Hitachi Fined $31 Million For LCD Price Fixing 135
MojoKid writes "The Japanese electronics manufacturer has
just agreed to pay a staggering $31 million fine for its role in a conspiracy to fix prices in the sale of TFT-LCD panels sold to Dell, Inc. The United States Department of Justice made the proclamation, and details show that Hitachi has plead guilty to a one-count felony.
The charge, which was filed in the U.S. District Court in San Francisco, blames Hitachi Displays Ltd., a subsidiary of Hitachi Ltd., with 'participating in a conspiracy to fix the prices of TFT-LCD sold to Dell for use in desktop monitors and notebook computers from April 1, 2001 through March 31, 2004.'"
Fixed which way? (Score:4, Interesting)
Not Smart (Score:0, Interesting)
So who's going to gaol?? (Score:4, Interesting)
See, that's where it's so unfair to treat companies as people. They get the benefits, but not the downsides. If *I* committed a felony I would go to gaol. A company gets a smack on the wrist and it is business as usual.
What we need is a gaol for companies. If a person has to lose "X" years of their life by being locked up, why not a company? Being in "gaol" might mean that the company is nationalised for the length of the sentence and all profits go to the government.
Re:Pay $31M, Made $300M (Score:3, Interesting)
Those jobs might not exist if the company hadn't been price fixing. Lack of significant consequences means a lack of significant laws.
Who gets the $31 million? (Score:3, Interesting)
I'd rather a profitable, productive company like Hitachi keep the money than the parasitic government.
Re:Staggering (Score:5, Interesting)
$25 billion in profits last year. Yep, that $31 million fine is staggering.
Citation please? According to http://investing.businessweek.com/businessweek/research/stocks/earnings/earnings.asp?symbol=6581.T [businessweek.com]
Hitachi's revenue for 2008 was 175B yen or $1.8B. Which is not even the net profit, it's the all monies coming in before expenses. This is no where near $25B in profit.
In fact they made a net profit of 1.5B yen or $129 Million for 2007. $31 million is almost a quarter of their profits for 2007. For 2008(3-08 to 3-09) they are posting a $7.8B loss.
http://retrenchment-blog.breaking.sg/2009/01/hitachi-cuts-7000-jobs-worldwide/ [breaking.sg]
Re:Who gets this $$? (Score:2, Interesting)
Those class-action lawsuits are totally bogus from the consumer's POV. Based on the notices I've received in the past, the outcome always seems to be
I'm happier just to have the company pay the fine to the government. This way, at least the lawyers won't get quite so obscenely rich in the process, although I'm sure some have already done handsome business in this case.
Seriously, I'd like to see some law passed regarding class action suits where the per-consumer reward is under $30. Give the money to the government instead, and cap the attorney fees at 15 pct.
Short list (Score:5, Interesting)
Does anyone know where I can find the short list of corporations that are not convicted felons?
It's odd the way that people who would never in a million years do business with an individual with a felony record (would you buy a house from someone convicted of fraud?) keep on sending their cash to three time loser corporations.
Re:How Much? (Score:3, Interesting)
Since we can't put a corporation in jail, I suggest instead that they spend the same amount of time forced to operate as a 501c non-profit organization.
Re:Not Smart (Score:5, Interesting)
You're right. When the economy is bad, we should let corporations get away with breaking any laws or regulations they want to in order to maintain a healthy profit, thereby maintaining jobs. This is especially important when the economy is bad in large part because we let corporations get away with breaking any laws or regulations they wanted to in order to maintain a healthy profit.
Siemens Paid $1.6 BILLION (Dr Evil Voice) (Score:3, Interesting)
I'd just like to add that to settle global bribery and corruption charges, Siemens recently agreed to pay $1.6 billion in fines [npr.org] - ~$900m to the US [usdoj.gov], and the rest to the EU. Now that's what I call "staggering [washingtonpost.com]".
Re:Pay $31M, Made $300M (Score:2, Interesting)
they didn't steal anything. They just structured "impressions" so Dell paid them more money than the market would have decided on.
Personally, I'm having a problem with all these foreign companies being sued for "collusion" years after the fact. Prices are consistently dropping, in fact they are dropping in many cases dangerously fast to the economy. The big problem in the electronics industry is that there is little adjusting to market demand after production is started. Companies pay their billions up front to make RAM chips or LCDs and they have to make that one model, for 6 months straight to hit their margins. When somebody decides they want to sell 17" in stead of 15", or Apple buys up pre-sales of chips, that causes one item to fall to "fire sale" levels and another to spike.
Companies like Dell and Apple pre-pay for the actual manufacturing run, not for the spot-prices. Some days they get a good deal, others they get stuck holding the bag. I think that's why OEM components are marked up so much because the OEM promised the sale price 3 months ago, not the "fire sale" price retail is charging right now. Knowing a little bit how the purchasing for these things work, it feels like the OEMs are pointing to the "fire sale" price of tech after 6 months and claiming they should have got that price up front and were "mislead". OEMs are not like Walmart, the only leverage they have on the market is to promise to buy up-front.
You and I typically buy on the "spot market" we buy ram/hard drives/CPUs that are left-overs from the OEM runs. That's why new ram is very expensive, then as the company fills orders but has a week left to run they "run out" the schedule until the time to build new parts, then the cycle repeats. If the cycle is off a week or two then prices go all over. If the fabs run an extra two weeks of parts, first the bills were paid by the OEM contracts say at $150 per panel, but if they run out the schedule the street value of the panel made the last week may only be $100 because they flooded the market, OEMs didn't take their orders, or the next model isn't ready yet.. the fab don't stop. It feels like the OEMs are saying that they were "overcharged" at $150 and that the fabs "knew" 6 months ahead the part would be worth much less when they were done with the run. That's not how electronic fabs work and with the increase in cases I don't think US courts "get" that fact. I also think they're favoring the "home team" and not the contracts.
Some other good reforms? (Score:2, Interesting)
Our legal system needs to recognize that legal persons have a significant advantage over legal persons in court. To level that playing field:
-- Make the 14th Amendment's guarantee of equal protection under the law inapplicable to corporations.
-- After that, you raise the burden of proof, on both liability and damages, when corporations sue individuals. In other words, make the RIAA prove up every last penny of its damages when it sues file sharers. By that I mean, make them produce evidence that every song downloaded equals a lost sale. Hint: There isn't any.
-- By contrast, when individuals sue corporations, you reduce the burden of proof. Upon a finding of liability, damages are presumed.
-- Extend the right to counsel to individuals being sued by corporations.
On another note, the government can use its buying power to significantly (and positively) influence corporate behaviour. In other words:
-- Want to do business with the government? Great. You agree to a long list of "good corporate citizen business practises" (easy union recognition, no outsourcing, a living wage, caps on executive pay and perks, firings only for just cause, a fully funded pension plan, etc.) and we'll THINK about doing business with you.
Re:Rights (Score:1, Interesting)
The "right to vote" part could easily be implemented by replacing it by "right to lobby and make donations". Should be quite effective, even if you limited it to 10 years or so.