Execs Get Jail time for LCD Price Fixing

By Geoff Duncan January 16, 2009

Execs Get Jail time for LCD Price Fixing

The U.S. Department of Justice has announced that four executives from LG Display Co. Ltd. and Chunghwa Picture Tubes Ltd. have agreed to plead guilty to charges they conspired to fix prices for TFT-LCD displays from late 2001 through mid-2006. And, in addition to paying criminal fines and helping the government with its investigation, all four execs will serve jail time. Terms range from six to nine months, with Chunghwa’s former chairman and CEO Chieng-Hon Lin, a Taiwanese and U.S. citizen, drawing the long straw with a nine-month sentence and a $50,000 fine.

"These cases involve the first Taiwanese nationals to face imprisonment in the United States for an antitrust offense," said Acting Assistant Attorney General for Antitrust Deborah A. Garza, in a statement. "The Department of Justice is committed to holding accountable all conspirators who harm American consumers, no matter where they live or where they commit the crime."

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The Justice Department charged the executives with being part of an ongoing conspiracy to fix prices for TFT-LCD displays, including holding meetings to pre-determine price points for TFT-LCD panels, issuing pricing quotes in accordance with those agreements, and exchanging sales data so they could mutually enforce and monitor adherence to the agreements. The execs also authorized, ordered, and consented to employees participating in their conspiracy.

The guilty pleas follow Sharp, LG, and Chunghwa pleading guilty to conspiring to fix LCD prices last November, which impacted the prices paid for LCD panels used by device makers like Dell, Motorola, and Apple. Chunghwa agreed to a $65 million, Sharp agreed to pay $120 million, and LG agreed to pay a whopping $400 million in penalties, which was the second-largest fine in the history of the DOJ’s antitrust division.

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And now it’s just Apple vs. D.O.J. over digital book price fixing

and now its just apple vs d o j over digital book price fixing what s the story ebook on ipad iphone

And then, there was one.
Holtzbrinck Publishers LLC, better known to readers in the United States as Macmillan, has become the fifth and final publisher to reach a settlement with the U.S. Department of Justice over the collusion to artificially set pricing for e-books.
Macmillan had been the sole remaining publisher in the lawsuit the D.O.J. had brought against Apple and the five largest publishers in the U.S. - Hachette, HarperCollins, and Simon & Schuster had all agreed to settle in April of last year, and Penguin following suit in December. The publishers had been accused of conspiring with each other and Apple to set the price of e-books on Apple's iBookstore at a higher level than Amazon.com's $9.99 baseline, a move that was in violation of federal anti-trust laws.
As part of the settlement, which will have to be approved by the court and is open to a 60-day period of public comment beforehand, Macmillan will be required to immediately lift any restrictions it had previously placed on the discounting of digital releases by retailers. It will also be legally restricted from entering into any new agreement with similar restrictions until December 2014 at the earliest. In addition, the publisher will be required to ask permission of the D.O.J. to enter into collaborations with other e-book publishers, as well as provide the department with regular reports as to any discussions with any other publisher as matter of course.
The terms of the settlement go further than simply reporting on discussions, however. "As a result of today’s settlement, Macmillan has agreed to immediately allow retailers to lower the prices consumers pay for Macmillan’s e-books," Jamillia Ferris, Chief of Staff and Counsel at the Department of Justice’s Antitrust Division, said in the official D.O.J. announcement, adding "Just as consumers are already paying lower prices for the e-book versions of many of Hachette’s, HarperCollins’ and Simon & Schuster’s new releases and best sellers, we expect the prices of many of Macmillan’s e-books will also decline."
Previous publishers who have settled on this matter have also put money towards a fund from which customers who bought e-books at the artificially-set price could receive some form of financial renumeration. Whether or not Macmillan will be adding money towards this purpose is not broached in the D.O.J. announcement.
With Macmillan settling, only Apple remains as a defendant in the upcoming court case over this issue; the company's trial is set to begin in June this year. The issue at hand is not whether the companies conspired to set prices, but whether the act of doing so was technically illegal. If Apple doesn't settle ahead of time, expect arguments as to why colluding over prices isn't actually illegal at all.
Image Credit: Flickr/shiftstigma

Music

Sony Music hackers avoid jail time in the U.K.

