Sharp, LG, and Chunghwa Admit Price Fixing

dell takes a slice at apple with super thin latitude z dellz closed

In a plea deal with a federal court in San Francisco, LCD manufacturers Chunghwa, LG and Sharp have agreed to plead guilty to conspiring to drive up the prices of LCD displays used in everything from computers and televisions to mobile phones and gaming devices. According to the U.S. Department of Justice, the companies engaged in communications to fix the prices of TF-LCD displays during periods ranging from early 2001 through the end of 2006. The companies allegedly held "crystal" meeting in which they set pre-determined prices for the displays and issued price quotes to manufacturers like Apple, Dell, and Motorola based on those meetings. The companies are also alleged to have exchanged sales information in oder to monitor and enforce their pricing agreements.

The three companies have agreed to plead guilty to violating the Sherman Antritrust Act. LG Electronics will pay some $400 million in penalties, the second-largest antitrust fine ever imposed on a company. Sharp has agreed to pay $120 million in penalties, while Chunghwa will pay a $65 million fine.

The Justice Department launched its investigation in the LCD market in 2006, and the investigation is still ongoing.

The price fixing scheme is alleged to have impacted popular products like Motorola’s Razr cellphones and Apple’s iPod music players, as well as notebook and desktop computers. The manufacturers apparently initiated their price fixing scheme in 2001 after a glut developed on the LCD market in the late 1990s, driving down panel costs to the point where manufacturers were starting to sell panels below cost. In August 2001, however, panel prices began to rise again, apparently as a result of price fixing schemes.