. If the price fixing scheme hadn’t been executed by the firms, the panels would be even cheaper than they are now according to authorities.

These LCD makers aren't the only tech companies who have been in trouble for price fixing. NVIDIA agreed to a settlement without admitting guilt over alleged price fixing in the GPU industry.



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Class Action?
By thejez on 11/13/2008 1:05:03 PM , Rating: 3
Where do we sign up for the Class Action or collect our money from the justice dept? I'm sure we all have panels sitting on our desks made by these guys and got taken.




RE: Class Action?
By KingstonU on 11/13/2008 1:15:57 PM , Rating: 2
Sadly, this will likely be just like with the RAM price fixing debacle with the 10 or so memory companies. Fines were paid, but were any of the consumers who were over charged in the first place ever get one cent of that lawsuit money?


RE: Class Action?
By inighthawki on 11/13/2008 1:19:31 PM , Rating: 2
you have to remember, overcharged or not, the consumer bought it because they felt it was a good enough price. If it was too expensive, nobody would buy it.

The expensive part is irrelevant, what matters is that they bought it at a certain price. period. There should not be rebates because people find out they COULD HAVE gotten something at a lower price if circumstances would have been different


RE: Class Action?
By KingstonU on 11/13/2008 1:28:15 PM , Rating: 3
True, the difference in this situation versus the ram was that virtually all RAM companies were involved and so to the buyer looking at the price of memory relative to another they felt like they were getting a good deal. But jointly all the companies grouped to effectively raise and skew the line that the "good deal" mark lies on.

In this situation it was only 3 companies, so an knowledgable buyer could still shop around.


RE: Class Action?
By fcx56 on 11/14/2008 10:31:09 AM , Rating: 2
quote:
so an knowledgable buyer could still shop around.


While I understand your point, when I bought my 30" Cinema Display in 2004 for my HTPC it was, to my knowledge, the only 30" consumer PC display, so that wasn't really possible. It just so happens to use an LG.Philips LCD panel. I felt/feel fine about the purchase so I'm not looking for a handout, but shopping around on the bleeding edge can be difficult. I understand the Dell 3007 also used LG.Philips panels.


RE: Class Action?
By 91TTZ on 11/13/2008 4:01:31 PM , Rating: 2
But why is the US Government able to collect $400 million when they were not the entity which was ripped off? The people are the ones who unknowingly paid the higher prices, and they're the ones which should be reimbursed.


RE: Class Action?
By inighthawki on 11/13/2008 4:22:12 PM , Rating: 4
It doesnt matter if they were the ones ripped off. The government sets the laws, and that was a fine for breaking the law. Its the same as a parking or speeding ticket, they dont give that money back to the people.


RE: Class Action?
By Ringold on 11/13/2008 4:52:05 PM , Rating: 3
quote:
they dont give that money back to the people.


If you think about it, they do. If the speeding ticket goes to fund the operation of the police, we all benefit by the protection/rule of law/etc. Well, it's not a total loss at least.


RE: Class Action?
By inighthawki on 11/13/2008 5:56:14 PM , Rating: 2
ok really? You know that's not what i meant...

To specify, i meant, not DIRECTLY. They don't take the money and split it up between people. (Like the previous post implied by giving rebates)


RE: Class Action?
By paydirt on 11/14/2008 8:35:12 AM , Rating: 1
thejez,

If you really think that you "got taken" then why did you agree to make the purchases? It was still an economical decision for you, even if they fixed the prices.

Anyhow, I wonder what China will have to say about this since LG is a Chinese company and getting heavily fined by the U.S.


RE: Class Action?
By protosv on 11/14/2008 10:22:35 AM , Rating: 4
RE: Class Action?
By Ratinator on 11/13/2008 5:51:21 PM , Rating: 2
Sorry but I don't agree with you on this one (at least not in all cases). Personally I wanted the best LCD on the market.....did I buy it because it was at the right price point, no I didn't. I bought it because unfortunately all other similar models were in the same price range. You could say that I should have bought another companies model, but guess what, they followed a similar pricing scheme whether they were involved in the price fixing or not.


RE: Class Action?
By inighthawki on 11/13/2008 5:58:16 PM , Rating: 3
If you bought it though, it was your judgment which told you that the price justified the quality of the product. Whether or not you thought it was overpriced/underpriced/priced just right etc, you still bought it, which means at some point in time you thought it was fair enough. People will not buy things unless they feel its at a reasonable enough price, whether it be slightly high or not.