sony music hackers avoid jail time in the u k mj

Despite downloading nearly 8,000 files from Sony Music Entertainment's servers - including unreleased music from Michael Jackson, Beyonce, Elvis Presley and others - two British men have surprisingly avoided jail time in their sentencing following pleading guilty to hacking into the servers and illegally downloading the music files.
Fascinatingly enough, the two men - 27 year-old James Marks and 26 year-old James McCormick - have said that they initially broke into the systems seeking not unreleased music or even free music, but instead proof that some of the Michael Jackson songs that Sony had released following the singer's death actually featured a session singer impersonating the famed singer instead of the real thing. Originally, in fact, an attorney defending the two had claimed that it was the pair's love of Michael Jackson that meant that neither would have broken into Sony Music's servers at all, with Karen Todner telling Billboard Magazine in March of last year that the two "are eager to point out to Michael Jackson's fans and family that they would never do anything to harm the legacy that is Michael Jackson's music." In fact, she added, "As Michael Jackson has said, 'Lies run sprints but the truth runs marathons.'"
An unfortunate metaphor to use, considering that both men later admitted that, yes, they had actually used their home computers to hack into Sony's servers and download the music. Although, Marks maintains, he didn't download 7,900 files at all; he Tweeted this weekend "Please don't believe the press, or [the British Serious Organized Crime Agency] 7,900 files... wasn't it 49,000 last year? It's more like 300 files they added files from elsewhere." (At the time of the arrests of the pair, Sony Music refused to reveal how many files had been stolen during the break-in, with the figure being released by British authorities during legal proceedings later. It's possible that Marks is considering completed songs "files," as opposed to the authorities, which are referring to individual pieces of each track as one file.)
According to British authorities, the motive of Marks and McCormick was somewhat less altruistic than they would want you to believe, with chatlogs recovered from their computers after their arrest in May 2011 revealing that the two planned to share and sell the unreleased music. Gregor McGill, head of organized crime at the Crown Prosecution Service, said after the sentencing that "in simple terms, these men broke into a computer systems and took music files that were not theirs to take. That was criminal activity."
Following the guilty plea, both men received six month sentences, suspended for one year, with each additionally having to complete 100 hours of community service on top of their suspended sentence. Responding to the sentence, James Marks Tweeting that he had "mixed emotions" about it, adding that he was grateful to the Court "for being lenient," and that he apologized to Sony after "fully accept[ing that] I accessed the server."

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New York Times gets out of the answers game by selling About.com

new york times gets out of the answers game by selling about com

Some questions, you go to the Internet for the answer to. Others - Like, say, "What do I do with my high-cost, low-traffic crowdsourcing question and answer website, now that I've owned it for seven years and have millions of dollars' worth of buyer's remorse?" - you pretty much keep to yourself, especially if you already know the answer. In not entirely unrelated news, the New York Times is looking to offload its About.com subsidiary to Answers.com for a sum that's more than $100 million less than it originally paid for it.
According to a report on All Things D, Answers.com has signed a letter of intent to purchase About.com for $270 million, substantially lower than the $410 million that it had paid in February 2005, when it beat out bidders like Google, Yahoo! and AOL to purchase the business from its previous owners, Primedia. The sale is far from complete, with Answers.com apparently needing to reach out to partners in order to line up financing, but following the All Things D report, the Times confirmed the story with a statement that read that "it is engaged in discussions regarding the potential sale of its About Group," adding that "No definitive agreement has been reached. The negotiations are ongoing and there can be no assurances that an agreement will be reached or that a transaction will be completed."
About.com has constantly underperformed since the NYT purchase seven years ago, with CEO Cella Irvine stepping down as a result of the site's underperformance last year. Revenue has continually fallen for the site, with last quarter's results down 8.7 percent to $25.4 million and an operating loss of $186.8 million. Last month, it was revealed that the Times had taken a $194.7 million write-down on the property, a move that wiped out financial gains elsewhere in the company and led to net loss of around $88.1 million for the second quarter of the year.
The sales discussions may not be solely down to the site's amazing ability to lose money, however; the Guardian points out that the New York Times has been quietly selling off peripheral assets for some time and seeking to refocus itself on its core business and the NYT brand; the company has already divested itself of both regional newspaper publisher Regional Media Group, and also sold its holdings in the Fenway Sports Group in the last year alone.
If there's an upside to this experience for the New York Times, it may be this; they weren't the only ones to take a bath on About.com. While the NYT did pay $410 million to buy the site in 2005, that was still $280 million less than what Primedia had paid when it purchased the property in the year 2000. At this rate, we can expect Answers.com to be selling About for around $200 million or so at some point in the next six years.