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)
Umm... "redundant" first post? (Score:1, Insightful)
A: Moderators mod down posters they don't like.
AC just guessing here.
How Much? (Score:5, Insightful)
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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.
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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.
I have a better idea, but one that requires a little setup. A corporation that hopes to get away with stuff like this should lose ALL patents and copyrights they currently own.
However we'd have to make sure there's no way for every company to just set up dummy holding corps for their patents that they'd then "license" back to themselves.
On the other hand, th
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A corporation that hopes to get away with stuff like this should lose ALL patents and copyrights they currently own. However we'd have to make sure there's no way for every company to just set up dummy holding corps for their patents that they'd then "license" back to themselves.
If you are going to write a law with enough teeth to remove their patents from their name, I suspect the law could also prohibit them from continuing to license any patents they currently license.
This still doesn't prevent them from hiding their patents in another company and not licensing them, but that exposes risks in case the other company becomes controlled by someone not friendly.
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Who said we can't? A corporation is a trust run by its board for its investors.
Put the board in prison or its Chairman.
That's what India and Russia do.
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Put the board in prison or its Chairman.
That's what India and Russia do.
Fucking shooting them doesn't even work, they've been doing it in China as long as they've had guns (they were just whacking people with sharp things before that) and corruption still runs at least as rampant there as anywhere else.
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True to an extent.
But once you publicly execute the guys, the message gets through, and the activity's reduced to a great extent or the guys go underground.
If they underground, then they are illegals.
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Why can't we put the compamy's decision makers (CEO, President, and board of directors) in prison?
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In some cases, we probably could, but in way too many cases, we'd end up punishing one individual person for the criminal acts of another or the trial process would become very difficult trying to determine who did or did not have personal knowledge of the crime (and if not, was it criminally negligent) and did they have sufficient authority to countermand the illegal orders.
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If you just gave a huge fine to the company, the company may go out of business and people could lose their jobs, so you would only end up hurting innocent people.
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Re:How Much? (Score:5, Informative)
They've also been hit with criminal fines of over $585 million.
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This seemed a bit high to me, and I think the $585M is the total amount charged to all conspiring companies to date:
http://www.tgdaily.com/content/view/41689/118/ [tgdaily.com]
$31M seems a little low but a) they plead guilty and b) they assisted in building the case against the other companies. Still, for a $70B (2006) market, even if they were a small player they seemed to have gotten off a bit easier than I'd expect.
Pay $31M, Made $300M (Score:5, Insightful)
Once again a corporation is allowed to steal and not pay back what it stole...
While an individual would have to pay every DIME back and then pay a penalty on TOP of that...
Pathetic
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Re:Pay $31M, Made $300M (Score:5, Insightful)
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Those jobs might not exist if the company hadn't been price fixing. Lack of significant consequences means a lack of significant laws.
Re:Pay $31M, Made $300M (Score:4, Insightful)
If the worst that can happen to our company is giving back what we stole, we're gonna do the naughty thing.
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Chance for monopoly means investors are willing to invest more of their money-->more R&D.
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Sounds like a broken window fallacy to me. All those jobs might not have existed if it weren't for the criminal behavior, so I don't understand the idea of just letting it go.
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It's not like the company and its valuable assets are burned out of spite. They'd be auctioned off to someone else - likely many employees could go day-to-day and barely notice this happen.
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Not so fast, compadre - according to TFA, some guys from Chunghwa were sentenced to jail time and indictments have been handed down to LG execs.
Lousy summary - Hitachi didn't price fix by themselves, they had (above named) partners.
It is beginning to look like fines are only part of the picture here.
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So I can steal $20,000 using my corporation and only have to pay back $5,000.
It works, Madoff is currently under house arrest...
In his 7 million dollar apartmen
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The best part, the new LCD screens will cost more because they have to cover "court costs." It's a lose-lose situation for consumers.
Unless that makes a competitor's product cost less than the Hitachi LCD...
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why to companies pay fines for felonies, while individuals have their lives ruined and serve jail time?
surely a corporation has enough individuals to at least put a couple behind bars for good effort?
