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LCD makers express regret over US price-fixing fines
- — 14 November, 2008 09:50
Asian LCD makers fined by the US Department of Justice (DOJ) expressed regret over the price-fixing schemes that led to US$585 million in fines.
The companies, Sharp of Japan, LG Display of South Korea and Chunghwa Picture Tubes of Taiwan, plead guilty to fixing prices on LCD (liquid crystal display) panels, the most expensive part of the screens on computer monitors, laptops, LCD-TVs and mobile phones.
Sharp pledged to work to regain public trust and implement measures to insure against a recurrence of any kind of similar issue. In a statement, the company said its chairman and CEO, along with some directors pledged to return 10 percent to 30 percent of their remuneration for the December quarter to ease anxiety among company shareholders.
The DOJ fined Sharp US$120 million.
Chunghwa Picture Tubes will continue working with the DOJ on its LCD industry investigation, it said in a statement. The company said it had already set aside funds in the event it settled with the DOJ in this case so the US$65 million it was fined will not impact its financial situation.
The DOJ investigation started in late 2006.
LG Display said it cooperated with the DOJ throughout the investigation and has put in place a new compliance program as a result of the penalty.
"We don't expect this kind of thing to ever happen again," said Bang-Soo Lee, vice president of public relations at LG Display.
LG Display's fine was the largest fine among the three LCD makers, US$400 million, and the second-highest criminal fine ever imposed by the DOJ's Antitrust Division. Lee said the size of the fine is in proportion to the company's revenue. Since LG Display sells more LCD panels than Sharp or Chunghwa Picture Tubes, it faced a heavier payout.
The company will pay the fine over a five-year period, he said, so it will not have an immediate impact on its financial results.
The three LCD panel makers agreed to pay a total of US$585 million in fines for price-fixing and pledged to cooperate in the DOJ's continuing antitrust investigation into LCD price-fixing.
The companies also face investigations by regulators in Japan and the European Union.
The DOJ penalty couldn't come at a worse time for the companies. A glut of LCD panels globally has depressed prices and the global financial crisis is hurting demand for a range of items LCD panels are used in, including the screens of computer monitors, laptops, LCD-TVs and mobile phones.
The DOJ said US consumers who buy mobile phones, computers and other household electronics have been most affected by the price-fixing conspiracy, while affected companies include Apple, Dell and Motorola.
The LCD makers fixed prices from a time period between April, 2001 to near the end of 2006, according to the DOJ.
(Martyn Williams in Tokyo contributed to this story.)