Regulatory Probe of LCD Market Widens

narramissic writes "Samsung Electronics Co. Ltd., Sharp Corp., Taiwan's AU Optronics Corp., and a U.S. subsidiary of Taiwan's Chi Mei Optoelectronics Corp. on Tuesday said they have been contacted by investigators who are looking into possible anticompetitive behavior in the flat-panel display market. This follows Monday's announcement by LG.Philips LCD Co. that it had been subpoenaed by regulators in the U.S., South Korea and Japan." From the article: "The probe centers on TFT (thin-film transistor) LCDs, according to Samsung. They are used in a wide range of electronics products including flat-panel televisions and computer monitors, laptop computers, cell phones and digital music players. The three companies being investigated are among the largest manufacturers of such displays. The investigation comes on the heels of anticompetition probes in the DRAM (dynamic RAM) and SRAM (static RAM) markets. The DRAM investigation focused on price-fixing, which is when vendors cooperate to set prices artificially."

Wow!

[FridayBob (619244)]

Good thing this kind of criminal behavior doesn't go on in the market for software!

Re:

[nine-times (778537)]

No, of course it doesn't. Haven't you heard, the free market regulates itself through supply and demand! It's impossible for anyone to charge more than their product is worth.

Re:

[Citizen of Earth (569446)]

A free market does an excellent job of supplying almost everything except a free market.

Don't blow a gasket.

[Kadin2048 (468275)]

This never seizes to amaze me.

You might want to put some oil on that ... I suggest a good synthetic blend for the winter.

Re:

[russotto (537200)]

There are practices (such as selling goods below cost, called "dumping" when foreign companies do it) which are legal for US companies that are not legal for non-US companies exporting their products to the US, so it isn't surprising that non-US companies get charged for such practices more often.

It's a double standard, but it's one which is set out in law.

Because the LCD plants cost billions

[bestinshow (985111)]

And yet LCD prices continue to collapse year-on-year whilst getting bigger, brighter and more contrastful (suck on that word, grammar nazis).

So what's bad for the consumer here? Companies still in business making a profit, or killing off all the companies until the one remaining LCD maker can charge the earth for them?

Yes, there is a fine line to tread between organised price fixing to pwn the consumer, and a free market where competition kills off choice, but things aren't black and white, good or bad.

Exactly

[brunes69 (86786)]

I mean, I am all for the consumer, and very anti-price fixing.

But shouldn't these guys be investing their time and resources into industries where price fixing is a REAL PROBLEM that affects the consumer?

I mean, LCD prices plummet month-over-month. An LCD today costs less than half what it cost only 2 years ago for the same size and even higher quality. I would like to see another industry (besides the CPU industry) match that kind of price drop.

What about stuff like high speed access? How come the cost of my high speed goes nowhere but UP, even though all the significant marginal costs (like laying cable + fibre, back-end infrastructure) were done YEARS ago? Why do I still have a bandwidth cap of 60 GB / month download when 100 GB of bandwidth costs essentially nothing nowadays (I can get a 10 TB web hosting plan for $5 a month) ?

The answer, of course, is there is no real competition, or reason for the major ISPs to reduce their prices.

The same can be said of lots of other industries as well. LCDs should be the LEAST of these guys worries.

Re:Exactly

[bestinshow (985111)]

But shouldn't these guys be investing their time and resources into industries where price fixing is a REAL PROBLEM that affects the consumer?

But LCD panels are made in Asia. Not America.

You wouldn't want to investigate a company that contributes to your political party now would you?

Re:

[lawpoop (604919)]

"But shouldn't these guys be investing their time and resources into industries where price fixing is a REAL PROBLEM that affects the consumer?"

I think they guys who would be investigating shenanigans in the cable and DSL world are the public utilities commissions, whereas price fixing in consumer goods is handled by other organizations. So they can't just drop this and start doing something else.

Econ 101

[mumblestheclown (569987)]

"even though all the significant marginal costs (like laying cable + fibre, back-end infrastructure"

Econ 101:

• You are referring to fixed costs, not marginal costs
• The whole point of fixed costs is that you risk a lot at the beginning to hopefully get a stream of rewards later.

The "there is no real competiton" excuse is whining amongst those who weren't clever enough to make the big investments earlier or can't make them now because of market forces. yes, this is tough for consumers, but that's the market - it goes to those who get in early. You only have a case to whine if your provider has a monopoly by law.

Re:Econ 101

[drinkypoo (153816)]

You only have a case to whine if your provider has a monopoly by law.

Uh, they do. The cable company has exclusive rights to lay underground cable along certain routes. The phone company generally has exclusive rights to their phone poles, which are provided by an arrangement with the city/county. You can't just go put up a bunch of phone poles and offer DSL.