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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 fron
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they didn't steal anything
Yes they did. From us. When they forced Dell to pay more for the LCD, Dell dutifully passed the increase onto us. Which means we wuz robbed. .48 Magnum...
In the wild west, this would have been solved with a Colt
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No.
I would shoot man who wuz charging me a much higher price because than i was willing to pay.
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What's gibberish is that people are willing to accept price gouging and illegal fee add-ons without the slightest protest.
Some people accept corporate overlordship easily.
I don't.
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How about auto makers and their precious "model years". They always seem to get earlier and earlier and they all seem to be announced every auto show when they all get together. Obviously, they are seeking to devalue automobiles every July 1 when they announce new models, right.
In fact this is just the logic people tried to use on the Apple iPhone being a "monopoly" but because they're a US company the US courts didn't fall for it. These companies are semi-state backed... so adjusting their schedules to ke
Agreed (Score:4, Insightful)
How come when companies break the law they get to "agree" on the punishment?
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Because the only other sensible thing to write is, "plans to file an appeal?"
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Never heard of plea bargains, huh?
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How come when companies break the law they get to "agree" on the punishment?
This is like asking "How come cows can fly?" They can't so the question is meaningless. In your case companies do not do anything, people within those companies do things. Because there are many people within a company many things can be done at the same time. Some times even at cross purposes.
In this case one person did the price fixing. Then later another person agreed to pay the fine. Almost certainly this was not the same
Only 31M? (Score:2)
That's hardly pocket change to a corporation like Hitachi.
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I agree, upon review my comment could be taken either way. Let me clarify. 31 Million is too little. They should have been fined MUCH more than that.
Staggering (Score:1, Insightful)
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]
Which Hitachi? (Score:5, Informative)
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This is slashdot, citations are only required for the important stuff like obscure vim macro commands to prove its superiority over emacs.
As Colbert would say, a tip of my hat for bringing some real figures into the discussion ;p
The problem with punishing a company as others have stated is it affects the average worker much more negatively than some exec who just lists it as a "failed strategy" (read: got caught) if they're questioned about it.
Sucks how most financial systems end up rewarding the wrong peop
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When you squeeze the nobility, it's the peasants who feel the pinch.
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You are correct, sort of.
25 billion likely was total revenue which doesn't include operating expenses.
From what I briefly googled it was more like 31 billion in 2008 (Feb 5th), and I thought it was about 110 million actual profit.
While 31 million would be about 1/4 of their profits for that year what the point is:
A) 80 million dollars is still a shit ton of money profit anyway, so keep doing it.
and
B) Do you think the 31 million was directed for one particular year. Put another way, do you think they priced
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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.
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Gaol?
Woah. Is this 1709 or 2009?
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Just because your colony resorted to spelling everything phonetically...
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Yeah - well you have the Welsh
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The New South Welshmen?
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Funny, I see the "jail" spelling on the BBC far more commonly than the "gaol" spelling. I take that as an indication that "jail" is now the preferred spelling in the UK as well. I've also noticed that "connexion" is dying out in favor of "connection." That said, I have a perverse romantic attachment to "connexion" and "gaol" as cool archaic spellings; they're excellent to use in some contexts, mainly for effect.
Re:So who's going to gaol?? (Score:4, Funny)
Using all caps is what you're *meant* to do when someone scores a gaol, silly flitter!
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Theoretically, any officer of the company who was complicit in the criminal behavior can be held criminally liable as an individual. For some reason, this doesn't always happen. What the hell does it mean to "convict" a company, anyway?
Scooter Libby would like to have a word with you.
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I'll concede that it's rare, but not so rare as to still be theoretical. And there's been a growing trend in sending top people to jail just lately, even before the financial crisis came down. I know Canada had a case just last year, in Quebec (appealed to the Supreme Court), where an executive (or maybe a director) was convicted over a workplace safety incident (but alas I don't remember the name of the case). It was, I believe, a first in Canada, but there are more in the courts, and I think there've bee
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Practically also its true.
Anyone committing a crime is a criminal.
No one can assault his in-laws and then claim his corporate policy made him do it.
Acting on behalf of someone is not a license to commit crimes and escape responsibility.
Contract Law states that when an Agent acts ultra-vires of his Licensor, then the Agent is individually responsible for such acts.
