Six LCD makers have been assessed fines of over $850 million (€648 million) by the European Commission for allegedly "operating a cartel which harmed European buyers of television sets, computers, and other products" infused with LCD technology. The companies involved include Samsung, LG, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes, and HannStar.
"Foreign companies, like European ones, need to understand that if they want to do business in Europe they must play fair. The companies concerned knew they were breaking competition rules and took steps to conceal their illegal behavior. The only understanding we will show is for those that come forward to denounce a cartel and help prove its existence," said Commission Vice President in charge of competition policy Joaquín Almunia.
According to the European Commission, the six LCD makers colluded for four years to fix prices, including price ranges and minimum prices, and exchanged information on future production planning, capacity utilization, and other commercial conditions. What's more, the so-called cartel reportedly held monthly multilateral meetings some 60 times, most often in hotels in Taiwan.
While Samsung was one of the six LCD makers involved, the company "received full immunity" for bringing the cartel to the Commission's attention and providing information on how it was run.
Oracle is accusing memory chip maker Micron of conspiring to fix prices, alleging it overcharged Sun Microsystems for memory parts, Bloomberg reports.
In its complaint, Oracle said Micron and other DRAM makers "conspired to control production capacity, raise prices or slow their decline, allocate customers, and otherwise unlawfully overcharge their DRAM customers." The antitrust complaint was filed earlier this week in federal court in San Jose, California, and also names Hynix, Samsung, Eplida, and Infineon as co-conspirators.
Oracle's basing its complaint in part on a 2002 U.S. Justice Department investigation of memory chip price fixing, which ultimately resulted in four companies and 16 people being fined a total of around $731 million, Oracle claims.
Following an investigation into the business practices of several LCD makers, New York Attorney General Andrew Cuomo has gone and sued a number of companies on allegations of price fixing, a charge he contends has been going on for a decade.
"Our investigation shows that an illegal cartel eliminated competition in the marketplace for LCD screens, made its own secret decisions to boost prices, and then took steps to make those high prices stick," Cuomo said. "As a result, hard-pressed New York cities, towns, schools, and hospitals spent hundreds of millions of dollars on LCD screens affected by the illegal conspiracy. My office is bringing this case to get those illegal overcharges back."
The lawsuit accuses top-level executives, including CEOs, of attending secret meetings on a quarterly, and sometimes monthly basis to set minimum prices, price targets and increases, and prices to be charged to specific manufacturers. Cuomo's lawsuit also accuses LCD makers of exchanging production information to control output, and coordinating messages to cover-up the entire scheme.
Defendants listed in the suit include AU Optronics, Chi Mei Corporation, CMO Japan, Hitachi, LG, Samsung, Sharp, and Toshiba.
Thirty-three states, including California, Florida, Massachusetts, New York, Pennsylvania, and others, will receive $173 million from six DRAM makers to settle a suit accusing them of fixing prices for products between 1998 and 2002. Companies named in the suit include Micron, NEC, Infineon, Hynix, Elpida, and Mosel Vitelic.
"These companies conspired in an illegal global scheme to fix prices on chips used in computer equipment sold to consumers, schools, and government offices," California Attorney General Edmund 'Jerry' Brown Jr. said in a statement. "The large price tag of this settlement should serve as a warning that we will crack down on any manufacturers around the world that choose to gouge consumers through illegal price-fixing schemes."
It is yet to be determined how much each company will pay towards the $173 million collective settlement, which is to be doled out over the course of two years plus interest to the affected consumers, schools, and government offices.
"The settlement money is welcome, but the illegal overcharging never should have happened in the first place," Brown added. "Especially when times are tight, schools and government agencies can't afford to be ripped off by companies that violate our anti-trust laws to keep profits high."
Following an extensive investigation into alleged price fixing violations, the European Commission found nine memory makers guilty of wrongdoing and fined them a collective $404 million.
The companies involved include Samsung, Infineon, Hynix, Elpida, NEC, Hitachi, Toshiba, Mitsubishi, and Nanya, all of which submitted settlements admitting their liability for infringement, according to reports. Micron would also have been included, but ultimately was not fined since it told the Commission about the cartel as far back as 2002.
"You may think that to use the word 'settlement' next to the word 'cartel' sounds quite strange," Almunia said. "So let me explain right away that we are not compromising on cartels, with or without a settlement. A cartel is the worst violation of competition rules since its object is to collude against the interests of other companies and of consumers."
