FBI Expose International LCD Price Fixing Conspiracy
FBI Expose International LCD Price Fixing Conspiracy
Taiwanese Company, Execs Sentenced
Did you buy a computer notebook, computer monitor, or big-screen TV anytime from late 2001 to 2006? If you did, odds are that you paid too much for it because of an international criminal conspiracy to fix the prices of the LCD (liquid crystal display) panels used in these products.
Recently, AU Optronics Corportation—the largest Taiwanese producer and seller of LCD panels—and two of its former top executives were sentenced for their roles in this conspiracy. The company was ordered to pay a $500 million criminal fine, and the executives each received three years in federal prison. AU Optronics is the eighth company convicted as a result of a joint FBI-Department of Justice (DOJ) Antitrust Division effort to uncover this worldwide price-fixing conspiracy.
Anatomy of a conspiracy. A few days after the terrorist attacks of 9/11, top-level executives from a number of Asian manufacturers of LCD panels met secretly in a Taiwan hotel room and agreed to a plan to fix the prices of LCDs in the U.S. and elsewhere.
During subsequent monthly meetings, group members exchanged production, shipping, supply, demand, and pricing information on LCD panels used in computer notebooks, monitors, and flat-screen TVs. Participants agreed on prices and would then sell their products at these prices to some of the world’s largest technology companies who used LCD panels in their products.
During the same time period, senior-level employees of AU Optronics Corp. regularly exchanged information with its Houston-based subsidiary—AU Optronics Corp. America—on sales of LCD panels for the purpose of monitoring and enforcing adherence to the prices agreed upon by other LCD manufacturers in the U.S.
The end result of all this price-fixing? Artificially inflated prices for consumers, and more money into the coffers of the conspiracy’s participants.
Change in tactics. These meetings went on until mid-2005, when participants learned that one or two of their major LCD customers may have become aware of the conspiracy, so the top leaders who had been attending these meetings began sending lower-level employees. The meetings were also moved out of hotel rooms and into public restaurants and cafes.
And a year later, the co-conspirators became even more concerned when they heard about an ongoing price-fixing investigation in the U.S. into the dynamic random access memory (DRAM) industry. To avoid detection, group members decided to meet one-on-one with each other in restaurants and cafes.
The FBI became involved in the case in mid-2006 at the request of DOJ’s Antitrust Division, and Bureau investigators joined forces with Antitrust Division prosecutors. In antitrust cases, as in many of our white-collar crime cases, the FBI uses its full arsenal of investigative weapons—executing search warrants, interviewing witnesses and others, analyzing records, conducting lawful surveillance, using cooperating witnesses, etc.
Additional sanctions. In addition to the extraordinary criminal fine levied on AU Optronics and the sentencing of two former executives, the company was also ordered to implement an internal compliance program, hire an independent corporate compliance monitor, and take out ads in U.S. and Taiwanese newspapers publicizing the criminal sanctions taken against it.
These actions send a powerful message to would-be perpetrators of price-fixing and other antitrust schemes—the U.S. criminal justice system will uncover your illegal activities and hold you accountable.
Reality views by sm –
Saturday, November 17, 2012
Tags – FBI LCD Price Fixing
12 comments:
oh wow, intriguing...so does this mean prices will be going down now?
That's really sneaky...
hmm-
Good job buddy.
At last, one scam outside India :) I guess these kind of cartels exist in a lot of industries. But only a very few such cases have been identified. Mostly such cartels cease to exist due to the lack of cooperation between competitors.
Destination Infinity
@Brian Miller
thanks.
@DWei
thanks.
@रविकर
thanks.
@Virendra Kumar Sharma
thanks.
@Destination Infinity
thanks.
that sounds trouble
@MEcoy
thanks.