On top of that, the FCC isn't exactly making it easy for people who want to provide wireless internet access to get spectrum. Granted, there's a fixed amount available, but the idea behind the FCC is that they are supposed to portion out the spectrum in the public interest. That means that if someone is ready and willing to provide the public a service that they want, they should get the spectrum. Instead the FuCC plays games with auctions and bullshit and helps media conglomerates extend their control.

Re:

[mumblestheclown (569987)]

The cable company has exclusive rights to lay underground cable along certain routes.

More likely than not, this exclusive right was granted to the cable company at a time when the public wanted ubiquitous cable TV and wanted it NOW NOW NOW even though the market wasnt going to support this, and the city dangled this exclusivity as a carrot for the cable company to make the necessary long term investment.

The phone company generally has exclusive rights to their phone poles, which are provided by an arra

Re:Econ 101

[drinkypoo (153816)]

Putting aside your juvenile ranting for a moment, you *do* realize that spectrum auctions are just about the best way to serve the public good? The reason is that because they are basically 'winners curse' type auctions - if you win, you probably overpaid. I'd sure as hell rather have some given piece of spectrum controlled by some company who is propping up my standard of living because it overpaid than for some amateurs to muck around

you are 100% incorrect. the only thing having the prices auctioned up into the stratosphere accomplishes is keeping the smaller providers from participating. it pretty much automatically ensures that one of the titans will get it, and we can see how responsive they are to our needs now.

And I'm not talking about amateurs, I'm talking about commercial providers.

Re:Econ 101

[planetmn (724378)]

The "there is no real competiton" excuse is whining amongst those who weren't clever enough to make the big investments earlier or can't make them now because of market forces.

You forgot one group: Those that weren't allowed to make the big investments earlier because of monopoly rights granted to the utility companies and other legislative barriers put up by the utility companies who were subsidized in order to make those big investments.

-dave

Re:

[Fulcrum of Evil (560260)]

Okay, who's got monopoly rights to LCDs?

Re:

[planetmn (724378)]

Nobody. The post I was replying to, was replying to a post about broadband internet monopolies.

-dave

PolySci 101

[Kadin2048 (468275)]

You only have a case to whine if your provider has a monopoly by law.

The real problem starts to occur when companies -- any companies, really -- start to interfere in the political process and win concessions for themselves. Large companies have taken to buying influence in politics and using it as a way to protect themselves from competition. This adversely affects and distorts the market, which needs to have barriers to entry that are as low as possible in order to produce the best outcome for consumers,

Re:Least Worries

[mpapet (761907)]

LCDs should be the LEAST of these guys worries.

First, you utterly fail to comprehend how corrupt most tech industries are. if it were possible to effectively quadruple the size of the agency doing this investigation, they would STILL never run out of tech importers that don't follow american business rules. I know this because I worked for an OEM.

Second, It's this attitude of looking the other way because the price is right TODAY that is the reason that economically, this country is headed for very hard t

Re:

[geekoid (135745)]

That's wierd, my price as constiantly been going down.
Now I pay 15 bucks a month.

Re:

[Thaelon (250687)]

I don't know how you can bring up other industries with price fixing problems and NOT mention oil/gasoline companies.

Funny how the war in Iraq was supposed to be so bad for the oil industry and they'd have to raise prices. Then what happened? They posted RECORD profits. Where's the accountability for that little bit of profiteering (I realize it's not the same as price fixing, but still)? The same goes for the hurricane Katrina...

Re:

[Psiren (6145)]

So what's bad for the consumer here? Companies still in business making a profit, or killing off all the companies until the one remaining LCD maker can charge the earth for them?

Or more to the point, not being pressured by competition to provide better products. Personally I'd rather have to pay a little more and have a choice of manufacturers, than pay less and get stuck with only one. I can't see how that would benefit consumers in the long run.

I disagree.

[by Anonymous Coward]

Personally I'd rather have to pay a little more and have a choice of manufacturers, than pay less and get stuck with only one.

You're in the very small minority. It has been proven time and time again, the American consumer wants the cheapest working shit that they can buy - and then throw it out when it fails.

Walmart's success, airline service, customer (no)service across all industries, etc... are some examples of this attitude - people voted with their money and this is what we have.

The exception to this

Re:I disagree.

[Psiren (6145)]

Glad I'm not an American consumer then. Or American, come to that.

Re:

[c_forq (924234)]

I don't think that is quite right: close, but not perfect. Americans want every product to have a range, and to get what you pay for. They want tools that get the job done, and if the job is their specialty then they want tools that are real nice. For a mechanic a $25 set of wrenches won't cut it, just like for a professional photographer a $200 LCD won't cut it. If you've ever gone shopping for a new range with someone that values their kitchen you know the cheapest option isn't the one you will be buy

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[rrhal (88665)]

And yet LCD prices continue to collapse year-on-year whilst getting bigger, brighter and more contrastful (suck on that word, grammar nazis).