Jail the criminal, and convict him.
Period.
Unfortunately none of our lawmakers would allow such a thing to happen: especially Republicans like Orri
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I'd love to see a way to really punish corporations. Jailing their chief officers is a good start, but that usually only happens in the most egregious cases involving something that brings the company itself down. However, your idea to temporarily nationalize the company in order to punish it, while definitely giving the government incentive to enforce the laws, may be going a bit too far.
Considering the country is currently many trillions of dollars in debt, and adding almost 2 trillion more to that debt
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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.
Why the government? Why not the victims? Take the peanut butter company, it should get the death penalty, with its stockholders (actually it's one sociopathic rich ass bastard) losing all equity and all shares divided between the sick, and the dead's families.
In this case, Dell (and Hitachi's oth
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:Who gets the $31 million? (Score:4, Insightful)
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I'd rather a profitable, productive company like Hitachi keep the money than the parasitic government.
Yes, but that's because you think that if we adopted your feudal economic system again, you'd be a lord, not a serf.
That is to say, you are a moron.
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What Have The Romans Ever Done For Us? (Score:2)
I'd rather a profitable, productive company like Hitachi keep the money than the parasitic government.
Yes, what has "The Government" ever done for us? Well, except for the Internet you're using to demand a return to feudalism and the rule of nobles and strongmen, basically nothing!
Business as usual... (Score:1)
I don't really think that anything changes now that they were "caught". How many price-fixing slaps-on-the-wrists have we seen? Any company that does it just chalks up the fine to business costs, and continues.
Do I think anything will change? Nope. Ask yourself why they don't get caught while doing it. After the fact, it doesn't matter anymore.
Oh, and double bonus points to the article writer for using the word "plead", and not "pleaded".
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Who gets this $$? (Score:1)
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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
Rights (Score:5, Funny)
details show that Hitachi has plead guilty to a one-count felony.
Damn. Poor Hitachi. They just lost their right to vote and carry a gun.
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Totally off topic and not really that important but.... only 14 states ban convicted felons from ever voting again. Vermont and Maine even allow current prisoners to vote.
Just thought you might like to know, not all states ban felons from voting for life.
http://en.wikipedia.org/wiki/Voting_rights_in_the_United_States#Felons [wikipedia.org]
Why fine the company? (Score:1)
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.
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Exactly.
Banks maintain a record of convicted and bankrupt individuals and do not hire them.
Hell, if someone were to float a company and he's convicted of fraud or a felony, and he goes to bank to secure a loan for his company, he's refused!
Even though legally both of them are separate individuals!
Banks do maintain a central registry of such convicted felons.
Why can't we, citizens, maintain an open source registry of convicted corporations so that we actively prevent them from setting up shop in our town or
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You're entitled to your opinion, but one company practicing market fixing does more economic damage to society that a million acts of shoplifting. Perhaps when high school kids get caught shoplifting, we should let them keep the item, charge them 10% of it's cost and wag our fingers at them? I'm sure the threat of an instant 90% discount and all that finger wagging (in a private office, not in public of course) will be a powerful deterrent to further crime.
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You're entitled to your opinion, but one company practicing market fixing does more economic damage to society that a million acts of shoplifting.
How do you know? Shoplifters just take while market fixing is higher prices on something that someone wants and is willing to pay that extra bit for.
As I see it, market fixing signals to the rest of the economy that either the producers in question deserve more money than they were getting or that there's opportunity for new manufacturers. A market with few enough competitors to allow market fixing simply isn't very healthy.
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Market fixing maximizes the effects of the market's ill health and conspires to make it even less healthy (since the conspirators effectively become a single entity as far as market competition is concerned). An act of shoplifting causes a few hundred dollars worth of economic damage at most. An act of market fixing runs into the millions. Keep in mind that price fixing only happens in markets where the barriers to entry are high. Meanwhile, the price fixing creates malinvestment by convincing another playe
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Consider, as an outsider, I observer that the price of widgets seems stuck at around 150. I know I can produce them at a cost that allows me to sell for 110. I may conclude that apparently the other manufacturers can't figure out how to make them that cheaply, and go into business. Next day, magically the going rate for widgets is 109. That can only happen because the other manufacturers actually had a slightly lower production cost than me (perhaps because of volume) or because they have already recouped their initial investment. Either way, the price fixing created the illusion that neither was true and convinced me I could profitably enter the market. However, now that the illusion is broken, I'm left with no way to recoup my investment in a reasonable time. Meanwhile, I *could* have invested in something else with slightly lower expectations where the economy (and I) would have benefited more.
