facebook rss twitter

Asian LCD makers fined US$56m by China for price fixing

by Mark Tyson on 7 January 2013, 17:08

Tags: LG Display, Samsung (005935.KS)

Quick Link: HEXUS.net/qabq3v

Add to My Vault: x

News has come to light that China has imposed fines upon six South Korean and Taiwanese LCD makers for price fixing. The fines, totalling $56 million, follow a six year investigation and similar legal action in Europe, Korea and the USA. In December 2010 the European Commission fined the same six companies $650 million and South Korean Fair Trade Commission fined them $180 million, so the Chinese fine seems quite lenient.

Big BOM

LCDs are major components in many products such as smartphones, in car displays, Sat-Navs, tablets, computers and TVs. Often the LCD cost makes up a considerable proportion of the device’s bill of materials. The National Development and Reform Commission (NDRC) in China investigators said that representatives from the six firms met regularly between 2001 and 2006 to collude over pricing levels. The six companies cited in the case; LG Display, Samsung, Innolux, AU Optronics, Chunghwa Picture Tubes and HannStar sold 5.15 million panels and gained a combined $34 million in “illegitimate profits” according to the Chinese investigators.

China’s NDRC issued a statement on Friday saying that “When selling LCD panels in mainland China, the enterprises involved manipulated market prices based on prices agreed on and information exchanged during their meetings. This has harmed the legitimate rights of other manufacturers and consumers.”

A number of the companies fined have already officially responded. LG Display issued a statement saying that it “remains committed to operating with full transparency in providing the best quality products and services to its global customers”. Meanwhile a Samsung spokesman said the company will strive to “root out” activity related to collusion. Thanks guys!

History repeats

In a similar case, only a month ago, we reported on the European Commission (EC) ruling which imposed hefty fines on several producers of CRTs found guilty of price fixing between 1996 and 2006. The CRT price fixing fines were given to companies including Philips, LG, Panasonic, Samsung, Technicolor and Toshiba

(All monetary figures above have been converted to approximate US dollar values)



HEXUS Forums :: 6 Comments

Login with Forum Account

Don't have an account? Register today!
inb4 EU evil-socialist money grab… oh wait, it's China, it's cool then.
It's quite frustrating that these fines only serve as a deterrent to put them off doing it again, and we end up with no compensation for the price fixing, in fact we'll end up paying for it again.
At least it's not important drugs or essentials I suppose…
I'm no economics major, but if they don't like the price then why don't they get LCD's elsewhere? Then that would make price fixing pointless as they would have to change the price anyway.
zap117
I'm no economics major, but if they don't like the price then why don't they get LCD's elsewhere? Then that would make price fixing pointless as they would have to change the price anyway.

generally price fixing would only work when you cant get your items elsewhere. however, this is true in a fair amount of hi tech hardware sectors where barriers to entry are high and no-one else can get in to offer more competitive prices.
Where does the money for the fines go ?

To the consumers? who, at the end of the day are paying for the price fixed items, I think not