LG and Sharp guilty of LCD panel price fixing

Davey Winder
Thursday, 13 November 2008 16:46

IT Policy - Regulation

How much did you pay for your last notebook, mobile phone or iPod? The correct answer is likely to be more than you should have done. An announcement by the US Department of Justice has revealed price fixing on LCD panels by some of the biggest manufacturers in the world.

The US Department of Justice is determined to crack down on international cartels, and that has got be a good thing for consumers the world over. Especially if it means breaking up price-fixing rings such as that which appears to have been operating in the realm of the LCD panel.

You might not have heard of Chunghwa Picture Tubes, a Taiwanese manufacturer of LCD panels, but I'm guessing the names of LG and Sharp are a little more familiar?

All three companies are said to have worked together to fix prices of the thin-film transistor LCD panels which they supplied to Apple, Dell and Motorola. As a consequence, this could have artificially raised the cost of your iPod, mobile phone or notebook computer.

The Antitrust Division of the US Department of Justice, which investigated the cartel, certainly thinks so. It has levied the second largest fine ever on LG as a result, and to give a clear warning to others involved in similar dodgy dealings.

It has slapped a huge fine of USD $400 million on LG, USD $120 million on Sharp and USD $65 million on Chunghwa for conspiring to fix prices for panels sold to Apple, Dell and Motorola. Price fixing meetings were said to have taken place over a five year period between 2001 and 2006.

The Assistant Attorney General in charge of the Antitrust investigation, Thomas O Barnett, has warned that further charges could follow as yet more companies are still being investigated.

In Japan, the Fair Trade Commission is also investigating price fixing within its own borders. South Korea is doing likewise.

Already, the stock markets have reacted to the news. LG Display dropped 11 percent on the Korea Exchange while Sharp lost 8.4 percent on the Tokyo Stock Exchange. Chunghwa hit an eight year low in Taipei falling by the maximum allowed on that particular exchange, 7 percent.

What chance a refund on my iPod to account for the price-fixing element? No, didn't think so...