If you had done your homework, you'd already have a good idea how much it costs other manufacturers and would be prepared to tough out the dumping tactic.
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So you're saying price fixing is OK because industrial espionage is also OK? The consumer paying higher prices than would be necessary in a properly competitive market is OK?
I say espionage since in the real world, you can only gather so much information ethically and must infer the rest from such knowable figures as the price and approximate volume. Those inferences will be thrown off if price fixing is in play. To find out about price fixing, espionage or a criminal investigation will be required.
It sound
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So you're saying price fixing is OK because industrial espionage is also OK? The consumer paying higher prices than would be necessary in a properly competitive market is OK?
Yes, I am saying that.
I say espionage since in the real world, you can only gather so much information ethically and must infer the rest from such knowable figures as the price and approximate volume. Those inferences will be thrown off if price fixing is in play. To find out about price fixing, espionage or a criminal investigation will be required.
My view is that price fixing isn't that hard to figure out. The pricing behavior of the cartel members will be very similar. And in a world where price fixing isn't illegal, they probably wouldn't even bother to be secretive about it.
It sounds like you're trying to making a broken economic system "work" by re-defining it's results to be good rather than altering the system until the results actually are good.
This is an often successful way to deal with problems. Sometimes the problem isn't really a problem. Ignoring it is in those cases the better solution. IMHO, that's the case with price fixing.
In the scenario I presented there is no actual dumping, but the price fixing at the start makes the correction at the end have the same effect as dumping.
Eh, dumping, undercutting, whatever. It still remains that they'
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Eh, dumping, undercutting, whatever. It still remains that they're making $41 less per unit. And dropping the price of a good by 30% can only go on so long.
Actually, if the proce would have been 30% less without the collusion, then it CAN go on forever.
As for the rest, we'll have to agree to disagree. I strongly suspect that simply allowing such things will not only damage the economy but would damage the cohesiveness of society in general.
$31m Is Small, Not "Staggering" (Score:5, Informative)
In 2005, Samsung paid $300m for price fixing [usdoj.gov]. Hynix paid $185m. Infineon paid $160m, and four of its execs went to prison and paid $250,000 each.
In 2008, LG paid $400m in fines for price fixing [usdoj.gov]. Sharp paid $120m. Chunghwa paid $65m.
So... $35m. In this context, not very "staggering".
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]".
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So - when do I get a refund for the net effects on prices in the marketplace from their price-fixing?
Just goes to show (Score:2)
If it ain't broke, don't fix it.
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I say this every time I consider replacing my CRT with an LCD. I do sensitive color work, and I have still yet to see an expensive LCD that beats my 7-year-old tube.
Damn the flood of cheap, crappy TN-based LCDs crowding the market. I don't care about LCD price fixing -- I care about not being able to find a large, new CRT anywhere. Almost all CRTs you try to buy online are refurbished rather than NOS. The sellers often forget to write that in the product description.
Why not the corporate death penalty? (Score:1)
When people kill other people, we shoot, gas, behead, poison or fry them. When corporations do it, why do they always get by with "mistakes were made"? Why can't their charters be revoked and all of their assets and IP sold, for starters?
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Because there wouldn't be any large corporations left?
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 so
Shit (Score:2, Insightful)
Our legal system needs to recognize that legal persons have a significant advantage over legal persons in court.
Legal persons have a significant advantage over natural persons in court.
'Course, /. could add post revision functionality like every other web board has had for nearly a decade . . .
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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.
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The point of criminal punishment isn't just to get the criminal to stop doing the illegal deed, it's also a message to others to not do the illegal deed.
And if they go bankrupt, they go bankrupt. That would be even better - another company will come along and take their place, and they would think twice about price fixing. Let them get away with it and you might as well just legalize price fixing.
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