I believe in would be most cromulent to say "... bigger and brighter while contrastiness enbiggens ..."

Re:

[geekoid (135745)]

Who said it was about price fixing? the article doesn't say that.

It could be about preventing others from entering the market.

Just because the price is going down doesn't mean there isn't price fixing.

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[hey! (33014)]

Presumably what is bad is that it is retarding the natural plummeting of LCD prices.

I just bought a $450 LCD monitor. Maybe that would have been $350 under full competition. Or maybe not, in fact probably not.

Most price fixing schemes are unstable (eg OPEC), unless the number of players is small. But whether or not the scheme is effective, it is still illegal. You don't want people saying, "Well, this scheme will fall apart in a year, but we can make a bunch more dough until it happens. By the time the

Re:

[MtViewGuy (197597)]

I'd like to know, too. You can get the Samsung SyncMaster 931B 19" LCD for around US$225, yet the 931B is VASTLY superior to 19" LCD's of just even a few years ago in almost every aspect.

LCD Production

[Velcroman98 (542642)]

Most of the actual LCD screen manufacturing is done by few companies (like LG and Philips), and mostly in South Korea. The other retail names you all know just slap them inside their plastic housing with their name on the front (like Dell or Sharpe). Similar to how many PC's have one of two brands of manufactured CPUs. The consolidated manufacturing could explain perceived anticompetitive behavior, that and the $2 Billion start-up costs for an LCD fab.

Re:

[MaWeiTao (908546)]

I feel compelled to add that Taiwan does at least as much LCD manufacturing as South Korea and Japan does it's fair share. The key companies are LG, Philips as you mention in addition to AU Optronics which is another huge player. They don't have their own brand, however, which is why no one ever thinks of them.

Sharp doesn't rebrand LCD displays produced by other manufacturers, not as far as I know. They design and manufacture their own LCDs and have produced some fairly innovative display technologies. The

CPUs may be a better point than you think.

[Kadin2048 (468275)]

Similar to how many PC's have one of two brands of manufactured CPUs.

I think this is the key issue. The situation with LCD displays ought to look like the situation with CPUs, but it doesn't.

With CPUs, competition between the two major players has created a price war and feature war, giving consumers more power for less money on a basically monthly basis. Billions of dollars of research have been spent trying to further the cycle of better, faster, cheaper (and recently, more efficiently).

I think that one o

Re:

[TheLink (130905)]

"as much competition as other high-tech sectors"

I wish there were even half that amount of competition and innovation in the furniture sector.

It's been bugging me for years that you can't get a good chair for a reasonable price (compared to the progress in the high tech sector). One with an adjustable back to seat angle, adjustable overall tilt angle and adjustable height from floor. With decent padding and shape so you don't get pressure sores, and it actually feels comfortable sitting in it.

I mean it take

Re:

[Emetophobe (878584)]

Most of the actual LCD screen manufacturing is done by few companies

Very true. For example, pretty much every 22" LCD panel is made by Chi Mei [anandtech.com] (in Taiwan). Samsung, Viewsonic, Benq, Acer, Asus, etc all use Chi Mei panels, the only real difference is the packaging and inputs. I happen to have a 22" Chi Mei, an Acer that I got for $400 Canadian a few months ago and I'm very happy with the quality so far.

It wouldn't surprise me

[simm1701 (835424)]

There seems a fair basis for these claims.

The PC LCD market has been notorious have having a "sweet spot" (the biggest screen you can buy before the prices jumps stupidly)

Right now its 1440*900 19" wide screens - for about 130GBP last time I looked - yet 20" 1680*1080 displays start around 350GBP and go through the roof from there (1500 for the rather nice dell/apple 30" widescreen displays)

Also LCD TVs have not even remotely kept pace with PC screen prices - they still seem to be at prices PC screens were 1-2 years ago for equivalent sizes.

The top end of hardware is usually more expsive - CPUs/GPUs/RAM - the top 1-2 models are never on the same price/performace curve as the rest of the product line, but LCDs really do seem to be extracting the urine.

I'd love to see a little leveling in the fields - especially since I really to want one of the 30" displays - preferably for about half the current price!

Re:It wouldn't surprise me

[ivan256 (17499)]

I just bought a 1920x1080 47" LCD for $1700. Those didn't even exist two years ago, and smaller ones cost 5x as much.

It seems to me that they're keeping pace...

Re:

[TheMeuge (645043)]

Is that the Westinghouse?

How are you liking it?

Re:

[ivan256 (17499)]

Yes.

