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MacRumors
Nov 12, 2008, 03:12 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com/2008/11/12/apple-affected-by-lcd-price-fixing-by-lg-sharp-chunghwa/)

CNet reports (http://news.cnet.com/8301-1001_3-10095219-92.html) that LG Display, Sharp, and Chunghwa Picture Tubes pled guilty to criminal charges for LCD price-fixing and agreed to pay $585 million in fines.The three companies worked in concert to set prices on thin-film transistor LCDs, which are used in computer monitors, notebooks, televisions, mobile phones, and various electronics, according to the antitrust unit of the Justice Department.The three LCD companies are reported to have held meetings about setting prices on LCD displays and agreed to charge predetermined prices to customers. Apple, Dell and Motorola were among the companies affected by this illegal price-fixing.

Based on the article, Apple was only affected between September 2005 and December 2006 when the company used Sharp's LCDs for the iPod's screen.

Article Link: Apple Affected by LCD Price Fixing by LG, Sharp, Chunghwa (http://www.macrumors.com/2008/11/12/apple-affected-by-lcd-price-fixing-by-lg-sharp-chunghwa/)



Mr Maui
Nov 12, 2008, 03:14 PM
Maybe Sharp will offer discounts on a new Macbook / Mackbook Pro to those they helped rip off. :D

OK, it's a dream, but ...

GoCubsGo
Nov 12, 2008, 03:15 PM
Maybe Sharp will offer discounts on a new Macbook / Mackbook Pro to those they helped rip off. :D

OK, it's a dream, but ...

Why? Apple still made a premium on the panels without a doubt. Overall, they make a premium on every computer. As far as Apple is concerned, it probably hurt them more because I seriously doubt they would have opted to drop prices even if the panels were less expensive.

SFStateStudent
Nov 12, 2008, 03:16 PM
So, LG, Chunghwa and Sharp pay to the big Kitty, and then we get scraps, right? $5 of free iTunes downloads or a replacement iPod for the overpriced one that I gave to my brother. Pretty certain "we won't see JACK"...:eek:

hiptobesquare
Nov 12, 2008, 03:19 PM
This is good for competition.

Without the fixed high price, EVERYONE who produces LCDs will get downward pressure. The same competitive downward pressure that tries to pull the prices of consumer goods lower, to chase more scarce demand right now. Funny how the free market works when allowed to, and not hindered by illegal private, or regulatory government price fixing forces. This market will likely respond pretty quickly, due to being relatively un-regulated by civil regulations. Fraud prosecution, as what happened here, is the proper way to handle these situations. Although the fines that the LCD companies have to pay merely go to a bloated government, not to some other good use.

As these companies start having to compete with each other, they will undercut prices, and add more features. This will bring the whole LCD market to that point, of either adding value, cutting price, or both.

Just in time for the rumored dive in prices for LCD HD televisions around black friday, and through the christmas season, where this sort of tech goods were rumored months ago to take a heavy price dive, in light of the economy, but also the digital change-over in February.

Shasterball
Nov 12, 2008, 03:30 PM
Wow, this is pretty big. Kind of hard for electronics producers to take a hit like that during these economic times.

guzhogi
Nov 12, 2008, 03:36 PM
Why? Apple still made a premium on the panels without a doubt. Overall, they make a premium on every computer. As far as Apple is concerned, it probably hurt them more because I seriously doubt they would have opted to drop prices even if the panels were less expensive.

Agreed, as I said before, I find that Apple is more interested in getting high margins rather getting high volume of sales. I've heard rumors (correct me if I'm wrong) that Apple doesn't have anything less than a 28% margin on its products. I'm not sure if that's 28% more than just the bill of materials or what (I'm no businessman). I'll admit, I'd understand putting jacking up the price to make up for labor/advertising/R&D costs, plus a small profit. But after awhile, I've got to ask, how much profit do these companies really need? To me, there's a difference between a fair profit, & too much profit. Where that lays, varies.

I'd like to know by how much they jacked up the price. I wonder what the cut off point is between a "fair profit" and criminal price-fixing.

sterlingindigo
Nov 12, 2008, 03:39 PM
...goes around.

