Taiwanese LCD maker fined US$220 for rigging market

A Taiwanese producer of LCD displays has been fined US$220 million after pleading guilty to participating in a price-fixing racket. This brings to six the number of companies which has been implicated in the global LCD price-fixing ring that authorities in the US, Europe, and in Japan have been investigating.

Tainan-based Chi Mei Optoelectronics has pleaded guilty to one count of participating in a conspiracy to fix the prices of LCD display panels, which are used in consumer electronics products such as computer monitors, notebook PCs, mobiles phones, and televisions, between September 2001 and December 2006.

The five other companies which have previously pleaded guilty are LG Display, Sharp, Chunghwa Picture Tubes, Seiko Epson, and Hitachi. They have been fined an aggregate US$860 million, and nine executive have been charged in the-going investigation.

According to the US Department of Justice, the company manipulated the market by holding meetings and conversations with competitors, at which point they would agree to sell goods at certain pre-determined levels. To enforce and monitor the agreement, Chi Mei exchanged information on its sales of LCD panels with competitors, the agency said.

Its actions directly affected some of the largest computer and television manufacturers in the world, including Apple, Dell, and HP. By the end of the period in which Chi Mei engaged in the price-fixing racket, the global market for LCD panels was valued at US$70 billion.

As part of the plea agreement, Chi Mei has agreed to cooperate with the government’s on-going anti-trust investigation.

Price-fixing is in violation of the US Sherman Act, and each violation carries a maximum penalty of US$100 million. This could be increased to twice the gain derived from the crime, or double the loss suffered by its victims.

Commenting on its decision to plead guilty, Eddie Chen, Chi Mei’s head of finance, told Bloomberg: “We thought it was the best way to get things over.”