RE: Class Action?
By mindless1 on 11/13/2008 9:40:59 PM , Rating: 2
On one hand I agree with your concept of consumer choice when making a purchase, but ultimately you are wrong within this context because if that were all there was to it, there'd be no law against the price fixing in the first place. Since there is a law, and a penalty attached, the money should go to those who were effected.


RE: Class Action?
By inighthawki on 11/13/2008 10:10:18 PM , Rating: 3
Im not saying price fixing is right, im just saying that somewhere down the line when you decided to buy it, you had some thoughts of it being of a reasonable price.


RE: Class Action?
By JS on 11/13/2008 10:42:23 PM , Rating: 1
That is actually pretty irrelevant. If there were only two manufacturers of food in the world and they decided to rig the prices, would you by that reasoning find any price reasonable (because you would have to buy food regardless)? Extreme example, sure, but it shows an important aspect of this, namely that the injustice here is not primarily committed toward the consumer who bought the screen and paid some extra dollars. It is committed towards society as a whole.

Since the basis of capitalist society is free and fair competition it is extremely important to safeguard this. When companies start price rigging they distort the very foundation of capitalism. All the extra money people had to pay for their LCD screens, and that went into the company's pockets, could instead have been used to consume other goods which would have been good for the economy and therefore for everyone.


RE: Class Action?
By inighthawki on 11/13/2008 11:09:43 PM , Rating: 3
but thats the thing, we're not talking about a monopoly, just a specific set of companies. There are plenty of LCDs that im sure are cheaper, but if u feel that those are of a good enough quality, something inside you told you it was worth it.


RE: Class Action?
By mindless1 on 11/15/2008 11:52:52 PM , Rating: 2
But if it really was worth it, then why would they bother to fix prices?

It's obvious, they acted contrary to a fair market. If only they had not done that, THEN we'd have a fair market where the virtues (or lack thereof) would determine a FAIR market value.

Worth is relative to perception. Perception is based on market value. Market value was based on price-fixing.

Bottom line - if it's not the market, but rather a collusion that sets price, it has no place in our market.


RE: Class Action?
By thejez on 11/13/2008 1:33:35 PM , Rating: 2
"Sadly, this will likely be just like with the RAM price fixing debacle"

I'm sure I wont make millions like the lawyers will but I am at least actually a part of the DRAM lawsuit... I would like to do the same for this one. Even if my portion is $5 it would make me feel a little better. :)


RE: Class Action?
By Smartless on 11/13/2008 1:38:51 PM , Rating: 2
Seriously though. Where does the money go? I mean that's a lot of money to go *poof*.


RE: Class Action?
By dever on 11/13/08, Rating: 0
RE: Class Action?
By thejez on 11/13/2008 1:53:54 PM , Rating: 2
in the case of the DRAM lawsuit after they pay the lawyers and the companies to administer the lawsuit/payout they split up the remaining money and pay people based on how much they spent in relation to other people.

"The Court approved a plan of allocation and distribution of the Net Settlement Fund on a pro rata basis among Class members based on the dollar amount each Class member paid to Defendants for direct purchases of DRAM from the Defendants during the period of April 1, 1999 through June 30, 2002."

you can read all about the facts on the website:
http://www.dramantitrustsettlement.com/dram/defaul...


RE: Class Action?
By Murloc on 11/14/2008 2:50:29 PM , Rating: 2
my LG monitor costs less than the samsung brother. Weird.


RE: Class Action?
By Cr0nJ0b on 11/13/2008 1:28:25 PM , Rating: 2
Do you really need a $10 off coupon for LG Monitors that you can only use on their website? I'd rather see Justice take the cash and start cracking down on all the consumer electronics firms that force retailers to sell products and inflated prices...or the beverage distributors that force buyers to buy lower end wines to get access to higher end and more exclusive options...

Of course they will probably just take the cash and spend it on high priced prostitutes...oh well, at least someone will get some use out of it...


RE: Class Action?
By dever on 11/13/2008 1:51:31 PM , Rating: 1
Sadly, this is the attitude of many. They would rather see the money willing given by a consumer to buy a product be confiscated and line the pocket of a politician, than to go to the manufacturer who may use the money to expand production, increase r&d, etc, etc.


