The Justice Department announced the second-largest antitrust fine in U.S. history today as LG Display Co., a South Korean company that manufactures liquid crystal displays for televisions, computers, and cell phones, agreed to pay $400 million for participating in an international price-fixing cartel.
Chunghwa, a Taiwanese company, agreed to pay a $65 million fine for colluding with LG and other unnamed companies to fix the price of LCDs sold worldwide, the department said. In separate conspiracies, Japan-based Sharp Corp. agreed to pay $120 million for scheming to fix the price of LCDs sold to Dell Inc., Motorola Inc. and Apple Computer Inc.
Thomas Barnett, the head of the Justice Department’s Antitrust Division, called the investigation “very much an ongoing effort” and said he expected the prices of the popular displays to drop. LCD screens are a $70 billion worldwide market. LG reported $15.3 billion in revenue for 2007, and Chunghwa $4.8 billion. Sharp recorded $34.2 billion in revenue, including $6.8 billion from LCD sales, in the last fiscal year.
“These price-fixing conspiracies affected millions of American consumers who use computers, cell phones and numerous other household electronics every day,” Barnett said.
The criminal information filed in the cases today in U.S. District Court for the Northern District of California covers five years, from 2001 to 2006. Barnett said representatives from LG and Chunghwa held “crystal meetings” with unnamed individuals and companies in Taiwan, Korea, and the United States, during which the parties agreed to a predetermined price for LCDs. In meetings here and in Japan, Sharp did the same for LCDs to be sold to Dell, Apple, and Motorola, which purchased Sharp’s LCDs for use in its fashionable Razr mobile phone.
If approved by the federal court in San Francisco, the fine against LG will be second only to the $500 million fine handed down against Swiss pharmaceutical giant F. Hoffmann-La Roche Ltd. in 1999 for fixing vitamin prices.