$860 Million In Fines Handed Out For LCD Price-Fixing 151
eldavojohn writes "Six companies have pleaded guilty to worldwide price fixing of Thin-Film Transistor Liquid Crystal Displays from Sept. 14, 2001, to Dec. 1, 2006. For violating the Sherman Act, the companies have agreed to pay criminal fines of over $860 Million. In addition, nine executives have been charged in the scandal. The pricing scam affected some of the largest companies at the time, including Apple, HP and Dell. (If you bought a TFT-LCD from them in that time frame, you may be one of the victimized consumers.) From the DOJ release, 'According to the charge, Chi Mei carried out the conspiracy by agreeing during meetings, conversations and communications to charge prices of TFT-LCD panels at certain pre-determined levels and issuing price quotations in accordance with the agreements reached. As a part of the conspiracy, Chi Mei exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices.'"
ok what? (Score:2)
Re:ok what? (Score:5, Informative)
so what exactly happened? the article is long on confusion and short on explanations.
Someone got really greedy. Someone else caught them and is now going to use that fact to advance their political career. Some stockholders will suffer and a handful of executives will spend a few years in white collar resort prison.
Re:ok what? (Score:4, Funny)
Re:ok what? (Score:5, Insightful)
You forgot the part where the wronged consumers get justice in the form of a $2 class action settlement check.
YOU forgot the part where the wronged consumers get a coupon worth $2 off on their next purchase as their settlement.
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What's even worse are the cases where they get a free pass by paying the class action settlement, like the Google book deal. At least in a slightly less world you'd get your two dollar coupon but at least they'd have to stop any further infringements, not carry on breaking the law with the court's blessing. Current copyright laws are awful but one private company essentially ceasing it is even more awful.
Re:ok what? (Score:5, Informative)
This article is of course for the criminal action and not any civil suits. Naturally, there is a proposed class action in the US for those who were victimized:
http://www.lieffcabraser.com/antitrust/lcd-antitrust.htm [lieffcabraser.com]
The suit is for:
All persons and entities who, between January 1, 1996 and December 11, 2006, directly purchased a TFT-LCD Product in the United States from any defendant or any subsidiary or affiliate thereof, or any co-conspirator. Excluded from the Class are defendants, their parent companies, subsidiaries and affiliates, any co-conspirators, all governmental entities, and any judges or justices assigned to hear any aspect of this action.
From what it says the motion to dismiss based on lack of evidence has been thrown out. Will they settle? Will their lawyers eventually be able to squish it like a little bug? What will the payout be? That's anybody's guess. Might be worth getting on board if you were a firm that bought a ton of LCDs in that time though... I would imagine that if there was a payout, it would be per infraction rather than per customer, right? I admit that this is well outside my area of expertise.
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Yeah, and you forgot the part where the manufacturer tacks $2.20 onto the price to cover the $2 coupon.
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The coupon with an expiration date far before I'm interested in buying a new monitor.
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Which makes me think that they ought to rework how they figure the damages.
I think that 2 bucks is quite a bit less than the damages suffered per person.
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Someone got really greedy. Someone else caught them and is now going to use that fact to advance their political career. Some stockholders will suffer and a handful of executives will spend a few years in white collar resort prison.
You mean one with conjugal visits?
Re:ok what? (Score:5, Funny)
You mean one with conjugal visits?
Conjugal visits? Mmmm. Not that I know of. Y'know, minimum-security prison is no picnic. I have a client in there right now. He says the trick is: kick someone's ass the first day, or become someone's bitch. Then everything will be all right. W-Why do you ask, anyway?
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Did the companies that cheated still benefit from the cheating after the fines are paid? I'll bet that they did. Usually fines against corporations are actually a signal to keep right on doing wrong. Think Microsoft. How many huge fines have they paid? Yet it obviously has always paid off for them to violate the law.
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Re:ok what? (Score:5, Informative)
A little addendum: the final fine may vary from the stated amount. According to the document, the maximum fine may be increased to twice the amount illegally gained by the company or twice the amount of loss suffered by the victims. While 860 million USD seems a bit low, I expect the final number to be higher. (Or the given number could be a sort of "plea bargain" amount. I'm not sure.)
Re:ok what? (Score:5, Insightful)
Well let's see. The Taiwanese LCD producer Chi Mei Optoelectronics (CMO) agreed to pay $220 million for violations over 5 years (2001-2006) which comes up to $44 million per year of violations.
