LG, Sharp plead guilty to LCD price-fixing, take $585m fine
By Nilay Patel 
posted Nov 12th 2008 3:37PM
posted Nov 12th 2008 3:37PM
Allegations of LCD price-fixing have been swirling around for years now, and it looks like at least some of the companies involved have dirt on their hands -- LG, Sharp and Chunghwa Picture Tubes have all just pled guilty to price-fixing in a case filed by the US Department of Justice and will pay a combined $585m fine. LG's taking the biggest hit at $400m for conspiring to fix prices from September 2001 to June 2006, while Sharp's on the hook for $120m for jacking prices on panels sold to Dell, Motorola and Apple during the same time frame. Naughty, naughty. It also sounds like this plea agreement is more than just a sterile attempt to cut losses -- Sharp's exec staff is taking a 10 to 30 percent pay cut for three months as punishment to reassure its shareholders. Sounds like a plan -- how about refunding some of that cash to us chumps out here buying your overpriced products?
Apparently after a quick Wikipedia search, price fixing means that companies agree to sell a similar product (in this case LCD TVs) at a similar price so the consumer has no choice of what to buy since the prices are the same.
Sounds like gouging to me. Gouging is bad so nail their ass!
aka collusion
good thing i returned my lg set...
With that in mind, any price drops? >:)
Probably no chance of price drops, when these kinds of charges come to court the alleged price fixing usually happened 2-3 years prior so within those 2-3 years the companies generally don't risk price fixing, ao for that time it's a market with all the usual competitive pricing.
As much as I am happy for this win, the hypocracy is amazing.
How about fining Apple for fixing the prices of their iPods, computers, and pretty much anything else they sell?
What about Texas Instruments and the TI-83/84 calculator that 95% of the US high school population is required to use in class? It still sells for $140 even though its based on technology from 1996!
@Shadow08
What you're talking about is a Monopoly, where the company in question is able to charge significantly more than their competitors without losing sales because they're the biggest game in town.
This is more like if Apple, Microsoft, and Sandisk got together and agreed to sell their MP3 players at $1000 each no matter what so that the consumers wouldn't have a cheaper solution and the companies wouldn't have to deal with a price war.
Actually, a monopoly is when they are the ONLY game in town, not just the biggest.
I'm glad to see they are getting what's coming to them, but I can't help but wonder, how much did that price fixing make them? I'm sure it's more then the fees, even when you take cash depreciation into account....
@chefgon_ign:
1. Even if Microsoft and Apple don't cut their MP3 player prices, we still can get (way more better quality) MP3 players from such companies like iRiver, Cowon, Samsung, and more...
2. When it comes to the LCD business, Samsung is an indisputable leader which supplies most of LCD components/panels the world needs.
All in all, I don't think this fine for price-fixing is fair...
@Shadow08- at my school one student was allowed to use a DS with a TI-83 emulator because it was cheaper than the real thing and he was in a tight spot financially(and it was- the DS was given to him, the flashcart was $30 with 1G microSD, and the emulator was free with the ROM coming from the teacher's TI-83 compared to buying one for $140). Of course the teacher would look the other way when he switched to a game after finishing all his classwork...
i suspect price fixing between the mobile phone carriers in the US.
whew...love that token punishment to the execs for getting in trouble. Here in the US we just give them bonuses and send them on vacation.
yeah but atleast its a shitty 4 and 3/4 star hotel....no 5 star hotel for those lying execs
"Sounds like a plan -- how about refunding some of that cash to us chumps out here buying your overpriced products?"
Only LG thing I eve had was a phone, and I have to say that it was fucking overpriced for what I got.. Luckily I sold it and went back to my 5 year old Nokia - which beats the crap out of the LG - and am patiently waiting for the Touch HD to reach my stores :p
everything LG i have ever owned (a couple phones and a couple TVs) has been top quality stuff.
I am glad they got nailed for the scummy stuff.
On a tangent, where I live LG is using a dead woman (Audrey Hepburn... serously) to promote their higher-end touch-panel phones.
for shame.....
As is we needed any more reason to buy Plasma over LCD.
Yeeeaaaaaah... I think LCD won over Plasma a while ago...
Was it even a war?
Probably a civil war.
LCD won in sales, that's true. But Hyundai sells way more cars than Porsche, and I think we know which company makes better vehicles. You may want to do a little research on your own, and I don't mean looking at sales numbers. Take a look at the most recent HDTV faceoff in Home Theater magazine. You'll see a KURO sitting comfortably in the #1 seat followed by a VIERA. It's a shame that LCD continues to outsell Plasma. It just goes to show that your average consumer doesn't really know anything about the product he/she is buying.
The average consumers doesn't care about the difference between LCD and Plasma, nor can they tell the difference. There are good Plasmas and good LCDs. You can get shitty versions of both.
@Loban
Ohhhhh... sorry for not searching wikipedia before I spout stupid things on stuff I don't give a crap about.