It is unexpectedly good on the digital inputs (I've read people have problems with the input labeled DVI2. I haven't tried DVI2, but DVI1 and the HDMI input work well). DVI output from a GeForce 5900 at full resolution looks flawless. It also displays lower resolutions well over DVI. S-Video in looks terrible. The up-conversion results in a flickering grid of squares... It seems to blank half of the pixels in the alternate frame when de-interlacing. Again, that's only on the S-Video in. It only supports

Re:

[ivan256 (17499)]

That is a good point. You would figure that without a tuner you should be able to pick up a 19" LCD TV for around $250, and with a tuner for around $500...

There are some of those available though:

http://www.newegg.com/Product/Product.asp?Item=N82 E16889251010 [newegg.com]

Seems like there should be a lot more. The price of a 19" Aquos, for example, is practically criminal. The profit margin must be 150%.

If you're going to use a cable box, you may as well just buy a computer monitor.

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[Amouth (879122)]

the larger the screen the worse the yeild.. same thing with CPU's.. the larger the screen the more money you pay the better the quality has to be.. I know that if i got a 30in and even one pixel was bad they would be taking it back.. random mom/dad geta 17in and 1-2 green pixels they might not even notice..

the people that want the large screens know what they want and are picky.. the masses not so much.. so they have a worse yeild to sale ration for the larger screens on top of higher cost to manufa

Re:

[ceoyoyo (59147)]

Interesting... I bought a 22" wide screen LCD monitor a few months ago. It was about the same price as your 19"....

And the 22" was definitely the sweet spot. The price doubled for anything much larger.

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[ceoyoyo (59147)]

In Canada. Sorry.

I think mine was in the range of $300, which is in the same range as 130 pounds.

I know firsthand that things tend to be more expensive in the UK, but it's interesting that the sweet spot also seems to sit in a different place.

Re:

[Fulcrum of Evil (560260)]

Also LCD TVs have not even remotely kept pace with PC screen prices - they still seem to be at prices PC screens were 1-2 years ago for equivalent sizes.

Why would they? It's a different market.

Could someone explain this?

[8tim8 (623968)]

I can understand an investigation that specifically centers around sales in the US, but it sounds like this has an international side to it. I thought that US regulators couldn't do much internationally to cartels in industries like shipping, diamonds or oil (doesn't OPEC do this very thing by manipulating the availability of oil?).

Re:

[Rob the Bold (788862)]

I can understand an investigation that specifically centers around sales in the US, but it sounds like this has an international side to it. I thought that US regulators couldn't do much internationally . . .

From TFA:

Samsung Electronics Co. Ltd. said it had been served with subpoenas by regulators in the U.S., South Korea and Japan, while Sharp Corp. and Taiwan's AU Optronics Corp. were contacted by the Japan Fair Trade Commission and the U.S. Department of Justice (DOJ), they said. Taiwan's Chi Mei Optoe

TFA is light on the details

[TubeSteak (669689)]

This seems to be the only bit of speculation that I found through Google News:
http://news.com.com/LCD+price-fixing+investigation +grows/2100-1047_3-6142839.html [com.com]

Analysts said the investigation may focus on actions from some years ago.

A news report from Korean wire service Yonhap speculated that the probe may zero in on suspicions of collusion during 2003-2004, when LCD makers had better control of the market.

"From what we have heard, the investigation may be stemming from a situation two or three years ago w

Bring it on

[Fist! Of! Death! (1038822)]

I loathe the LCD Television - I want the LCD Wall - no - I want the LCD Room constructed purely of LCD Walls. No! more! price! fixing! swines!

The breaking point

[Rob T Firefly (844560)]

The TFT market suffers a shortage every time Xzibit pimps another ride.

Wonder if this means cheap 1080p.

[Viewsonic (584922)]

If you look around at 1080P lcd prices, you'll find they run around 2500-5000 from companies like Samsung, Sony, etc. Yet, then if you go look at brands like Westinghouse, you'll find the same LCDs for nearly $1500-2000 cheaper all around. Sure, the larger companies use better parts, but $2000 better? Yeah I don't think so. Maybe we'll see a nice $1500 drop across the board after this.

Re:

[friedmud (512466)]

Please do some research before spouting off your crap.

Samsung, Sharp and Sony are all more expensive than Westinghouse _for very good reasons_. There are very real differences in the technologies that drive the panels... even if they were to all use the same exact screens (which they don't) the tech driving the panels would still differentiate the low ball crap from the good stuff. It's just like if you buy the exact same LCD monitor and hook it up to two different video cards... sure you could hook it up

-1, redundant

[MustardMan (52102)]

In your haste to get a first post, you forgot to read the second half of the slashdot article summary, where they MENTIONED the dram price fixing fiasco. Way to be insightful there, bucko.