CMO is a publicly traded company, for 2009 their net sales up to November has been almost $30 billion dollars [cmo.com.tw].
CMO's market cap [reuters.com] is $150 billion dollars.
I think it's safe to say that $44 million dollars a year is a drop in the bucket for them.
The other $640 million is divided across 5 other companies so far, which sets them about $128 million dollars each, or $25.6 million dollars a year.
Justice is served!
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And the price is right. For some at least.
Re:ok what? (Score:5, Informative)
*150 billion new Taiwan dollards equals about 4 billion dollars
http://en.wikipedia.org/wiki/New_Taiwan_dollar
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something about being held at gun point to buy an LCD monitor against your will or something like that.
Re:ok -- so where's my rebate? (Score:2)
Screw the what and whyfor -- where do we who bought monitors during that period get our refunds...I assume the DOJ will be distributing the fines to those in in the affected class, I mean they are our government and they were representing us, right?
-;
Cut a deal (Score:2, Funny)
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Deal! A resolution of 2x4 is fine right?
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Good response time is easy.
Yes, it's simply a matter of lying about it on the specification list. 5ms my ass. [anandtech.com]
Say it ain't so (Score:3, Insightful)
Corporations doing shyster deals to gain profits for share holders while braking laws and shafting the consumers? Good god whats next, corporation changing laws to punish consumers for using products in ways there were not designed to be used?
Hey hey there kid. That baseball is designed to be hit with our authorized bats. Using any unauthorized bat is prohibited and will be enforced by our "Good Consumer Police"
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Well, Congress is moving towards banning the production of incandescent light bulbs in favor of compact flourescent bulbs (and LED bulbs, but they're a bit further away from practicality). Indeed, whatever will be next?
Victimized consumers may contact the DOJ... (Score:1, Funny)
...if they wish to receive a tiny American flag pin*
*shipping and handling charges may apply.
I just wonder (Score:3, Interesting)
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Oil. But of course there the conspirators are governments, so it's ok.
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Well, let's see, in the US, officially-government-sanctioned price-fixing oligopolies include oranges, almonds, cranberries, and raisins. Then of course there is anything covered by a patent. Or any resource that is mined from government leases. And then there's other industries that supply the military, such as airplanes, car companies, steel and weapons manufacturers, which are all protected and subsidized. Then you have licensed trades, electricians, plumbers, construction workers, truck-drivers and
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Going out on a limb... DRAM chips, SSDs, Flash memory.
I for one find it odd that old 1gb PC2700 modules are still over $30. And the price seems to be the same no matter which manufacturer you look at.
Meanwhile 8gb compact flash cards, which are oh so more expensive to manufacture than SDRAM, are $30, that is unless you want "true" compact flash which faithfully implements the true IDE standard (I.E. to use them with an IDE-CF adapter, instead of in a digital camera)... those got rebadged as "Indust
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unless you want "true" compact flash which faithfully implements the true IDE standard (I.E. to use them with an IDE-CF adapter, instead of in a digital camera)... those got rebadged as "Industrial CF" and cost like $200.
I use the $20 CF cards I find on e-bay with an IDE adapter. You might have to manually set the BIOS to recognize them, but other than that they seem to work fine.
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I for one find it odd that old 1gb PC2700 modules are still over $30. And the price seems to be the same no matter which manufacturer you look at.
That probably would be because nobody manufactures 1GB PC2700 modules anymore.
Low demand -> lower supply -> even higher cost.
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There are nearly as many computers in the real world using SDRAM and DDR SDRAM as there are using computers using DDR2 or DDR3.
They are also owned by people/companies that would rather buy a new system instead of adding more RAM.
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It's all political spin.
If all prices are the same then it's collusion and price fixing
If one company has a higher price then they're gouging
If one company lowers their price then they're undercutting
You really can't win.
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Actually, you can...if you're a politician.
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Yay for ridiculous over simplification of the economics.
This is painfully simple to understand yet you seem to believe they're just magical terms to take away corporations' god given right to fleece every penny out of the community.