Mugging tens of dollars from a business man "jail for three months as punishment"
Mugging tens of millions dollars from almost everyone with a PC "10 to 30 percent pay cut for three months as punishment"
PWNED
Before you say that, think about where does the money used to pay the fines come from...
That's right, from your own pocket.
"PWNED" would be more suitable in this context, so PWNED.
some wuss caved on interrogation...
US Department of Justice: "are you colluding?"
LG: "F-NO!"
SHARP: "Say what?"
Chungawunga: "No way!"
simple as that... just lie.
yeah, cuz that exactly how criminal investigations work:
"Hey, did you kill that guy?"
"nope"
"OK, that's good enough for me. Thanks for coming in."
You would think these wanks would have learned from Samsung's memory fiasco. Proof that the penalties for collusion are not strong enough. I say don't buy their crap and support their competitors.
Bizzare, I resarched my tv of choice, a 32" lg thouroughly, and it was the best value product i could buy. I'm in the uk though, so maybe we were not affected.
$585 million?
Here's an idea. If we can find 1,000 companies that have done US consumers wrong over the past decade, we might be able to pay off that $700 billion after all.
Dirty bastards. I think there should be a percentage of gross assets of the company fined, not just a big number that we think is huge but for the company is a drop in the swimming pool. And 10 to 30 percent for the CEO? WTF? That's barely even trying.
Life's Not Good!!
Cheap LCDs here I come!
Yes, let's not make the wealthy pay more taxes. Because by gosh, they are just such honest people trying to make a living like everyone else. Just because they make millions of dollars per year and live completely unsustainable lives, doesn't mean they are bad people, right? :/
I hope this will lead to a drop in price for LCD panels and an all out war between the Plasma makers. I've go my eyes on that 58" Panny.
you and me both. 58" is like the final price frontier. I wish they would come down. I hear in march they will.
Thanks for the knowledge inteller. We both have our eyes on that 58" Panny with the THX I see. If I'm still around, better yet, if we all survice this meltdown in the economy lets hope we'll all have a job and the prices will drop to under 2 grand.
So they overcharged us and we paid for it now they are going to pay the government a fine? Why don't they just pay the court fees to the government then issue a small rebate for every product purchased so that the people that actually paid too much get the money back?
I don't understand this. What about all the other companies that produce LCD's? Samsung? Sony? Panasonic?
Its not like Sharp and LG are the only two who produce LCD's.
LG and Sharp as singled out because they make the components for LCDs which every other company buys from. If I'm correct, Samsung makes the components as well. But Sony, Panasonic, and others come up with the specs and then companies like LG and Sharp actually either make or provide the guts of the panels. I think also that for a long time Sony's tvs were basically Samsung made, however didn't they just sign a deal with Sharp recently?
Okay, so US cell phone companies are BLATANTLY price gouging. For example, text messaging rates have gone up with ALL the major cell phone companies. We all know it. What now?
Take away 50% of the exec's salaries, then they might think twice about price gouging.
Take that!
You only get $700,000/mo for the next 3 months!
That'll show you!!
Instead of fining them and the government getting pissing away the money on beer, hookers, and corporate bailouts, how about ensuring they invest in next generation technologies. Or at least diverting the $585 from going to the government and instead going into R&D or helping startups with next generation promising technology?
In all likelyhood, they were investing the extra profits in future technologies... however, the R&D is locked up in intellectual property and no one will benefit from any of it until 2 years after LG and Sharp have made their next billion dollars off of it.
So when is the justice dept going to come down on the RIAA for colluding? I know that charges have been brought up on them before for price fixing, but it seems like they still get to have their cake and eat it too. I mean, they've kept music prices fixed since CDs came out and now that Bush signed that legislation allowing them to rape the consumer even more by confiscating all their electronics and levy insane fines for file sharing.
none of this means a thing unless the consumers get a refund for buying the over-priced units.
and when they go bankrupt a couple years down the road we can give them a bail out so thier execs can go on vacation, than theyll ask for another one after they get back from the break cause the money is somehow gone already and they will get it.
pay the amount to who? they people they ripped off, or the government that rips the people off?
I will keep this in mind when purchasing a new device.
ie. I will be damned if I buy a Sharp or LG product in the near future. I rather pay more.
ummm...the whole point is that ALL of the prices are the higher prices. (the nature of price fixing)
@chefgon_ign:
Sounds like you don't know what you're talking about!
1. Even if Microsoft and Apple don't cut their MP3 player prices, we still can get (way more better quality) MP3 players from such companies like iRiver, Cowon, Samsung, and more...
2. When it comes to the LCD business, Samsung is an indisputable leader which supplies most of LCD components/panels the world needs... Without a market leader's help, the price-fixing is virtually impossible...
All in all, I don't think this fine for price-fixing is fair... stupid nationalists at USDJ are just picking on wrong guys!