DipDog3
Nov 12, 2008, 03:42 PM
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5F136 Safari/525.20)

maybe that LCD tv will drop in price now.

twoodcc
Nov 12, 2008, 03:46 PM
i'm just glad that they were caught, so this doesn't happen in the future. maybe we'll see cheaper displays soon?

miiles
Nov 12, 2008, 03:52 PM
Wow, I wonder whats next for the LCD market...

howie78
Nov 12, 2008, 03:52 PM
i'm just glad that they were caught, so this doesn't happen in the future. maybe we'll see cheaper displays soon?


Umm..not from apple.

broncopde
Nov 12, 2008, 03:56 PM
It seems that something like this only affects Apple's profits on those products during that time, not the customers, because Apple was gonna charge the same round $X49 or $X99 price on the iPods.

mkrishnan
Nov 12, 2008, 04:01 PM
What shocks me most about this is that Dell was actually overpaying for LCDs they use in displays... meaning that it would now be possible for Dell to deliver displays at even cheaper prices than the absurdly cheap prices they had before. Wowsers.

Michael CM1
Nov 12, 2008, 04:01 PM
If you had been looking at prices of LCD televisions over the past few years, this isn't shocking. I bought a 27" tube Toshiba television about 3 years ago for $250. Until very recently, a comparable-size LCD wasn't even close to that price. Probably about twice as much. Since most places don't seem to carry many, if any, tube televisions any more, you would think that the prices would've dropped a lot quicker. Maybe this is why.

Sounds like a good reason to not buy any products from Sharp or LG for a while. I'll stick with my Samsung goodies.

reallynotnick
Nov 12, 2008, 04:02 PM
Agreed, as I said before, I find that Apple is more interested in getting high margins rather getting high volume of sales. I've heard rumors (correct me if I'm wrong) that Apple doesn't have anything less than a 28% margin on its products. I'm not sure if that's 28% more than just the bill of materials or what (I'm no businessman). I'll admit, I'd understand putting jacking up the price to make up for labor/advertising/R&D costs, plus a small profit. But after awhile, I've got to ask, how much profit do these companies really need? To me, there's a difference between a fair profit, & too much profit. Where that lays, varies.

I'd like to know by how much they jacked up the price. I wonder what the cut off point is between a "fair profit" and criminal price-fixing.

Everything is fair profit as long as their are competitors, price fixing would be if all the competitors decided to be, well non competitive.

Really it looks like this really doesn't matter for Apple as it was just for a short period of time on iPod screens, but I guess you multiply that by all the iPods and their is a nice chunk of money. Oh well 2006 is long gone now, and this is not going to help iPods now get any cheaper or anything. Glad they were caught.

SolRayz
Nov 12, 2008, 04:04 PM
Price fixing I could care less about if they would atleast offer their customers quality goods. The MBP line has been afflicted by a flood of bad LCD panels, dead pixels, light leakage etc etc. My mid '07 MBP is on its fourth lcd replacement because of poor manufacturing and quality control.:rolleyes:

air-ick
Nov 12, 2008, 04:16 PM
Let the rebates begin!!

Oh, wait - it's Apple. Nevermind.:D

clyde2801
Nov 12, 2008, 04:18 PM
Great! Now Apple can make more money by sticking those crappy little screens in their Macbooks! I'm thrilled! :rolleyes:

BlueRevolution
Nov 12, 2008, 04:26 PM
This is good for competition.

Without the fixed high price, EVERYONE who produces LCDs will get downward pressure. The same competitive downward pressure that tries to pull the prices of consumer goods lower, to chase more scarce demand right now. Funny how the free market works when allowed to, and not hindered by illegal private, or regulatory government price fixing forces. This market will likely respond pretty quickly, due to being relatively un-regulated by civil regulations. Fraud prosecution, as what happened here, is the proper way to handle these situations. Although the fines that the LCD companies have to pay merely go to a bloated government, not to some other good use.

As these companies start having to compete with each other, they will undercut prices, and add more features. This will bring the whole LCD market to that point, of either adding value, cutting price, or both.

So, instead of price fixing, they'll start trying to undercut one another. Unfortunately, I was pretty sure the entire post was filled with hidden sarcasm until I got to the end. What will happen is that they'll do their level best to drive their competitors out of business, succeed, then fix prices again with nobody in a position to complain.