RE: Class Action?
By zxern on 11/14/2008 12:34:21 PM , Rating: 3
Yeah except that extra cash won't go to research or expanded production. It'll go right into executives pockets for the great quarterly returns.


RE: Class Action?
By dever on 11/20/2008 1:31:02 PM , Rating: 2
Except that even with price fixing, some small outsider will want to horn in on the profits and make their profits lower. Even oil cartels have proved that members will lower prices to beat out the "competition" rather than keep them fixed.

The desire to make money is matched by the consumer's desire to save money, and prices invariably reflect this fact.


Not harsh enough
By mattclary on 11/13/2008 1:48:23 PM , Rating: 2
Apparently these fines are nowhere near enough as these companies keep doing it. They apparently are making enough money by price fixing that they consider it lucrative enough to continue doing.




RE: Not harsh enough
By Ringold on 11/13/2008 5:01:43 PM , Rating: 3
It'd be nice to see people hauled off in handcuffs. Big fines + jail time > big fines

I'm not so big on jail time for all white-collar crime, but this one is just obvious. Everyone that's ever taken any business class, probably even at lame online universities, should know price fixing is illegal. Cartels are illegal. No private-sector exceptions. Heck, don't even need a business degree, isn't it common knowledge??


RE: Not harsh enough
By Lerianis on 11/13/2008 9:17:01 PM , Rating: 2
There will NEVER be anyone hauled off to jail for things like this, unless it is EXTREMELY high profile. Why? Because most businesses are doing crap like this, everyone KNOWS that they are doing crap like this, and the Justice Department looks the other way until a news agency or someone else sends them evidence that these things are happening that they CANNOT explain away.


Screw me once...
By fatbaldandhappy on 11/13/2008 4:59:23 PM , Rating: 3
So the 'justice' dept. collects $585 million because the price fixing negatively impacted consumers. Consumers got ripped off, but will not be compensated. The companies who ripped off the consumers must now come up with $585 million to pay the fines to the 'justice' dept. Where do you think the're going to get that $585??? That's right- straight from the consumers who were ripped off in the 1st place. Next it's the lawyers who will make millions more in class action law suits and the consumer will be screwed for a 3rd time. Then the other countries governments and lawyers are going to screw us some more...

Anyone elses bung hurt?




RE: Screw me once...
By Lerianis on 11/13/2008 9:20:06 PM , Rating: 1
Well, there is an easy solution to this that the lawmakers don't want to take: make it ILLEGAL for the fines here to be passed onto consumers by raising the prices of items that the companies sell.

If their prices for something go up within..... 6 months, or so..... they are back in court for breaking that law that I would like passed, and this time..... there is JAIL TIME on the table.


RE: Screw me once...
By JS on 11/13/2008 10:25:07 PM , Rating: 1
You are not thinking straight. The affected companies cannot just raise the prices above the other (law-abiding) manufacturers, because then no one will buy their products.

What will happen is that the companies who broke the law will have a worse bottom line because of this fine. Perhaps they will even go out of business, which really is what should happen to companies who willingly and knowingly disrespect the law and their customers.

The fine will act as a deterrent for other companies, and society as a whole will benefit from the lower prices on consumer goods.


DT writers failed second grade arithmetic?
By Denithor on 11/14/2008 6:01:14 PM , Rating: 2
$400 million + combined $85 million = $585 million ??

quote:
The three firms have agreed to pay fines totaling $585 million to the U.S. Justice Department.

The largest fine levied against one of the three firms was against LG. LG alone is responsible for $400 million of the fine with the remaining $85 million coming from Sharp and Chunghwa. The exact amount that the latter two firms will pay is unknown.




By crystal clear on 11/15/2008 12:10:32 PM , Rating: 2
Well D.T. readers/commentators dont really bother to read the articles, they are just too anxious to post their opinions/comments on the subject matter.

For them (the readers) contents (of the article) dont really matter rather your opinions matter, depending on the subject under discussion-you are either rated up or down or recieve a counter argument or simply ingnored.

