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3 Firms Confess To Fixing LCD Prices, Agree To Pay $585M Fine 417

Posted by timothy
from the win-friends-and-influence-people dept.
Oldyeller89 writes "LG, Sharp, and Chunghwa Picture Tubes pleaded guilty to charges of price fixing in violation of the Sherman Antitrust Act. They fixed the prices on LCD screens used not only in their products but also in other products such as Apple's iPods. The three companies agreed to pay $585 million in fines. Perhaps this will cause the price of our TVs to drop?" The New York Times also has a story on the outcome of this case.
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3 Firms Confess To Fixing LCD Prices, Agree To Pay $585M Fine

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  • Plasma? (Score:5, Interesting)

    by riceboy50 (631755) on Wednesday November 12, 2008 @04:39PM (#25739061)
    I wonder if the price to produce a plasma television is just inherently much higher than LCD if the already generally lower prices on those were being fixed in many cases.
    • Re: (Score:2, Interesting)

      by ergo98 (9391)

      I wonder if the price to produce a plasma television is just inherently much higher than LCD if the already generally lower prices on those were being fixed in many cases.

      Plasmas seem to have become a new sort of discount category, with large, low priced plasmas saturating the market (like 40+" for $700). The downside is that they're 1024x768 usually, and are usually off-brands. And the whole burn-in thing makes me completely put off plasma altogether.

      • Re: (Score:3, Informative)

        We have some LCDs in our test cells with burn in. LCDs aren't immune either. And these aren't some no name brands, these are Dell, relatively new LCDs. Now sometimes the data on the screen doesn't change for a few days, but that's no excuse for burn in.

        • Re:Plasma? (Score:5, Informative)

          by kimvette (919543) on Wednesday November 12, 2008 @07:27PM (#25741169) Homepage Journal

          It's not burn-in; it is image persistance and the display is not permanently damaged. How to fix it? Play a high-contrast full motion video for a few hours, or better yet, an animated image which turns all red pixels on then off (red then black), blue on then off (blue then black), then white (all pixels on) then black (all pixels off). Let each image display for at least a few seconds per.

          My first iPAQ (a Pocket PC) exhibited this from the start menu, and running a slide show resolved the issue.

          It's not burn-in. Burn-in is an actual evaporation (well, sublimation really) and/or burning of phosphors and cannot be corrected. Burn in "correction" on a plasma screen actually wears out the screen because those utilities are designed to burn in the rest of the screen to make the whole display more consistent.

    • by Hatta (162192)

      If they fixed LCD prices, they probably fixed plasma prices too.

  • by revlayle (964221) on Wednesday November 12, 2008 @04:39PM (#25739067) Homepage
    $585M in fines... so, how much did they profit before that?
    • by Rinisari (521266) * on Wednesday November 12, 2008 @04:44PM (#25739131) Homepage Journal

      ...and how much are we the public going to see?

      • by Daimanta (1140543) on Wednesday November 12, 2008 @04:49PM (#25739205) Journal

        Probably a gift coupon for a $8 mouse. And a lollypop if you are lucky.

      • by mabhatter654 (561290) on Wednesday November 12, 2008 @05:06PM (#25739451)

        actually their customers are Apple, and other product makers that paid a few bucks too much per panel and missed sales, not "consumers". So the public really doesn't see any of it as they paid the manufacturer and retailer of the product they bought a market price for the device.

        • by spun (1352) <`moc.oohay' `ta' `yranoituloverevol'> on Wednesday November 12, 2008 @05:11PM (#25739553) Journal

          It's nice how the free market automagically corrects any abuses of the free market. I mean here were a bunch of companies colluding to overcharge for a product, and yet, magically, no consumers were harmed. Yay magical free market, thy invisible hand protects and looks after us all.

          • by Anonymous Coward on Wednesday November 12, 2008 @05:25PM (#25739765)

            Except we're not in a free market. Republicans claim to be for a free market, but being pro established businesses does not a free market make. The patent system is also a big anti-free market force.

            Also, free markets don't magically remove all price fixing. It only removes price fixing if the barriers of entry are lower then the opportunities presented by the price fixing.

            And nobody has claimed free markets are perfect, just better then the alternatives.

            • by Kazoo the Clown (644526) on Wednesday November 12, 2008 @07:02PM (#25740893)

              And nobody has claimed free markets are perfect, just better then the alternatives.