This is good for competition.

ryanwarsaw
Nov 12, 2008, 04:29 PM
It isn't like Apple will pass the savings on anyway. Even when SSD prices go down consumers don't see any difference from Apple.

zombitronic
Nov 12, 2008, 04:33 PM
This news comes out and their stocks are up in after hours. What gives?

Xavier
Nov 12, 2008, 04:36 PM
Shrug it off Apple.

lewchenko
Nov 12, 2008, 04:44 PM
This did not hurt apple. They still made their 30%+ Margins on the screens.

It did however hurt us... the people who were ripped off.

However, for all we know .. had the screens been cheaper in the first place, apple may well have made 40%+ margins instead.

So it sucks to be the customer no matter what.

lewchenko
Nov 12, 2008, 04:47 PM
This news comes out and their stocks are up in after hours. What gives?

Situations like this typically occur because the level of the fine was deemed smaller than expected, and thus the company has been less hit (so in effect has more capital than the analysts thought they would).. so confidence in them goes up a little and their stocks go up.

Stock prices often take into account events like this in advance. So their stock was probably depressed down somewhat awaiting the news. If the fine had been x2 as much, only then would the stocks have fallen as the fine would have been much more than expected.

mwickens
Nov 12, 2008, 04:47 PM
"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.

PeterQVenkman
Nov 12, 2008, 04:58 PM
I have a three year old LG TV. I want a rebate. ;)

gangzoom
Nov 12, 2008, 05:02 PM
This did not hurt apple. They still made their 30%+ Margins on the screens.

It did however hurt us... the people who were ripped off.

However, for all we know .. had the screens been cheaper in the first place, apple may well have made 40%+ margins instead.

So it sucks to be the customer no matter what.

Unless you can design/program/manufacture/market a MP3 player better than the ipod i wouldn't say Apple are ripping off its customers...as far as am aware Apple cannot actually force people to buy ipods over other MP3 players!

PeterQVenkman
Nov 12, 2008, 05:08 PM
"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.

So if all computer makers decide to price fix laptops, and make them start at $5000, and all towers start at $4000, you think that's OK? That wouldn't affect you negatively at all?

How about Cable and satellite providers deciding that all TV will cost $100/month or more? Who do you go to for a cheaper price? Over the air antennas?

how about cell phones? The cheapest contract you can get from any of the big providers is now pretty much $40 across the board (not counting the BS pay as you go plans).

When businesses do whatever they want with no regulation, you invariably get abuses of capitalism that result in problems for everybody. Hence our little economic crises. Companies rake in record profits for a while, and then they finally crest over what people can realistically pay for a service or product - it results people just giving up. Everyone stops buying and nobody can sell anything.

In other words, the economy grinds to a halt.

But you're right. Let companies do what they want, they have our best interests at heart, and not their profit margins, right? :D

funnyent
Nov 12, 2008, 05:09 PM
i'm just glad that they were caught, so this doesn't happen in the future. maybe we'll see cheaper displays soon?

Probably not, they will probably raise their prices now to cover for what they lost in the fine.

funnyent
Nov 12, 2008, 05:11 PM
Unless you can design/program/manufacture/market a MP3 player better than the ipod i wouldn't say Apple are ripping off its customers...as far as am aware Apple cannot actually force people to buy ipods over other MP3 players!

Yeah, we bought it and knew the price. Even if we knew we were paying more than we should, it is the best mp3 player! :apple:

ezekielrage_99
Nov 12, 2008, 05:19 PM
What shocks me most about this is that Dell was actually overpaying for LCDs they use in displays... meaning that it would now be possible for Dell to deliver displays at even cheaper prices than the absurdly cheap prices they had before. Wowsers.

I found that kind of surprising as well, cheaper LCDs couldn't be a bad thing right?

rockosmodurnlif
Nov 12, 2008, 05:23 PM
$585 billion? Alright, so only $115 billion left to go before the bailout is all paid for. Thank you price fixers. So that takes the taxpayers mostly off the hook right?

Man there's got to be some other industry to investigate and fine.

hiptobesquare
Nov 12, 2008, 05:24 PM
So, instead of price fixing, they'll start trying to undercut one another. Unfortunately, I was pretty sure the entire post was filled with hidden sarcasm until I got to the end. What will happen is that they'll do their level best to drive their competitors out of business, succeed, then fix prices again with nobody in a position to complain.

This is good for competition.

Do you have any idea how economics works?

