AU OUCH: Taiwanese Display Firm May Face $1B Price-Fixing Fine

September 14, 2012 by Dave Haynes

You know how LCDs used to be crazy-expensive? Apparently it wasn’t just  a reflection of manufacturing costs.

The U.S. Justice Department has asked a federal judge to slap a $1B USD fine on Taiwan-based AU Optronics Corp., in the wake of a court ruling earlier in the year that found the company guilty for its role in a price-fixing scheme.

The DOJ filing this week suggested the two executives get 10 years behind bars and pay $1M in fines.

As reported in the Wall Street Journal:

“These defendants were central figures in the most serious price-fixing cartel ever prosecuted by the United States,” the department said. “Only these sentences could possibly reflect the seriousness of this offense or provide adequate deterrence.”

The department said the price-fixing scheme, involving several Asia-based companies, “affected every family, school, business, charity and government agency that paid more to purchase notebook computers, computer monitors, and LCD televisions during the conspiracy.”

Prosecutors alleged AU Optronics participated in a world-wide conspiracy from 2001 to 2006, by which time the market for LCD panels was $70 billion.

AU Optronics, in its own court filing Tuesday, argued that the highest permissible fine it should face is $285 million, adding that the actual fine should be much lower. The company called the government’s position unreasonable and said the Justice Department wanted “to punish AUO for its temerity in electing to subject the validity of the government’s charge to the test of a jury trial.”

Most companies don’t contest government price-fixing charges in court because the potential criminal fines imposed after a conviction can be very high. Companies convicted can face fines that total twice the gains derived from the conspiracy.

The department said the conspiracy affected some of the world’s largest computer and television manufacturers, including Apple, Dell and HP.

Seven companies – including Sharp and LG – earlier pled guilty to related charges and agreed to pay fines of almost $900 million.

Sentencing for AU Optronics is scheduled for Sept. 20 in San Francisco.

In 2001, I was paying something like $2,000/unit for open frame 12-inch LCDs to stick in elevators. Hmmmm.