South Korean companies Samsung Electronics and LG Display, the world’s top two LCD makers who in combination produce over half of the LCD panels sold worldwide, were among six LCD screen manufacturers rapped by the European Commission today for colluding to fix the price of LCD panels used in flat-screen HDTV displays, computer monitors and laptops between October 2001 and February 2006. Four other Taiwanese firms – AU Optronics (AUO), Chimei Innolux (CMI), Chunghwa Picture Tubes and Hannstar Display – were named as participating members in the LCD price-fixing cartel.
Officials from these companies were found by the European regulator to have met secretly on a monthly basis to agree on LCD pricing issues such as price range and minimum prices. They also shared other commercially sensitive information including factory production capacity, future planned output, and even some technological data. In total, approximately 60 such illegal rendezvous – dubbed “Crystal Meetings” by the perpetrators – were held, mainly in Taiwanese hotels.
Although the majority of these illegal conferences took place outside Europe, the European Commission – the EU’s executing body – were compelled to act because the ensuing increase in prices of LCD-containing products directly affected EU residents. For their involvement in the price-fixing scheme, Chimei, LG, AU Optronics, Chunghwa and Hannstar were fined 300 million, 215 million, 117 million, 9 million and 8 million euros respectively, amounting to a total fine of 649 million euros.
The fine slapped on each of these LCD screen makers was determined by the company’s sales volume in the EU, how long it had been involved in the cartel, and its level of cooperation with investigators. Samsung was exempted from being hit with any fine for its role in whistleblowing on the price-fixing cartel.
Investigations into LCD screen price-fixing allegations are not new to Samsung, LG, AU Optronics and Chi Mei. In August, these Asian LCD panel makers were among the companies sued by the New York Attorney General for operating a decade-long LCD price-fixing cartel which led to US public institutions overpaying for LCD-equipped goods like flat-panel televisions, computer PCs, notebooks and mobile phones.