Undercutting: A company spends $200 on parts and labor, sells the product for $150; or they can employ people for minimum wage and sacrifice quality standards to actually make that price sustainable. If all the other competitors can't beat that price without sacrificing quality o
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Undercutting: A company spends $200 on parts and labor, sells the product for $150; or they can employ people for minimum wage and sacrifice quality standards to actually make that price sustainable. If all the other competitors can't beat that price without sacrificing quality or features then they have been undercut. [This term is somewhat nebulous as it can be abused as an emotive response]
We're losing $50 on each sell but we'll make up for it in volume!!! good plan. Don't think that company is going t
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Ugh (Score:1)
Summary worthless as usual. A conspiracy usually requires more than one conspirator. The company mentioned in the linked press release doesn't even seem to produce LCD screens. What are the real companies involved that I might actually care about?
In fact, that's an interesting topic of criminal law. "Conspiracy" by itself is a "group" crime (price-fixing especially). Multiple people must work together for a crime to have even occurred. One party cannot conspire by itself. We would call that "thought
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You think a single company can fix industry prices acting by itself?
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They can if they hold a monopoly or near monopoly on their service or good, hence why we have protections in place against monopolies abusing their position.
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However, you can definitely be charged and found guilty of conspiring, even if 'other alleged parties' to the conspiracy have not yet been charged, or are still under investigation.
The companies involved will most likely all be overseas companies you don't care much about. Most of the manufacturers of the TFT screens are overseas.
The companies the average US person has heard of (such as Dell, HP, etc) who sell monitors, are OEMs. That is, the manufacturers (such as the ones who do the price fixing) s
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However, you can definitely be charged and found guilty of conspiring, even if 'other alleged parties' to the conspiracy have not yet been charged, or are still under investigation.
So, even though the crime of conspiracy requires multiple people working together by definition, your assertion is that a single person can be convicted of conspiracy alone. The fact that others participated is just a foregone conclusion, without them having been charged and tried? Once you've convicted a single person of conspiracy, all the other alleged conspirators could just be summarily rounded up and incarcerated? Do the other alleged conspirators have the right to defend themselves against the cha
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So, even though the crime of conspiracy requires multiple people working together by definition, your assertion is that a single person can be convicted of conspiracy alone.
That's right. In fact, one can be convicted of conspiracy, even when the identity of the other conspirators is unknown to prosecutors, and even when the identity is unknown to the person charged.
You could be convicted of conspiracy if you reached an agreement to commit a crime with an Anonymous coward on slashdot. Also, no overt ac
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Chi Mei Optoelectronics is owned by Foxconn, who owns a ton of other stuff. They control a ton of manufacturing business and a lot of the electronic subassembly business.
Oh great (Score:5, Insightful)
Guess who is going to pay the $860 million. Don't look forward to cheaper LCD prices anytime soon.
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Clearly they misplaced the zeros when determining the fine. $860 million is a small fraction of their ill-gotten gains.
The fine should be $860 billion. And the government can earmark the money to help pay for the bank bailout and stimulus plan in the recent past.
"price fixing" on an optional item? (Score:2)
There's a sucker born every minute, and a lawyer willing to take a fee for anything.
Seriously, how can you fix the price of something nobody has to buy? Sooner or later the price will come down to where it is a fair deal for the buyer.
I remember the first laptop I "wanted" was $4K USD. I didn't buy it, I didn't "need" it. The last laptop I bought was 10X better and only $400 USD, not even counting inflation. It was cheap enough to buy as a "toy".
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Unless of course you understand it, and you just don't agree with it... in which case you should probably make that more clear.
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While you may not agree with th
Cheaper than what? (Score:2)
LCDs are already dirt cheap. Displays now are cheaper than I've ever seen them with any technology. I remember getting a 17" CRT monitor in 1999, and not even a high grade one, for about $200. Now that gets you a 24" LCD. That's not inflation adjusted either, tack on another $50 if you want to look at it in terms of buying power.
I fail to see what you are complaining about here. They got nailed for doing something against the law, but it isn't as though we are all sitting here desperately needing lower disp
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Exactly. There is no use in fining corporations, as it only hurts their customers. The fines are nothing but a cash grab by the government, and the settlements benefit no one but the lawyers.
There need to be serious consequences for this type of thing. They should tear the responsible people limb from limb, literally.
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>>The fines are nothing but a cash grab by the government, and the settlements benefit no one but the lawyers.
Pshaw. I'm sure the government will use its $800m or so to locate all the people that bought LCD screens during this time period and give them all $50 refunds.
Note to conspiracy theorists... (Score:5, Funny)
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Big acrylic?
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The masons would just spike the plastics to slowly give off a cancer trigger and a nice electronic hum to keep the bottom 90% of the world in their place.