Samsung received the biggest fine at $145.7 million, with Infineon receiving the second largest fine at $56.7 million. The cartel is said to have operated from July 1, 1998 and June 15, 2002.
Dell has launched yet another legal salvo in the ongoing war over LCD price fixing. This time those on the receiving end are Hitachi, Sharp, Toshiba, HannStar, and Seiko. Dell isn’t alone in this war, though. AT&T has an interest in LCD prices as every phone has at least one pricey screen. The cell carrier even went so far as to accuse LG, Samsung, and AU Optronics of price fixing last October. Just a month later, Nokia got involved as well.
Hitachi and Sharp in particular don’t appear to be fairing well. Last year the companies admitted to a LCD price fixing scheme and had to pay $585 million in damages. Some executives even ended up in jail over the matter. We’ll have to keep as eye on this one, as it could result in cheaper LCDs one day. Well, after everyone pays off their legal bills.
Who knows how much artificially inflated LCD panel pricing ended up costing consumers in the long run, but for Chi Mei Optoelectronics (CMO), the company's alleged involvement in the antitrust case brought on by the U.S. Department of Justice will cost it $220 million, the amount of the plea agreement.
Under terms of the agreement, CMO will pay the fine in installments over a period of five years. In addition to forking over $220 million, the panel maker has also agreed to cooperate with the DOJ's ongoing investigation
Allegations of price fixing in the LCD industry have received a fair amount of attention the past couple of years. In 2008, several LCD makers were charged with artificially inflating panel prices, which ultimately led to LG, Sharp, and Chungwa agreeing to plead guilty and pay a total of $585 million in fines. And more recently, Nokia called shenanigans on Samsung, LG, AU Optronics, and other LCD manufacturers, all of which Nokia is suing for allegedly colluding to fix prices.
The LCD price fixing shenanigans continue, at least according to Nokia, the world's largest mobile phone maker who has filed suit against Samsung, LG, AU Optronics, and other LCD manufacturers over allegedly colluding to fix prices, Bloomberg reports.
Filed on November 25, the lawsuit is based on both federal and state antitrust claims and makes essentially the same arguments as AT&T did last month when it filed a suit in the same court, also against LCD manufacturers. According to Nokia, Samsung and more than six other LCD makers conspired to raise the price of displays.
"The liquid-crystal displays were incorporated into Nokia mobile wireless handsets," according to the complaint. The conspiracy "artificially inflated the price of liquid crystal displays ultimately incorporated into LCD products purchased by Nokia, causing Nokia to pay higher prices."
Each of the suits direct the court's attention to a U.S. Justice Department investigation of display price fixing. Hitachi, who pleaded guilty in March in the inquiry, is one of the defendants named in Nokia's suit, but not AT&T's.
AT&T has a bone to pick with several big-name LCD makers, and it will do it in court. The telco has sued a number of display manufacturers over allegedly fixing the price of more than 300 million mobile LCD screens.
Those on the receiving end of the lawsuit include Samsung, LG Display, Optronics, Sharp, and Chungwa. According to the lawsuit, the display makers "formed an international cartel illegally to restrict competition in the United States in the market for LCD panels."
AT&T called the whole situation a "conspiracy," accusing the defendants of agreeing to eliminate competition and fix LCD panel prices that they knew would be incorporated in LCD products and sold in the U.S.
This isn't the first price fixing scandal to hit the LCD industry, nor is it the first time LG, Chunghwa, and Sharp have been tied to price fixing allegations. All three agreed to plead guilty to similar charges in November 2008 and to pay $585 million in criminal fines.
Japan-based electronics firm Hitachi Displays Ltd. has plead guilty to price fixing charges on the sale of LCD panels and has agreed to pay $31 million as part of its deal with the U.S. Justice Department.
"The case should send a strong message to multinational companies operating in the United States that when it comes to enforcing the U.S. antitrust laws we mean business," Acting Assistant Attorney General Scot Hammond said in a statement.
Hitachi, who admitted to fixing prices on screens sold to Dell for use in desktop monitors and notebook displays from 2001 to 2004, isn't the only display maker to be accused of price fixing. LG, Sharp, and Chungwha Picture Tubes all struck similar plea agreements last year, with LG having agreed to pay a $400 million fine for panels sold between 2001 and 2006. All tallied, the U.S. government will have garnered over $600 million in criminal fines from LCD price fixing.