Taiwan company, executives indicted for LCD price fixing

Six current executives from AU Optronics are charged with felony price fixing

A federal grand jury in San Francisco has indicted the largest Taiwanese maker of thin-film transistor-liquid crystal display (TFT-LCD) panels, its U.S. subsidiary and six executives for participating in a conspiracy to fix TFT-LCD prices, the U.S. Department of Justice said Thursday.

The indictment, filed Thursday in U.S. District Court for the Northern District of California, charges AU Optronics with participating in a worldwide LCD price-fixing conspiracy between September 2001 and December 2006. The company, U.S. subsidiary AU Optronics America and the six executives charged all participated in the price-fixing conspiracy, the DOJ said in a press release.

TFT-LCD panels are used in computer monitors and laptops, television sets, mobile phones and other electronic devices. At the end of 2006, the worldwide market for TFT-LCD panels was US$70 billion, the DOJ said. Companies directly affected by the price-fixing conspiracy include some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett-Packard, the DOJ said.

An AU Optronics spokesman wasn't immediately available for comment.

According to the DOJ, Hsuan Bin Chen, AU Optronics' president, and Hui Hsiung, AU Optronics' executive vice president, participated in the conspiracy from October 2001 to December 2006.

Lai-Juh Chen, AU Optronics' director of desktop display business group, participated in the conspiracy from February 2003 to November 2005, the DOJ said. Shiu Lung Leung, AU's senior manager in the desktop display business group, participated in the conspiracy from May 2002 to December 2006, the agency said.

Borlong Bai, AU's senior manager and director of the notebook display business group, participated from March 2003 to December 2006, and Tsannrong Lee, who served in executive positions in the IT display, desktop display and notebook display groups, participated from January 2002 to December 2006, the DOJ said.

According to the one-count felony charge, AU Optronics and its executives agreed to fix prices of TFT-LCD panels during meetings and issued price quotes in accordance with the agreements reached. Executives from AU Optronics and its American subsidiary also exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

Thursday's indictment supersedes an indictment filed in February 2009, against co-conspirators Cheng Yuan "C.Y." Lin and Wen Jun "Tony" Cheng, both former Chunghwa Picture Tubes executives, and Duk Mo Koo, former LG Display executive.

AU Optronics, which is based in Hsinchu, Taiwan, AU Optronics Corporation America and six of its executives are charged with price fixing in violation of the U.S. Sherman Act. The maximum penalty for the conviction of a Sherman Act violation is 10 years in prison, a $1 million fine for individuals and a $100 million fine for corporations. The fines can be increased to twice the gain derived from the crime or twice the loss suffered by victims.

In the DOJ's ongoing investigation into LCD price fixing, six companies have pleaded guilty and have been sentenced to pay criminal fines totaling more than $860 million. Including Thursday's indictment, 17 executives have been charged.

AU was formed in September 2001 by the merger of Acer Display Technology and Unipac Optoelectronics, according to the company's Web site. In October 2006, AU merged with Quanta Display to create a company with 17 percent of the world's large-sized TFT-LCD market.

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Grant Gross

IDG News Service
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