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"Wikipedia, the concept that persistent opinions represent facts"
Can you prove that idea wrong? There is no fact, just expected consistent observation (persistent opinion)
Re:Note to conspiracy theorists... (Score:5, Funny)
The CIA is only successful if you don't know they're involved. This was a pretty successful conspiracy, and therefore you can be sure that the CIA was indeed involved!
Clearly, you have a lot to learn about conspiracies.
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This is what real conspiracies look like. Note the distinct lack of "CIA", "Masons", "NSA" or other such favorites.
That's only because the illuminati killed their contacts in those organizations to hide the truth.
They are always doing this. Better way is to (Score:2, Interesting)
The better way to handle this is to drop the stupid ineffective fines and threaten that their products wont be allowed to sell in the USA.
Then they wouldn't even dare try to fix prices.
5 year ban.
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1) Subsidiaries
If you're smart enough to close that loophole,
2) Indirect sales (A sells to B who sells into the US)
Your only choices are to prevent the company from doing anything (impossible due to jurisdiction issues) and to block all imports (the economy can survive that for about a week).
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Can you imagine what would happen to prices if they did that?
First of all, in a conspiracy like this... the TFT part might no longer be available.. that would mean nobody could manufacture new monitors.
How do you feel about paying $10000 to get a 12" LCD display, due to all the main manufacturers' TFT screen material being banned?
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The better way to handle this is to drop the stupid ineffective fines and threaten that their products wont be allowed to sell in the USA.
Or maybe another company should have started up and underpriced them.
Savings (Score:2, Interesting)
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LCDs actually cost a buck oh-five.
--
Toro
Other co-conspirators will pay more? (Score:4, Interesting)
Victimized? (Score:2)
Re:Victimized? (Score:4, Insightful)
Yes, we were victimized. There's the cost of continuing to use CRTs, which was considerable. I bought my first LCD, a 1280x1024, several years ago, for $99 after a $70 rebate. And I waited for prices to go down like they do with every other consumer electronic item, and they didn't. I was baffled, but I kept waiting, knowing it had to give some time. That there was price fixing explains much. Was 2 years before I begin to see deals equivalent to the one I got.
Meantime, I paid for owning CRTs. They use more power. They took way more room in my car, forcing me to ship more of my possessions whenever I moved. I regret having paid UPS $85 to ship a 17" CRT back in 2003. I've learned a few things about moving. Best to sell your bulky possessions cheap if you can, or even abandon them if you can't. CRTs are definitely bulky. Had there been cheap LCDs in 2003, I could have saved quite a bit of money.
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They were denied the ability to get a cheaper one.
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Yes, price fixing is bad, but seriously "victimized" consumers? Yeah, they overpaid for an LCD, but they -chose- to pay that amount for an LCD.
You're missing some basic knowledge of economics here. The victims are not the consumers who actually overpaid for an LCD. The victims are the potential consumers who would have bought an LCD had they been fairly priced, but who couldn't afford to pay the inflated price. This category of "lost potential purchases" is known as "deadweight loss" in economics.
Unfortunately, our legal system provides no way for the true victimized class to receive compensation.
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There's a reason you can get old CRT monitors so cheap. No one wants those big clunky things.
hows the math work? (Score:2)
is 860M more or less than the excess profits taken by collusion on a worldwide sales scale, for 6 years.
I have a feeling they think it was worth it. This is why business will always risk it. We don't take whats really due. All of it.
You'd not believe how CHEAP it is... (Score:2)
Manufacturing a flat-screen, be it Plasma or LCD is so cheap - you probably wouldn't believe me if I told you.
But picture this:
Rewind a few years, remember when you paid 1000-3000 dollars for your 28 inch Sony Vega television set?
Today, you can grab a tv - 50 inches, way better than any projection screen or projector ever could be, for less than 800 dollars!
Back in the days, I couldn't even get a decent 26" incher for that price, why is even that possible today? Simple...look at the materials.
Your tv - is e
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Your tv - is essentially not much more than 2 glass plates with small cells with either gases or liquid crystals in them, and 2 plastic plates to cover it all, and then one graphics chip cpu-fpu-memory and all in one, plus a chip for digital tv-decoding and a tuner. These SMD components cost so little that you could buy a burger for what it actually cost to manufacture.
I imagine the machinery needed to assemble those small cells correctly and accurately is pretty expensive. However, I'd agree that the price isn't likely to drop once the capital costs of the manufacturing plant have been amortized.
