Fallout From LCD Price Fixing Scandal Continues as Chi Mei Agrees to $220 Million Fine

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Original poster
Apr 12, 2001
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The Wall Street Journal reports (subscription required) that Taiwanese LCD manufacturer Chi Mei Optoelectronics has agreed to pay a $220 million fine to address criminal charges stemming from extensive price fixing in the LCD industry from 2001 through 2006 that affected a number of companies, including Apple. Chi Mei becomes the sixth company to plead guilty in the conspiracy over the past year.
The department said the conspiracy affected some of the world's largest computer and television manufacturers, including Apple Inc. (AAPL), Dell Inc. (DELL) and Hewlett-Packard Co. (HPQ).

Prosecutors said Chi Mei and its co-conspirators participated in meetings in Taiwan, South Korea and the U.S. in which they agreed to fix LCD prices. The companies later shared sales data with each other to ensure all conspirators were adhering to the price-fixing agreement, prosecutors alleged.

Prosecutors didn't say how much the price-fixing victims might have paid in inflated LCD prices.
The criminal charges were brought by the U.S. Department of Justice, which has levied a total of $860 million in fines against the six companies.

Chi Mei has been a supplier of LCD displays for several of Apple's notebook models, and just last month agreed to a merger with rival Innolux, itself a subsidiary of long-time Apple manufacturing partner Foxconn. Apple, however, partnered with LG early this year on a five-year deal to lock in a long-term strategic alliance with what was already Apple's largest LCD supplier.

Article Link: Fallout From LCD Price Fixing Scandal Continues as Chi Mei Agrees to $220 Million Fine
 

notjustjay

macrumors 603
Sep 19, 2003
6,044
118
Canada, eh?
I wonder if we should expect to see cheaper LCDs in the future, or if that correction has already happened.

I have already noticed that LCD TVs are coming down impressively in price, though that may be irrelevant to this particular situation.
 

bigcat318

macrumors 6502
Dec 25, 2007
332
11
Doesnt do me any good on the two LCD tvs and two laptops I bought during that time period.
 

wesleyh

macrumors 6502
Mar 23, 2007
432
0
We the end consumer will see it in TV and laptop prices. You can see the effects on today as TVs are being cut in price (large discounts).
The snippet says price fixing was from 2001 to 2006. Why would it affect today's prices?
 

arturo175

macrumors newbie
Aug 27, 2008
8
0
Buenos Aires, Argentina
As now the lcd panels are already cheaper due to the new led panels coming out and oled panels in the near future.. nevertheless the price drop you guys see now is definitely not due this issue, don't you forget also the global crisis... lcds already dropped price on 2007-2008 considerably.
 

Rocketman

macrumors 603
Taiwanese LCD manufacturer Chi Mei Optoelectronics has agreed to pay a $220 million fine

The criminal charges were brought by the U.S. Department of Justice, which has levied a total of $860 million in fines against the six companies.

The department said the conspiracy affected some of the world's largest computer and television manufacturers, including Apple Inc. (AAPL), Dell Inc. (DELL) and Hewlett-Packard Co. (HPQ).
Is the GOVERNMENT going to give the proceeds of the FINES to the DAMAGED parties? This "fine thing" is typically a cash grab by the government, and the victims, the facilitators of the government fines, be damned. Our country is a pirate.

At least lawyers only keep 33-40%. The government keeps 100%!!

The upside to the collusion and price fixing was the companies were profitable thus able to ramp R&D and production unlike what they could have done with slim margin commodity pricing. The government forgets it, so we have to remind them. Collusion is a free-market activity made illegal by the government the same way they have prohibition. Both laws have significant NEGATIVE social and business costs.

Rocketman Econ 202
 

yoak

macrumors 65816
Oct 4, 2004
1,486
44
Oslo, Norway
Is the GOVERNMENT going to give the proceeds of the FINES to the DAMAGED parties? This "fine thing" is typically a cash grab by the government, and the victims, the facilitators of the government fines, be damned. Our country is a pirate.

At least lawyers only keep 33-40%. The government keeps 100%!!

The upside to the collusion and price fixing was the companies were profitable thus able to ramp R&D and production unlike what they could have done with slim margin commodity pricing. The government forgets it, so we have to remind them. Collusion is a free-market activity made illegal by the government the same way they have prohibition. Both laws have significant NEGATIVE social and business costs.

Rocketman Econ 202
You really belive that those companies put all the money back into R&D and didn´t pocket any of it?
Go figure
 

NT1440

macrumors G5
May 18, 2008
12,185
14,464
You really belive that those companies put all the money back into R&D and didn´t pocket any of it?
Go figure
Willful ignorance is bliss. I'm sure the Board or Directors were just screaming with joy "Oh boy! lets scoot all this money right over to the R&D department!".
 

Vmaatta

macrumors regular
Nov 11, 2007
111
0
Where's my money...

I'd like to see some greenbacks for the '06 MBP :mad:. I guess there's no hope :D.
 

DraziGuy

macrumors member
Oct 20, 2009
81
1
Government

Now you do all realize that you are the goverment, right? The money will come back to you one way or another, as new roads, airport construction, bridges, etc. It's not like the goverment just sits on all of its revenues for a rainy day. If anything, the main problem is goverments overspending...
 

madog

macrumors 65816
Nov 25, 2004
1,274
1
Korova Milkbar
why is it illegal? i thought that's all what capitalism is about: greed, maximum own profits, exploiting wherever it's possible :D
You're smile makes be believe you are being facetious, but Capitalism is about free market and privately controlled labor, and then to an extent encourages competition in the market which is supposed to drive prices lower. People are greedy. People exploit others whenever possible. Just as the people in these companies chose to collude and gain an unfair advantage in the market and keep prices arbitrarily high.

No economic system will prevent greedy people from exploiting others.
 

DaveGee

macrumors 6502a
Jul 25, 2001
677
2
Could the possible mean that HDTV prices could have dropped even LOWER then they already have?!!? Wow .... Amazing! :eek:
 

Dwalls90

macrumors 601
Feb 5, 2009
4,755
1,109
Hopefully SSD manufacturers will get caught in there act of consumer rape.
That's different. There is a very high demand with a very limited supply of the chips. In fact, memory chips of all sort seem to be in need as the computer industry continues to boom with greater needs of memory chips being used in smart-phones, TV's, iPods, ect.

Plus, price-fixing is completely different than just actually setting the price at one level. Price-fixing occurs when multiple firms exist and all of the firms agree to fix the prices at one level, so that it seems that the prices are fair and competitive to the consumer as they are all the same. In reality they are way above cost bringing in great profits for the companies.
 

mkrishnan

Moderator emeritus
Jan 9, 2004
29,777
12
Grand Rapids, MI, USA
why is it illegal? i thought that's all what capitalism is about: greed, maximum own profits, exploiting wherever it's possible :D
I'm sure that if any of the executives involve get fired or jailed, they will be bailed out and re-hired to work in the health insurance or pharmaceutical industries, wherein price fixing and collusion are considered standard operating procedure. :D
 
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