LCD makers Sharp, LG and Chunghwa plead guilty: Price fixing

**Rush Limbaugh** · November 12, 2008, 06:48 PM

LCD makers Sharp, LG and Chunghwa plead guilty: Price fixing

Will this mean cheaper TVs and monitors?

WASHINGTON (CNN) -- Three major electronics manufacturers have agreed to plead guilty to a price-fixing conspiracy and pay $585 million in criminal fines for their roles in the pricing of LCD display panels, the Justice Department said Wednesday.

The department announced the plea agreement following a settlement with Sharp Corp. of Japan; LG Display Co. (LPL) of South Korea and Chunghwa Picture Tubes of Taiwan.

The plea deals were filed in U.S. District Court in San Francisco, California, and announced by Thomas Barnett, Assistant Attorney General for Antitrust at the Justice Department in Washington.

"These price-fixing conspiracies affected millions of American consumers who use computers, cell phones and numerous other household electronics every day," said Barnett. He declined to estimate losses stemming from the price fixing, but said he expected to provide some measure of the damages when the corporations are sentenced.

The Justice Department said LG Display Company, previously LG Philips, will pay by far the largest fine - $400 million, the second highest criminal fine ever imposed for price-fixing. The firm agreed to plead guilty to participating in a conspiracy from 2001 to 2006 to set the price of LCD panels worldwide.

Sneaky Asian Bastards

**fieldmarshal** · November 12, 2008, 06:50 PM

Why isn't Samsung up there?

**Lunar4** · November 12, 2008, 06:54 PM

Wow i knew something was up with LG. The screen on my Chocolate cell phone is busted and they refused to fix it. I looked online, and found that a ton of other peeps have the same ;problems with their LCD ;products. Glad they got busted.

**mrmouth** · November 12, 2008, 07:53 PM

Originally Posted by fieldmarshal

Why isn't Samsung up there?

"Absent from Wednesday's charges was any mention of Samsung Electronics Co. Ltd. (005930.SE), the world's largest LCD maker. The company confirmed in 2006 that it had received subpoenas from U.S. regulators in connection with the LCD probe.

Samsung said in a statement that it "has pledged its full and continuing cooperation" with the ongoing investigation. Barnett wouldn't comment on whether Samsung cooperated with investigators or received legal immunity in the investigation."

**HorseArcher** · November 12, 2008, 08:44 PM

So the price supposed to be cheaper?

Ok , i'm holding off on this for a while.

**danzig** · November 12, 2008, 10:14 PM

If price goes down much Im gonna cry since we just laid out for 52 inch for living room.

**Rush Limbaugh** · November 12, 2008, 10:20 PM

If price goes down much Im gonna cry since we just laid out for 52 inch for living room.

Who in the end do you think is going to pay this fine? Id say the prices will either go up or remain the same.

**Mithie** · November 13, 2008, 07:21 AM

Price fixing? Isn't that a legitimate tactic? An alliance between major manufacturers for the increased profits of all members?

If it's not - it should be.

**Carach** · November 13, 2008, 09:30 AM

Originally Posted by Mithie

Price fixing? Isn't that a legitimate tactic? An alliance between major manufacturers for the increased profits of all members?

If it's not - it should be.

why the hell are u supporting price fixing?

**Sphere** · November 13, 2008, 09:49 AM

Sounds like Samsung might have turned states evidence in return for immunity from the feds. I was just researching LCD TV's and its fairly obvious that the major brands were price fixing. First of all, there are several smaller brands that can produce good products at half the cost of the majors. Also Newegg has recently made some $300-$800 markdowns, which means they magically can cut 40% of the cost and not lose money.

And yes, price fixing is one of the most illegal things you can do in buisness law. It is basically creating a secret monopoly by ending competition in the market. It amounts to stealing from consumers, who expect to, and should pay a market set price for a good. If you allow price fixing in a capitalist economy, you lose the key "magic hand" of free markets and the whole point of the system. You might as well have socialized industry at that point, because it might be more efficient.

**Mithie** · November 13, 2008, 09:59 AM

Originally Posted by Carach

why the hell are u supporting price fixing?

Because I have a lot of stock in LG.

The rest of you peons can enjoy your overpriced monitors. Haw-haw!

**Ishoss** · November 13, 2008, 10:09 AM

Originally Posted by Mithie

Because I have a lot of stock in LG.

The rest of you peons can enjoy your overpriced monitors. Haw-haw!

Makes sense

**Ishoss** · November 13, 2008, 09:56 AM

Originally Posted by Mithie

Price fixing? Isn't that a legitimate tactic? An alliance between major manufacturers for the increased profits of all members?

If it's not - it should be.

That's bad for everyone, except for the sellers. It's not like it promotes competition and lower prices.

**Rush Limbaugh** · November 13, 2008, 09:58 AM

If you allow price fixing in a capitalist economy, you lose the key "magic hand" of free markets and the whole point of the system. You might as well have socialized industry at that point, because it might be more efficient.

Sounds a lot like the sub prime mortgage crisis. Government subsidies have the same effect.

**shadyrome** · November 13, 2008, 08:36 AM

Is this even worthy a thread:hmmm:

**JP226** · November 13, 2008, 09:59 AM

Price fixing is alot harder than it sounds. All the manufactures don't just get together and say let's charge this price. They can try to do that, certainly, but that's not always the outcome. When you price fix you usually you do it from a quantity perspective because a high price of tvs on the same inventory levels of tv's for these companies means alot of left over that gets destroyed. They have a back up in their inventory that can be costly. This happens because of primarily two forces, one being cross price elasticities where if pepsi costs too much I buy coke, if samsung costs too much I buy sharpe. The second force is the lack of income.

So they try to minimize the cross price substitutions by getting together and coming up with a quota that will keep the price where they want it to outweigh the losses of people not simple able to afford the tv's. Now imagine you are one of these companies and the goal is for you to maximize your profit, get the dividends to the shareholders, and you are seeing that everyone is charging a high price and that you could undercut them and charge lower and take all the business? It's a game in it's truest sense. You create a huge incentive to cheat the agreement with the other manufacturers. Now of course there are reprecussions and if you cheat the agreement then they fight back and compete price and profits downward. But then again if the quarter is all that matters or carries a disproportionate weight in importance to future quarters, does that matter?

Sounds like Samsung might have turned states evidence in return for immunity from the feds. I was just researching LCD TV's and its fairly obvious that the major brands were price fixing. First of all, there are several smaller brands that can produce good products at half the cost of the majors. Also Newegg has recently made some $300-$800 markdowns, which means they magically can cut 40% of the cost and not lose money.

That completely depends on their cost structures, it's not cheap to get a TV from japan to the US. I'm not justifying price fixing, I'm simply saying that just because Newegg can do it, doesn't mean everyone else can. There are things called economies of scale at play here.