Yeah, but the reject rate you know (Score:2)
Like CDs. They are _so_ much more expensive to produce than vinyl.
Which is to say, bad luck for the LCD manufacturers. The music industry did and does continue to get away with that scam.
Free market! (Score:2)
Good old free market, always making things better for the consumer!
The problem (Score:2)
I have personally seen threats of anti-competitive lawsuits used to limit competition.
Several companies come together to try to set a file standard for interoperation. A vendor to some of these companies threatens an anti-competitive lawsuit, after all they are meeting in a room discussing how to work together. The vendor was trying to maintain lock-in to its proprietary file format for its customers. The standard is stuck in limbo for years until the companies working on the standard can form a corporat
Re:Apple's Price Fixing (Score:4, Informative)
Re:Apple's Price Fixing (Score:4, Informative)
> By being involved with the price fixing...
Apple was one of the _victims_. The conspirators were some (all?) of the manufacurers who supply displays to Apple, Dell, and HP.
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Onto what ksemlerK said below me, that sounds fair as well, they s
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> If they were 'victims' as you claim then why do they have to pay?
Where does the article say anything about them having to pay?
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Are docs floating around the computer firms stating to just sign, we need the parts now, as the tech matures we can escape this BS, or was in more an inner clique that kept it going as they where the only ones who saw the docs?
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Is this at all related to Apple selling the same model Cinema Displays [macrumors.com] since April, 2007? 982 days without a refresh, following an average of 230.
Maybe, only because Apple is only able to sell displays based on demand but were paying prices on the supply side that were artificially higher than demand. If the price-fixing stops (and this is a good sign that it has or will), presumably there will be more profits for Apple, Dell, HP, etc in LCD displays and we may therefore look forward to refreshed product lines. Price fixing can have far-reaching consequences in a global market.
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How about turning out some new models that are a bleeding 4:3 aspect ratio, instead of 16:9? Nowadays it seems every LCD panel in the world is a repurposed HDTV unit. Those of us who lots of coding and document work tend to prefer monitors without a squished vertical aspect and a bunch of wasted horizontal space (especially considering 100% of the universe uses 8.5x11 or A4 paper that's taller than it is wide, and document design reflects this format).
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The Dell LCDs at my work can rotate to a long vertical orientation.
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The problem with that is that the TN panels (which almost every single one of the 16:9 panels are) have a terrible vertical viewing angle. When you rotate the screen then you end up with a very noticeable poor horizontal viewing angle.
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Bad idea (Score:2)
Bad idea. Fonts and antialiasing systems are designed for RGB subpixel orientation. Vertical RGB plays hell with text rendering.
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I still don't know what it is with this fixation of super wide ratios such as 16:9.
Supposedly, our field of view fits it better. But in reality, a square display would far better suit our visual system, where details can be discerned equally according to the distance from the direct line of view. For example, try reading a word while looking not directly at the word, but 2 or 5cm away. The text is just as hard to read whether you look 5cm below/above the word, or 5cm to the *left/right* of the word.
When I l
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Lol, that's classic :)
I now see their evil plan ;)
Real reason for wide screens (Score:2)
The unused horizontal space isn't wasted. It's obviously there to show you parts of your pretty scenic background (otherwise what would be the point of a background if it were covered with windows all the time?).
For example, as I compose this message on the middle third of my wide screen, I have a pretty ocean scene on the margins. Windows 7 makes it even better by changing it periodically. Ahhhh, so peaceful...
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Dell 2007FP. Decent (not great, but decent) monitor. 4x3 -- 1600x1200. Pivots to 1200x1600. Nice stand. Refurbished for $200 on Amazon.
/ Pivoted to portrait mode they also fit nicely at the of a 2560x1600 display
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No, the lawyers will get 100% of the actual cash that changes hands. The "victimized consumer class" will get some bullshit "settlement" like a voucher for $50 off the list price of the next monitor they buy from the companies that did this in the first place. Of course that will work out to a much higher price than you could buy it for without said voucher... so, in effect, you get dick.
Again.
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I've gotten cash before, though usually small amounts. Back in 2004 I got a check for $9 out of some sort of music-CD price-fixing settlement.
This particular case appears not to be a class-action suit at all, though; it's a criminal investigation that imposed a fine. So there is no settlement to distribute, since it's not a civil suit with plaintiffs.