3 Firms Confess To Fixing LCD Prices, Agree To Pay $585M Fine 417
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.
So how much did they make? (Score:5, Insightful)
Price drop (Score:5, Insightful)
"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.
Hmmmm (Score:5, Insightful)
Re:So how much did they make? (Score:5, Insightful)
...and how much are we the public going to see?
Re:Hmmmm (Score:2, Insightful)
Re:Hmmmm (Score:3, Insightful)
The attorneys.
Re:So how much did they make? (Score:5, Insightful)
Probably a gift coupon for a $8 mouse. And a lollypop if you are lucky.
Re:Prices won't drop; profit margins may rise slig (Score:2, Insightful)
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?
You really think they were absorbing the cost before? Still, I agree that any price drops will not exactly be through the floor.
No price drop for you! (Score:5, Insightful)
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.
Re:So how much did they make? (Score:4, Insightful)
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.
Re:So how much did they make? (Score:4, Insightful)
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:Hmmmm (Score:5, Insightful)
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:So how much did they make? (Score:5, Insightful)
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.
Re:So how much did they make? (Score:1, Insightful)
Consumers who purchased devices which used these screens paid more than a fair market price for the device. They were harmed.
Consumers who would have purchased the device at a fair market price but not at the actual price were denied the use of the device. They were also harmed. (Yes, yes, opportunity cost. That doesn't take away the fact of harm, though. At best it mitigates it.)
You could claim that the actual market price and the fair market price were the same and the price fixing "merely" cut into Apple's profits. But profits are reinvested in development which leads to new innovations and lower costs. Here consumers are also harmed. (Even in the extreme case where these profits were actually denied to investors in the form of lower dividends or reduced stock prices, consumers are still harmed because investors are then less likely to invest funds in the companies which used these screen.)
We can always claim consumers are not harmed if we refuse to follow the money back to the source (i.e., the consumer). That doesn't make it true, though.
Re:So how much did they make? (Score:1, Insightful)
WTF are you on about? We'll be PAYING the fucker! Their customers will be paying more and guess who they (Apple, Asus, BTC...) will pass *that* on to?
Sheesh, it's a stealth tax, ferchrissake.
Re:No price drop for you! (Score:3, Insightful)
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:So how much did they make? (Score:2, Insightful)
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.
Re:So how much did they make? (Score:4, Insightful)
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.
Re:No price drop for you! (Score:3, Insightful)
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.
Re:No price drop for you! (Score:2, Insightful)
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.
so how do you think they were able to fix the prices in the first place?
Parent is right on the money on this one. As there is no actual living person liable in corporations (only the corps assets themselves) mixed with the sole motivation of making money, decisions to act immorally or illegally become business decisions.
for instance illegal dumping of waste material: if the cost of dumping illegally combined with the risk of being caught and the approx. resulting fine are lower than the costs to dump waste properly and legally then any suit in their right mind would go the cheaper way.
without person liability, it all comes down to a simple "less than" equation.
here's a nice movie with more info on the subject: http://www.imdb.com/title/tt0379225/ [imdb.com]
Re:So how much did they make? (Score:2, Insightful)
Re:So how much did they make? (Score:5, Insightful)
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.
Re:Hmmmm (Score:3, Insightful)
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:Plasma? (Score:1, Insightful)
As to the "moar pixelz" complaint - You bought a crappy LCD monitor. You can get a good quality bright 20" or larger 1680x1050 monitor for $200. Hell most companies don't even MAKE CRTs larger than 17" these days. You know why? CRTs are inferior technology that have been surpassed.
Dead pixels? I have 3 LCD monitors of various sizes and a 42" LCD TV, no dead pixels on any of them. And on a TV if you can actually see a single pixel you either are watching TV through a rifle scope or are sitting way too close.
Re:Hmmmm (Score:3, Insightful)
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, government property is the same as private property owned by a corporation: it belongs to a group that invested in it. If your stance is, no one should own more than they are actually using, that I could agree with.
But I'm guessing you are just whining about the fact that the free market hasn't left you any pristine areas to exploit for free. Not my problem. If you want to live in civilization, you pay for it.
Re:Hmmmm (Score:4, Insightful)
I was responding to this quote, "That's why you shouldn't steal. The government hates competition!" which implies that taxation is equivalent to stealing. That is ludicrous, selfish, and anti-social. Taxation is equivalent to getting food in a restaurant, and paying for it afterwords. The 'Taxes are theft!' whiners want to dine and dash, they have already reaped the benefits of civilization but don't feel like they should pay.
I certainly don't always agree with what the government does with my money, but that still doesn't make taxation coercive. There are methods to change things that I don't like in government, and again, if you don't like the system you can drop out and not take part. Taxation is only coercive in libertarian fantasy land.
Re:Plasma? (Score:5, Insightful)
Heh. Somebody's obviously not doing any graphics work.