              It seems to me that all these yahoos arguing to "don't regulate, just let the market sort it out," are saying it's perfect by implication.

              • Re: (Score:3, Insightful)

                by PapayaSF (721268)

                It seems to me that all these yahoos arguing to "don't regulate, just let the market sort it out," are saying it's perfect by implication.

                Not to speak for or defend all yahoos, but I think that argument is saying that letting the market sort it out usually works out better than regulation, not that anything is perfect.

          • by khallow (566160)
            Sure by providing incentives for competitors to enter the market. Now that incentive has gone away. :-(
            • Re: (Score:2, Insightful)

              by spun (1352)

              Riiiiight. Because so many new LCD factories opened up in the last few years to take advantage of the amazing opportunity presented by price fixing. The free market works incredibly well in theory. If only it worked so well in the real world.

              • by PitaBred (632671) <slashdot@@@pitabred...dyndns...org> on Wednesday November 12, 2008 @05:50PM (#25740083) Homepage

                The free market works perfectly with perfect information. As long as there's not perfect information, there's no perfect market, and a "free" market needs watching from time to time.

                • by spun (1352) <`moc.oohay' `ta' `yranoituloverevol'> on Wednesday November 12, 2008 @05:54PM (#25740155) Journal

                  Imbalance of information is only one of the three major failure modes of the free market. Externalities both positive and negative, and natural monopolies are the other two.

          • by xstonedogx (814876) <xstonedogx@gmail.com> on Wednesday November 12, 2008 @05:42PM (#25739963)

            Yes, because the GP's lame argument means ipso facto that he is accurately representing free market economics.

            Have you alerted the authorities to your blinding insight that oligarchies can temporarily fix prices even in a free market? No one has ever thought of that before.

            Please, keep beating that strawman. You almost have me convinced.

        • by Rary (566291) on Wednesday November 12, 2008 @05:14PM (#25739585)

          actually their customers are Apple, and other product makers that paid a few bucks too much per panel and missed sales, not "consumers". So the public really doesn't see any of it as they paid the manufacturer and retailer of the product they bought a market price for the device.

          A market price that was based, in part, on the cost of the materials which, it turns out, were overpriced due to illegal price fixing.

      • Re: (Score:3, Funny)

        by cjb658 (1235986)

        ...and how much are we the public going to see?

        $585 Million down, $699,415,000,000 to go...

        The bailout will be paid for before you know it!

  • Ya Know... (Score:5, Funny)

    by kellyb9 (954229) on Wednesday November 12, 2008 @04:40PM (#25739077)
    ... I'd expect this kind of BS from Sharp and LG but not from Chunghwa Picture Tubes.
  • Price drop (Score:5, Insightful)

    by Gavin Scott (15916) * on Wednesday November 12, 2008 @04:41PM (#25739087)

    "Perhaps this will cause the price of our TVs to drop?"

    Um, except that they just added $585,000,000.00 to their cost of production, sure.

    G.

    • Re: (Score:3, Interesting)

      by baffled (1034554)
      True that. The punishment should have been forfeiture of patent rights. Hit them where it hurts.
  • Hmmmm (Score:5, Insightful)

    by CannonballHead (842625) on Wednesday November 12, 2008 @04:41PM (#25739089)
    So since I paid them more money than I should have, do I get $30x#numberScreensBought out of this $585M fine? Who gets the fine money?
    • Re: (Score:2, Insightful)

      by BenSchuarmer (922752)
      U.S. Department of Justice is levying the fines, so the money goes to the US Government. The Government will use the money to help bail out banks.
      • Re: (Score:3, Funny)

        by megamerican (1073936)

        That's why you shouldn't steal. The government hates competition!

        • Re:Hmmmm (Score:5, Insightful)

          by spun (1352) <`moc.oohay' `ta' `yranoituloverevol'> on Wednesday November 12, 2008 @05:17PM (#25739607) Journal

          I like paying taxes. My tax money buys me civilization. I just hate freeloaders who want civilization without paying for it. If you don't like civilization, don't live in it. There is plenty of unclaimed land all over the world where you can live without paying taxes to anyone. Have fun!

          • Re: (Score:3, Insightful)

            by Unordained (262962) *

            Where's all this unclaimed land you speak of? Even Antarctica got sliced up like a huge frozen pie! Now, if you mean areas where no governmental (is that the same as civilization?) control is truly enforced, that's a different matter. (Somalia?)

            • Re: (Score:3, Insightful)

              by spun (1352)

              Somalia would be a great place for tax whiners to live. They could also live in Alaska out in the wilderness. Most of the word may be claimed, but it's not like it's being checked. All I care about is that said tax whiners do not get the benefits of things they didn't pay for. I don't care if there are actually any nice places for them to go live. What they do rather than being part of civilization isn't my problem, it's theirs.

              Surely you don't have a problem with people claiming all that land. I mean, gove

              • Re: (Score:3, Insightful)

                by mjwx (966435)
                There goes mod points.

                Somalia would be a great place for tax whiners to live.

                Right, nice one. No central governments to demand tax but you'll have to pay the local warlords (note: plural) simply not to kill you. Trading a tax on benifits for a tax on just living.

                They could also live in Alaska out in the wilderness.

                More great clear headed thinking, nothing a western tax department likes more than finding a tax cheat. You are still held to the laws of the land regardless.

                Most of the word may be claimed, but

          • call me uncivilized ... but i'm not a huge fan of turn based strategies
      • by wpiman (739077)
        Well: I suppose it is better than raising my taxes.
      • Re:Hmmmm (Score:5, Funny)

        by gfxguy (98788) on Wednesday November 12, 2008 @04:51PM (#25739229)

        U.S. Department of Justice is levying the fines, so the money goes to the US Government. The Government will use the money to help bail out banks. ... that have no liquidity because of all the people who ran up their credit cards buying LCD televisions on credit and can't pay it back.

    • Re: (Score:3, Interesting)

      by powerlord (28156)

      Since its a fine imposed by the Justice Department, I would imagine the government gets the money (in part to defray the expense of filing and prosecuting the case).

      Irony of irony, the advert displayed below the story was for the new Samsung HD TVs. :)

    • Re: (Score:3, Insightful)

      by nurb432 (527695)

      The attorneys.

    • Re:Hmmmm (Score:5, Funny)

      by greg_barton (5551) <greg_barton@ya[ ].com ['hoo' in gap]> on Wednesday November 12, 2008 @05:13PM (#25739567) Homepage Journal

      Who gets the fine money?

      AIG.

  • by colourmyeyes (1028804) on Wednesday November 12, 2008 @04:44PM (#25739123)
    The LCD's in question were not sold directly to consumers, they were in devices like cell phones and ipods. The cost was absorbed by the manufacturers of these devices, and if it drops, good for them... but do you really think they'll pass that directly on to consumers? The illegal markup per unit probably isn't all that big. This will amount to a small increase in the profit margins of the device manufacturers, if it amounts to anything at all.
  • That's a pretty brazen FU to their consumers and to the law. I can't believe they got away with it for 5 years. What are the chances that $585M is going to find its way back to the consumers that were taken advantage of?

    • by rob1980 (941751)
      Probably none, unless the retail price drops as a result and you happen to be in the market for a new {item_containing_LCD_screen}.
  • Lol... (Score:3, Interesting)

    by ZekoMal (1404259) on Wednesday November 12, 2008 @04:45PM (#25739139)
    And so, now that we have found out they have fixed prices, we can all feel free to sit with thumbs up our asses about the jacked prices we had to pay to feed companies that agree to pay a fine that is higher than the average amount of money 5 families make in a lifetime.

    And $50 says the CEO's won't be taking a dip in their salaries to compensate for the fine; nope, chances are they'll lay off some people and give pay cuts out to everyone that just does their job without trying to find a way to make a quick buck.
    • "And $50 says the CEO's won't be taking a dip in their salaries to compensate for the fine; nope, chances are they'll lay off some people and give pay cuts out to everyone that just does their job without trying to find a way to make a quick buck."

      Ahhh. I can tell that you must NOT be new here...I'd say your $50 will continue to be safe and warm in your pocket.

  • 32" tv's just won't fall through the $500 floor, you could easily get a CRT of that size for under half that price and there was significantly more material involved in making the CRT (though admittedly less process).
  • I'm guessing that the people who bought laptops etc. with all those overpriced screens in them won't see a dime of it. Just a guess though.