Have you ever tried, and succeeded on putting your colleagues out of their jobs?

Do you think it is that easy?

They will try to compete for marketshare, but so does EVERYONE. Yet there are a LOT of companies still in the market...

IF you are efficient at doing your work, and your competitor is efficient at doing theirs, you might be able to make slight changes to add value or cut price, to compete. But you can't just give away your products while hoping that enough people flock to you to instantly put your competitor out of business. Even if that were to work, when you jack your prices sky high to recover your losses, and pay your debts, you will LOSE sales, and probably drive yourself out of business, too.

It is a bit of a tit-for-tat game, but companies don't just put each other out of business because they want to. Otherwise there would only be one corporation in existence, that does everything, and does it BADLY.

JoeG4
Nov 12, 2008, 05:25 PM
585 million, actually that's about 1/1400 of the 700 billion ;)

ChrisA
Nov 12, 2008, 05:26 PM
This did not hurt apple. They still made their 30%+ Margins on the screens.

It did not hurt Apple because Apple only bought the higher price screen for a one year period and then only for the iPod. iPod screens are only a few bucks each. We are not talking about a lot of money here, not in Apple's case.

IJ Reilly
Nov 12, 2008, 05:26 PM
"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.

Competition, bad. Collusion good!

You learn something new every day.

LostPacket
Nov 12, 2008, 05:46 PM
LCDs seem cheap to me, so if they were price fixing, they were probably doing it wrong. Someone should take a look at the wireless companies instead.

PeterQVenkman
Nov 12, 2008, 05:52 PM
LCDs seem cheap to me, so if they were price fixing, they were probably doing it wrong. Someone should take a look at the wireless companies instead.

Tell me about it!

http://www.verizonwireless.com:80/b2c/store/controller?item=planFirst&action=viewPlanList&sortOption=priceSort&typeId=1&subTypeId=19&catId=323


http://www.wireless.att.com/cell-phone-service/cell-phone-plans/individual-cell-phone-plans.jsp?_requestid=245625


Looks pretty similar to me!

n8mac
Nov 12, 2008, 05:52 PM
Otherwise there would only be one corporation in existence, that does everything, and does it BADLY.

Microsoft tries their best.:D

bmb012
Nov 12, 2008, 06:07 PM
Uh, why do I have the feeling that if they did fix their prices, it would only be the difference of, what, 2 bucks a display? Would still affect companies like Apple in bulk, but there's no way that now anyone's going to be offering displays for cheaper.

old-wiz
Nov 12, 2008, 06:26 PM
It makes me wonder how much the price fixing actually changed the price? For example, were they adding 5% to the price of the display? 10%? Obviously they have to make a profit, but...

alphaod
Nov 12, 2008, 06:39 PM
This would mean that all those years I've been paying a "premium" for S-IPS panels has all been due to price fixing?! :mad:

"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.

Price fixing isn't illegal; it's cheating consumers and fraud that is.

skellener
Nov 12, 2008, 06:39 PM
Makes you wonder what other companies are in collusion....oil, cellphone carriers, cable, ISPs, auto manufacturers, music retailers, etc....

Free market ain't so free afterall....

skellener
Nov 12, 2008, 06:44 PM
"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.Yes, businesses are free to set whatever prices they want. But when they collude to fix prices with each other, it kills competition and the free market. It is and should continue to be illegal.

BenRoethig
Nov 12, 2008, 06:50 PM
Maybe Sharp will offer discounts on a new Macbook / Mackbook Pro to those they helped rip off. :D

OK, it's a dream, but ...

We're talking about a company who charges premium prices for displays with panels that haven't been made in a couple years. Apple's smart enough to know they can use the almost blind loyalty of some of its customers exhibit to make a lot of money.

matticus008
Nov 12, 2008, 06:51 PM
So, LG, Chunghwa and Sharp pay to the big Kitty, and then we get scraps, right? $5 of free iTunes downloads or a replacement iPod for the overpriced one that I gave to my brother. Pretty certain "we won't see JACK"...:eek:
You absolutely won't see anything at all. Zero. This wasn't a class action suit. No gift certificates, no rebates, nothing. The fine is levied by the US government. You still get the proportional benefit of the money, but no input as to how it's spent.
This is good for competition.

Without the fixed high price, EVERYONE who produces LCDs will get downward pressure.
This already happened. There is no future fallout of this price fixing, which was deemed to have been resolved in 2006. The drop in prices two years ago was partially attributed to this. Prices have already come down, and anything that happens this holiday season is a result of improved efficiency, new technology, economic pressure, or marketing strategy.
Fraud prosecution, as what happened here, is the proper way to handle these situations.
These companies were not prosecuted for fraud.
"Price fixing" is a fake crime. Businesses should be free to set whatever prices they want by whatever means they want. No one has to buy what they're selling.
No. What you're describing is the justification for why none of the proceeds of the case go back to consumers--because they voluntarily parted with their money for the affected products. It certainly is no fake crime, however.

Setting prices, even all at the same level, through normal, open, competitive methods is perfectly fine. A company can price its products at whatever it chooses. It cannot, however, enter into an agreement with others to do the same in order to cause damage to competitors not part of the agreement, because this is an unlawful consolidation of market power.
Uh, why do I have the feeling that if they did fix their prices, it would only be the difference of, what, 2 bucks a display? Would still affect companies like Apple in bulk, but there's no way that now anyone's going to be offering displays for cheaper.
That's more or less how it works. An outright jump in prices, or significant premium over the non-participating baselone, is uncommon. But when you're working as an industry supplier to firms that buy in the tens of thousands of units per order on very low-margin units (LCD panels), an extra two or three dollars per unit has a comparatively large impact on profits or costs, depending on which side you're looking from.
This would mean that all those years I've been paying a "premium" for S-IPS panels has all been due to price fixing?! :mad:
No. S-IPS panels are more expensive because they're actually more expensive. As I recall, the price fixing was in the lower end of the market in TN and MVA panels.

FrankieTDouglas
Nov 12, 2008, 06:54 PM
So Apple will pass this savings on to their customers?

matticus008
Nov 12, 2008, 07:04 PM
So Apple will pass this savings on to their customers?
There are no savings to pass on. LCD prices are no longer affected by the scheme in question.

gnasher729
Nov 12, 2008, 07:16 PM
I've heard rumors (correct me if I'm wrong) that Apple doesn't have anything less than a 28% margin on its products. I'm not sure if that's 28% more than just the bill of materials or what (I'm no businessman).

It's not rumors, it's what Apple says in it's SEC filings. Most products have a gross margin of 30% or higher. The "gross margin" of a product is the difference between what you pay, and what it costs Apple to sell that one item to you, that is parts, production, transport, sales, warranties, replacing broken items and so on. It doesn't take into account any cost that Apple had whether you were buying the product or not. For example product development, advertising, all the cost that Apple had whether you bought their product or not.

The "bill of materials" is something completely different. That is what you would have to pay if you bought all the parts that make up say an iMac and throw them all on a big pile. It is a very meaningless number.

GoCubsGo
Nov 12, 2008, 07:18 PM
Wow, this is pretty big. Kind of hard for electronics producers to take a hit like that during these economic times.

I think you're alone in this thought. Who in their right mind will have pity for these companies? In hard economic times they got caught. They tried to **** you, me, and anyone else buying their crap over. I don't feel one bit sorry for them. The punishment the execs got was nothing more than a handful of cash over 90 days. How long have they been price fixing? I'm guessing longer than 90 days. :rolleyes:

To hell with companies that do this and get caught. None of them will go out of business as a result of their fines.

mwickens
Nov 12, 2008, 07:19 PM
So if all computer makers decide to price fix laptops, and make them start at $5000, and all towers start at $4000, you think that's OK?

Why not a million dollars, if they can just set the price to whatever they want and people will continue to buy them? If you think the only thing keeping companies from getting together to fix prices at ridiculous levels is the existence of a law against it, well, you're wrong. The free market won't allow that to happen, except maybe briefly, and in isolated pockets of the economy.

For more info on why price fixing should not be illegal, see:

http://www.aynrand.org/site/News2?page=NewsArticle&id=14311&news_iv_ctrl=1221

gnasher729
Nov 12, 2008, 07:35 PM
Why not a million dollars, if they can just set the price to whatever they want and people will continue to buy them? If you think the only thing keeping companies from getting together to fix prices at ridiculous levels is the existence of a law against it, well, you're wrong. The free market won't allow that to happen, except maybe briefly, and in isolated pockets of the economy.

For more info on why price fixing should not be illegal, see:

http://www.aynrand.org/site/News2?page=NewsArticle&id=14311&news_iv_ctrl=1221

That page is about a very different "price fixing". It is about a company that sells its product to various dealers, and asks all dealers to charge the same price to end users. If we assume that the company charges all its dealers the same wholesale price, any price difference to the consumer would come from some dealer taking less margin than others. The product itself would still be competing with other products. As a consumer, you wouldn't benefit from competition between individual dealers, you would still benefit from competition between one manufacturer and all its dealers, and another manufacturer and all the dealers of that manufacturer.

What this court case was about, was different manufacturers agreeing between themselves on an artificially high price, which increased all their profits by removing competition from the market.

One word, since the article you quoted talks about the Bush administration saying that laws allowing the first kind of price fixing are "outdated": I think there are many, many people who wish that the Bush administration had worked on slightly more "outdated" principles, and the world economy would be in much less of a mess today.

matticus008
Nov 12, 2008, 07:44 PM
The "gross margin" of a product is the difference between what you pay, and what it costs Apple to sell that one item to you, that is parts, production, transport, sales, warranties, replacing broken items and so on.
Not quite. The gross margin is the difference between the retail price and the cost of goods sold. That is parts, production, labor. It does not include distribution, sales, warranty, or service costs. It also does not include, as you pointed out, R&D, marketing, and Apple's operations and capital costs.
The "bill of materials" is something completely different. That is what you would have to pay if you bought all the parts that make up say an iMac and throw them all on a big pile. It is a very meaningless number.
Again, not quite. The BOM is the actual cost of the constituent parts--not what a third party would pay for the pile of parts, which is almost always a higher amount.

mwickens
Nov 12, 2008, 07:57 PM
That page is about a very different "price fixing". It is about a company

It's not about any specific case. It's about a principle, and it uses one case as an example.

What this court case was about, was different manufacturers agreeing between themselves on an artificially high price, which increased all their profits by removing competition from the market.

Did they forcibly prevent others from entering the market? If not, I don't see the problem. They set their price and people agreed to pay it.


I think there are many, many people who wish that the Bush administration had worked on slightly more "outdated" principles, and the world economy would be in much less of a mess today.

You're right, lots of people think that. But many others are trying to educate (http://www.aynrand.org/site/PageServer?pagename=arc_financial_crisis) them about how government intervention -- instigated during the Bush administration and the ones preceding it -- is the cause of today's mess. I highly recommend this video (http://www.aynrand.org/site/PageServer?pagename=reg_ls_capitalism_without_guilt).

rockosmodurnlif
Nov 12, 2008, 08:06 PM
585 million, actually that's about 1/1400 of the 700 billion ;)
I was thinking like a Congressman for a sec, so easy to mix up these millions and billions.

matticus008
Nov 12, 2008, 08:29 PM
Did they forcibly prevent others from entering the market? If not, I don't see the problem. They set their price and people agreed to pay it.
Yes. They leveraged their collective market power in a collusive agreement to raise prices above the level of competition, for their collective gain and to the detriment of those not party to the agreement and their customers.

The only reason it is successful is because the suppliers moved in lockstep. Had one party raised prices on its own, it would have suffered a drop in sales to the others, negating the price increase. Working together, they preserved business and profitability unfairly.

It acts as a barrier to entry because a non-party, previously eligible for contracts at the level of natural competition, must now discount prices in order to draw business. This happens and is perfectly acceptable within the scope of fair competition. It is targeted destruction where there is price fixing.

Michael CM1
Nov 12, 2008, 09:13 PM
Why not a million dollars, if they can just set the price to whatever they want and people will continue to buy them? If you think the only thing keeping companies from getting together to fix prices at ridiculous levels is the existence of a law against it, well, you're wrong. The free market won't allow that to happen, except maybe briefly, and in isolated pockets of the economy.

For more info on why price fixing should not be illegal, see:

http://www.aynrand.org/site/News2?page=NewsArticle&id=14311&news_iv_ctrl=1221

Did you not see the gas prices earlier this year? It was all done on "price speculation" in the stock market. People start investigating and LIKE MAGIC prices have dropped about $85/barrel.

If you think the economy should be uber-capitalistic without regulation, please don't get a job in the Treasury Department. Yikes.

IJ Reilly
Nov 12, 2008, 09:17 PM
This case almost certainly settled at this particular moment because the defendants knew they would not get such a good deal from the Obama administration. The Antitrust Division of the Department of Justice threatened industry with the comfy chair when it came to antitrust law violations. The penalties may look quite large, but with little doubt the industry got off easily, at least far more easily than they might have from a Justice Department that actually enforces antitrust law.

Moler
Nov 12, 2008, 10:26 PM
Why companies cannot talk to each other and set same prices of their products? What is a high price anyway? If it is high no one will buy their stuff and they will have to reduce the price or disappear. Or other companies will show up and take their business. That is a free market, not a government deciding on prices.

A large screen TV is not necessity for 99.9% of people. We are so indulged in wasting resources of this planet that our kids will despise us.
A part of my respect for Apple is that they are resisting this mass histeria to reduce their prices and actually use part of their profits to design products with minimal impact on the environment.

SleepyHead157
Nov 12, 2008, 10:34 PM
do I get a rebate? lol

mwickens
Nov 12, 2008, 11:02 PM
They leveraged their collective market power in a collusive agreement to raise prices above the level of competition, for their collective gain and to the detriment of those not party to the agreement and their customers.

"Market power" is not force. And it is power only to the extent that people still want and are able to buy what they're selling.

Of course they are doing it in pursuit of gains for themselves and yes, it is to the detriment of competitors and people who would rather pay less. But if you're going to outlaw that, you might as well go all the way and have a government bureaucrat dictate what the exact price is that doesn't give a company more profit than it "should" have and which doesn't "harm" its competitors too much.

hiptobesquare
Nov 12, 2008, 11:13 PM
Why companies cannot talk to each other and set same prices of their products? What is a high price anyway? If it is high no one will buy their stuff and they will have to reduce the price or disappear. Or other companies will show up and take their business. That is a free market, not a government deciding on prices.

A large screen TV is not necessity for 99.9% of people. We are so indulged in wasting resources of this planet that our kids will despise us.
A part of my respect for Apple is that they are resisting this mass histeria to reduce their prices and actually use part of their profits to design products with minimal impact on the environment.


Yeah, and you get to decide what is necessary for 99.9% of the people.

You can just decide prices for things, while you are at it.

In order for our kids not to despise us, do we need to live in a cave? will they love us then?

And CRT tubes, and previous tech was just so wonderful, compared to LCD screens.

Give it a rest. Every part of your premise is wrong.

People are free to decide what they want, and what is necessary. That is FREEDOM. IF other people elsewhere aren't free, they ideally SHOULD BE, and should look to that.
You don't get to tell them what you've decided. You obviously aren't capable of it.

Collusion to fix prices is illegal, and immoral. The market forces work out the appropriate price, not just a cabal of producers in ANY industry. The government was doing it's job on this one, for once, and protecting the people from fraudulent, anti-trust corporate collusion. CRIMINAL activity. Usually the government is too caught up in regulation of non-criminal activity, and making things difficult for everyone.

IF we don't use our resources, and use them wisely, our kids won't have the time to resent us, for their having to work for subsistence living, or wage slavery to pay the state. They'll resent us for saddling them with burdens we weren't willing to bear, and stupidity like yours.

Put that emotionalism aside and learn something about commerce and economics.

IJ Reilly
Nov 12, 2008, 11:18 PM
"Market power" is not force. And it is power only to the extent that people still want and are able to buy what they're selling.

Of course they are doing it in pursuit of gains for themselves and yes, it is to the detriment of competitors and people who would rather pay less. But if you're going to outlaw that, you might as well go all the way and have a government bureaucrat dictate what the exact price is that doesn't give a company more profit than it "should" have and which doesn't "harm" its competitors too much.

Nonsense. Collusion to fix prices (AKA, cartels) have been illegal under law in every advanced nation for a century or more. This kind of behavior has long been recognized as destructive to free market capitalism. The only reason I can imagine why you'd have such airy views of this is because you're unfamiliar with the history of price fixing.

alphaod
Nov 12, 2008, 11:26 PM
No. S-IPS panels are more expensive because they're actually more expensive. As I recall, the price fixing was in the lower end of the market in TN and MVA panels.

I prefer to blame the manufacturer than myself for paying the premium ;)

matticus008
Nov 13, 2008, 04:06 AM
"Market power" is not force.
No. Market power is by definition economic force.
And it is power only to the extent that people still want and are able to buy what they're selling.
Not the issue. People would still want and be able to buy what they were selling if the companies didn't conspire to fix prices.
Of course they are doing it in pursuit of gains for themselves and yes, it is to the detriment of competitors and people who would rather pay less. But if you're going to outlaw that
Are you just trolling at this point, or do you really not see the difference? What's outlawed is the intentional agreement to manipulate the market. They're welcome to raise their prices whenever they like, so long as they allow the unmolested market to decide whether or not to continue paying that price.

Chupa Chupa
Nov 13, 2008, 04:44 AM
Why companies cannot talk to each other and set same prices of their products? What is a high price anyway? If it is high no one will buy their stuff and they will have to reduce the price or disappear. Or other companies will show up and take their business. That is a free market, not a government deciding on prices.

No, that is companies creating a "virtual monopoly," which is what true price fixing is. When companies collude to set a certain price it takes the consumer equation out of the market and skews the price/demand ratio.

Take Apple for example. It needed screens for it's iPod. Now if every manufacturer gets together and says "let's all charge $X for 2-3" LCD screens," then they have just taken away Apple's bargaining power as a consumer because every manufacturer has secretly agreed to charge the same price. Apple has no choice but to pay the artificially inflated (not due to real demand) price. That in turn, of course, gets pass on to iPod buyers.

That is different than if Sharp saw what LG was charging in publicly available price memo and independently decided to increase its prices. In that situation, Apple would still have bargaining power because Sharp would not know if LG might offer Apple a better price. The price, therefore, would be set by market demand, and not by the two companies colluding.

MrCrowbar
Nov 13, 2008, 05:20 AM
I miss CRT displays. I've even seen some widescreen 720p models in the 40" range ad for $700, and that was in 2006.

LCDs are starting to approach the picture quality of good CRTs (contrast, viewing angle, colors, reaction time) but usually the electronics inside the TVs (or the bad breadcast signal) ruins it with stuttering, interlaced video (only looks ok on TVs.

It's like being stuck in the 80s where CRT TVs were expensive.
It might be partly because TVs are so expensive that people download all their movies and watch them on the computer. :eek:

coffey7
Nov 13, 2008, 06:58 AM
The price of Apple's flat panels was the factor for me not buying one. Crazy prices.

rustedshut
Nov 13, 2008, 08:54 AM
Holy crap, that is one hell of a fine!

VoR
Nov 13, 2008, 11:31 AM
Wonder how long it'll take for them to get caught again

rmc4139
Nov 13, 2008, 06:02 PM
The Free Market in its purest form is a beautiful thing indeed. However, events like this make me thankful for government intervention.
We really do need regulation, and any libertarian suggesting otherwise is naive. I like to think of it as the comparison between alcohol consumption in the US vs. European countries. Europe has a lower drinking age but fewer alcoholics and fewer alcohol related deaths. If we lowered the drinking age, it would be chaos. Societies build themselves upon specific guidelines and it is generally catastrophic to alter them, with the exception of civil rights, etc.
Established economies cannot simply bounce into a free market without companies abusing their freedom. The dog is trained on a leash.

kaiwai
Nov 13, 2008, 08:18 PM
Maybe Sharp will offer discounts on a new Macbook / Mackbook Pro to those they helped rip off. :D

OK, it's a dream, but ...

How about before opening yout mouth you read the article:

"Based on the article, Apple was only affected between September 2005 and December 2006 when the company used Sharp's LCDs for the iPod's screen. "

Therefore, Apple was unaffected by the collusion in regards to MacBook/MacBook Pro and the rest of their line. IIRC they use Samsung for their LCD supplier.

julohan
Nov 14, 2008, 06:36 AM
This lawsuit will have no affect on the price. They may drop but not because of the lawsuit. They have been going in court over a couple years on this issue. So, as soon as they were initially brought to court the fixed pricing would had change, such as 2 years ago lets say. So the price fixing has not been in effect for a while. This article is just about what the court decided. If that makes sense.

IJ Reilly
Nov 14, 2008, 10:46 AM
Except that a court didn't decide. The parties pled guilty and offered a settlement.