Re:So how much did they make? (Score:4, Insightful)
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:Plasma? (Score:3, Insightful)
The Invisible Hand (Score:5, Insightful)
Another magic trick of modern totalitarianism, passing as democracy through massive propaganda, is that you believe in things that simply don't exist - like the Invisible Hand of Adam Smith's imagining meaning something it does not. Here's the quote:
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
So the invisible hand was Adam Smith's belief that an Englishman would buy English products produced in England, or start a manufacturing company in England for English consumers.
However, this loyalty to one's country simply isn't implicit anymore, if it was, ever. Joseph Stiglitz, Nobel economist, states:
Whenever there are "externalities" - where the actions of an individual have impacts on others for which they do not pay or for which they are not compensated - markets will not work well. Some of the important instances have been long understood - environmental externalities. Markets, by themselves, will produce too much pollution. Markets, by themselves, will also produce too little basic research. (Remember, the government was responsible for financing most of the important scientific breakthroughs, including the internet and the first telegraph line, and most of the advances in bio-tech.)
But recent research has shown that these externalities are pervasive, whenever there is imperfect information or imperfect risk markets - that is always.
So, if you believe in a free market, globalization is very, very bad. GM is not failing because of the UAW (though they have many, many problems due to the UAW). GM is failing because it's being forced to compete with subsidized Japanese auto industry, and not receiving investment because of the inevitability of competing with Chinese automakers, which are a lot cheaper. Why? They can wreck their environment, exploit workers, and make unsafe products because China in many ways has a freer market than the US, if not a freer government. Why people are surprised that competition with third world countries wipes out entire manufacturing industries here at home, I'll never understand.
Repeat after me: I do not want a free market. I want a well regulated and competitive market that gives me the benefits of capitalist elements without wrecking the world in the process. I believe in liberty and equality and raising living standards for Americans, and trading with other nations so that they have the freedom to choose what they want to produce, not the "freedom" to sign up for another round of exploitation by Fortune 500 companies.
Anyway. There's good information on the Invisible Hand at the quite decent Wikipedia article [wikipedia.org], where I got my quotes from.
Re:Hmmmm (Score:3, Insightful)
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.
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.
If you have enough money to live out in the middle of nowhere I guarantee that someone can find you and demand some of that money. Someone will find you if through no other means you will need to buy provisions, if you're living in Alaska or Somalia self sufficiency will be a bit of an issue.
I don't disagree with your sentiment, I dislike the greedy "gotta keep their hands out of my pocket" libertarians as much as anyone and I more than agree with the point that the taxes we pay in western society taxes pay for the benefits those libertarians take for granted like roads, clean water, good sanitation and so on. I just don't think you're helping by making ill thought out suggestions.
I think libertarians need to spend some time in a less well regulated society, Going to many places in SE Asia and you will find places where governments don't care about providing clean (drinkable) water, good sanitation (no sewage treatments, storm drains directly connected to sewer mains) or decent road works let alone a medical system that rivals that of the US (I'm Australian, so heavy sarcasm implied). Of course you pay less "official" tax but the government is not watched and still finds ways to get money out of you. You end up paying "Tea Money" to local politicians so you can operate a legitimate business, more "Tea Money" to the cops so you don't get raided, unethical rental contracts (Key money) are commonplace and there is no protection against a supplier who decides to rip you off. Good market regulation controls corruption in government as well as business, if you remove regulation from one it will also slip away from the other.
CRTs for gaming? (Score:4, Insightful)
What about for gaming though? You're essentially capped at 60fps due to needing Vsync on LCD monitors to avoid massive shearing issues. Whereas a HQ CRT supports 100+hz.
The naked eye may not see more than 60fps, but there are definite fluidity gains still up to the 100-120fps range which LCDs can't match currently.
Re:Hmmmm (Score:3, Insightful)
Not making a judgment here, but noting your analogy is wrong. Taxation would be more like being forced food upon you (without you getting to choose what kind) and then being demanded you pay for it.
Re:Hmmmm (Score:3, Insightful)
Physical size (Score:3, Insightful)
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.)
Now their cost of business is increased (Score:3, Insightful)
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.
Re:So how much did they make? (Score:3, Insightful)
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.
Re:So how much did they make? (Score:3, Insightful)
As do many other things, such as asymmetric information. A prospective employee knows more about his potential value than the employer does. Therefore, employers must systematically undervalue labor. In a free market system, capital always has an advantage over labor. Besides the asymmetric information problem, the labor market is not a cost free market. Leaving a job and picking another one is not like choosing another brand of car. There is a cost involved with leaving a job without another one lined up, most people aren't free to just pick and choose jobs. Employers know this, and they treat people like serfs or expendable cogs because of it.
Monopolies, asymmetric information, and externalities are all known failure modes of the free market. The positive feedback created by the fact that money is power, and power makes money means that the rich will always get richer while the poor, at best, stay the same. With all the known problems that exist with the free market system, I don't understand why people argue against government, aka us, the public, regulating it.