  • "Perhaps this will cause the price of our TVs to drop?""

    I don't know if you're aware of this but the prices on LCDs have been dropping?

    • by zxnos (813588)

      yeah, i was hit on the head by an lcd price drop just the other day. i am going to carry an umbrella here on out.

  • by jvkjvk (102057) on Wednesday November 12, 2008 @05:00PM (#25739379)

    Perhaps this will cause the price of our TVs to drop?

    Perhaps instead they will factor this cost into their new products in attempt to recoup this lost $$.

    So the scenario is: Purchaser is hurt due to collusion and price fixing. Companies are caught. Purchaser is hurt due to fines.

    Fines are only a deterrent if they actually hurt the companies bottom lines. If they can make enough profit during the price fixing phase, and jack up enough prices during the penalty phase to more than offset the penalty there will continue to be massive collusion in such systems.

    • by Prof Dodecahedron (1233766) on Wednesday November 12, 2008 @05:17PM (#25739609)
      Maybe they should fine the board members instead, and disallow them from receiving bonuses/stock/pay increases for 5 or 10 years. You can't punish companies but you can punish people.
    • Re: (Score:3, Insightful)

      by evilviper (135110)

      Companies are caught. Purchaser is hurt due to fines.

      That would only be true if companies were complete monopolies and purchasers were FORCED to buy their products at a specific time... Neither is true.

      If Samsung and LG raise prices, their competitors will benefit, getting more sales, AND consumers will see that prices are a bit high, and opt not to buy a new device with an LCD screen.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      That doesn't make sense. The price fixing happens because the overcapacity in the market would otherwise cause the price to drop. If the market were willing to pay a higher price, then they would simply increase the price of their products. They wouldn't wait until they're fined and they wouldn't collude in the first place.

  • Now, they have to make up the cost of the fines. It'll take a while to amortize that out.

    (problem is, I'm not sure that I'm kidding).

  • Is this related? (Score:4, Interesting)

    by blair1q (305137) on Wednesday November 12, 2008 @05:09PM (#25739507) Journal

    Does this have anything to do with the ridiculous inability of the laptop LCD screen market to put out 1920x1080 screens?

    It's as though they're keeping the market for TV screens expensive by not allowing the format to bleed into laptop realm, wherupon cheap computers become high-quality televisions, killing the TV screen market.

    • Im typing this on a Dell D830 with a 1920x1080 17" screen on it.....
    • Re: (Score:3, Informative)

      by mikael (484)

      Maybe there is a limit on the clock speed? 1920 x 1080 x 50/60 Hz would give a clock speed in the range 103 MHz to 124.4 MHz, and a double-buffered 32-bit framebuffer of 16 MBytes.

    • Physical size (Score:3, Insightful)

      by tepples (727027)

      Does this have anything to do with the ridiculous inability of the laptop LCD screen market to put out 1920x1080 screens?

      As far as I can tell, the lack of 1080p-class LCDs in notebook computers has more to do with physical size than anything else. On a reasonably-sized laptop, you'd have to set your laptop on "huge fonts" in order to read text without squinting. Make it any bigger, and it's not a "laptop" as much as an iMac 24" with a fold-out keyboard. (But then I prefer netbooks anyway.)

  • More reason (Score:3, Interesting)

    by BigJClark (1226554) on Wednesday November 12, 2008 @06:22PM (#25740461)

    To shop more intelligently.

    I *JUST* swapped out my CRT monitor after 8 years of solid, reliable use. I picked up a used LCD screen from my company for dirt cheap. I was never a beta tester for slow response-rate, burned out pixels and shoddy construction LCD screens.

    I realize basic economics tells us, that there is a maximum profit point on the two line graph of units sold vs cost per unit, but dare I say they could have actually LOST money by charging too much, and forcing cheaper consumers out of the market.

    meh, their loss.
  • by Tjp($)pjT (266360) on Wednesday November 12, 2008 @10:31PM (#25742545)

    Perhaps this will cause the price of our TVs to drop?

    Or maybe the price will remain the same as they now have reduced revenue and an increased cost per unit of the fine divided over the number of LCDs shipped. And I have bought a bunch of LCDs over the years. Think I will see any benefit? Doubtful! But maybe there will be a slight reduction in cost a while out. Current prices have already significantly dropped since this lawsuit was entered into.

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