Your opinions are more important than the article itself.....


uh...
By sprockkets on 11/13/08, Rating: 0
RE: uh...
By Lerianis on 11/13/2008 9:25:36 PM , Rating: 2
Just because you can buy three LCD screen for what you paid for one 4 years ago does NOT mean that the prices are not still too high.
Frankly, the prices of electronics, according to people I know in the industry, are supposed to go down about 50% every year, as they find more efficient ways to make things. Plus, at the BEGINNING, some thing are cheaper to make. So, let's see: that means that your 500 dollar LCD 4 year later: $250, $125, 62.50, 31.25.... there's your cost it should be now: $31.25. Is it anywhere NEAR that price? Nope!

Most companies today are keeping prices high through price fixing, LG and the others were just the ones who got caught at it.


RE: uh...
By sprockkets on 11/14/2008 5:03:31 AM , Rating: 1
Your logic makes absolutely no sense. After another year, an LCD should cost less than going to dinner.

What next? We start demanding those Chinese workers get even less money per month in wage so we can enjoy a $30 LCD monitor?

What next? It's a crime to recoup billions of dollars in investment? You think the reason why prescription companies charge so much is because those pills cost $5 each to produce? It's because it takes millions to come up with and test these pills out. And once they are done with one pill, they use that money to solve other people's ailments.

I guess there are retards like you out there that demand things get cheaper for the sake of getting cheaper, regardless of whether that can happen or not.

Funny story: HP makes color laserjets for $200. They all used to be assembled in the USA, and made in Japan by the people who make up the imaging system: Canon. Nowadays, it's all China. And sadly, they now cost more to run than an inkjet does. But the more expensive laserjet you buy, the cost of the toner goes down.
My point? It cost money to do things, no matter what! That $200 color laserjet costs more than $200 for HP to make.


Fines
By CommodoreVic20 on 11/13/2008 1:22:39 PM , Rating: 2
I sure hope the fines are much larger then the profits they made from the price fixing otherwise this will only serve as an incentive to more price fixing.




Considering the pretty low prices for LCD monitors...
By Motoman on 11/13/08, Rating: 0
By mindless1 on 11/13/2008 9:47:52 PM , Rating: 2
Note it was these specific companies and specific monitors, not random other companies and different monitors today.


Do anyone realize....
By amuryo on 11/13/2008 9:40:19 PM , Rating: 2
That the pay the used to pay the fines will eventually goes to the future buyer? So expect to no price drop unless the competition if fierce enough to make them have to. (Given that samsung and lg are one of the largest LCD manufacture, it will unlikely to happen, at least on anytime soon)




GET USED TO IT
By JonnyDough on 11/14/2008 1:49:42 AM , Rating: 2
With more and more monopolization happening world wide, expect more of the same. When you have two giant companies having 95% market share, what do you think is going to happen? This is the problem with giant global corporations. The world trade commission really needs to be splitting up most of them. In the end, it's the dirty CEO/CFOs, etc that are setting the prices - and they're the bastards that need to pay. Not the company itself, not the lower level people who's jobs get slashed, but the jerks who are responsible for doing the illegal acts in the first place. May the SOBs getting rich while the poor suffer under their leadership in this "great" "free" capitalist society all rot in Hell.




By BZDTemp on 11/14/2008 8:07:44 PM , Rating: 2
For a guy like me thinking it's great when the EU is targeting companies like Microsoft for abusing their market position and getting flak for it. It is fun to see how so many in this place complained about that and now find government regulation is fine :-)

Seems in principle everybody want the government to stay out of peoples business but that apparently only goes so far. Or maybe it's just for non-US governments to stay out of the US companies business!




Panels or monitors?
By Clienthes on 11/14/2008 8:32:23 PM , Rating: 2
Maybe I misread this, but I thought it was refering to price fixing with regard to LCD panels, not monitors and televisions.

So the only people that got ripped of were other companies that bought the panels to produce their monitors, who were then forced to accept lower profit margins to compete with the price-fixing companies own products which would not have been affected.

Sure, LG could keep consumer prices artificially higher this way, but it looked like hurting competitors' profit is what the issue was here. Not good for us, certainly, but since there are other panel manufacturers, it seems unlikely we saw much price difference at all.




Sony flash drive
By blastah on 11/17/2008 4:02:36 PM , Rating: 2
29.99 Sony style USA 89.99 sony style Canada, price fixin or Price F@#&ing!!!




I have a dream!
By Vokus on 11/13/08, Rating: -1
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki