Was There Price Fixing In the LCD Market?

A big antitrust action was filed today against several major technology companies for allegedly illegally fixing prices for liquid crystal display (“LCD”) screens used in computers, televisions, and cell phones. The lawsuit, filed by New York State (through Attorney General Andrew Cuomo) seeks to recover damages allegedly suffered from 1996 to 2006 by the state and other public purchasers – local governments, schools, hospitals, and colleges, among others – that purchased computers and other goods containing the allegedly price-fixed screens. The suit seeks damages, restitution, and civil penalties. 

The lawsuit alleges that: Companies in Japan, Korea, and Taiwan, and their U.S. counterparts engineered a cartel that dominated the $70 billion market for LCD screens for approximately a decade. The cartel ensured that LCD prices were set not by competition, but by detailed and explicit secret agreements among the competitors. New York State purchasers paid artificially higher prices for products containing LCD panels as a result of the illegal conspiracy.
 
Specifically, the lawsuit alleges that:
 
·         Top-level executives, including CEOs, attended secret meetings on a regular monthly or quarterly basis to agree on minimum prices, price targets and increases, and prices to be charged to specific computer manufacturers;
·         Companies exchanged production information and agreed to certain output levels;
·         In order to cover up the conspiracy, companies coordinated their messages to their customers and manipulated media announcements in order to give the false impression that their agreed upon price hikes were due to supply and demand conditions; and
·         Because of the cartel, conspirators were able to avoid competition and keep LCD prices artificially high to the detriment of computer manufacturers and consumers.
 
The defendants named in the action are:
 
·         AU Optronics Corporation;
·         AU Optronics Corporation America, Inc.;
·         Chi Mei Corporation;
·         Chi Mei Optoelectronics Corporation;
·         Chi Mei Optoelectronics USA, Inc.;
·         CMO Japan Co., Ltd.;
·         Hitachi Displays, Ltd.;
·         Hitachi, Ltd.;
·         Hitachi Electronic Devices (USA), Inc.;
·         LG Display Co., Ltd.;
·         LG Display America, Inc.;
·         Samsung Electronics Co., Ltd.;
·         Samsung Electronics America, Inc.;
·         Samsung Semiconductor, Inc.;
·         Sharp Corporation;
·         Sharp Electronics Corporation;
·         Toshiba Corporation;
·         Toshiba Matsushita Display Technology Co., Ltd.;
·         Toshiba America Information Systems, Inc.;
·         Toshiba America Electronic Components, Inc.
 
This case is being handled for the government by Assistant Attorneys General John Ioannou and Geralyn J. Trujillo and Acting Chief of the Antitrust Bureau Richard L. Schwartz, under the supervision of Deputy Attorney General for Economic Justice Michael Berlin and Executive Deputy Attorney General for Economic Justice Maria Vullo.