Panel maker cartel hit with hefty price fixing fines

Some of the biggest players in the panel business have been found guilty of price fixing, with fines being handed to Samsung, LG Display and others by South Korean authorities.

The Korean Fair Trade Commission has landed the firms, which also include AU Optronics and Chimei Innolux, with fines totalling $175 million.

Though this figure is likely to come down once factors such as cooperation in the investigation into pricefixing are taken into account, it is significant ruling against the firms which account for around 80 percent of the world’s LCD panels.

According to the FTC the panel makers had colluded on minimum prices, pricing policies, timing of price increases and a ban on cash rebates between 2001 and 2006.

It was found that around 200 secret meetings took place over the course of six years to keep prices artificially high, and to confer on sales strategies.

This was bad news for customers as the cartel carried out meetings that they were fully aware contravened Korean laws.

It was Samsung, which had its Japanese and Taiwanese units investigated, that was hit the hardest with a $87.4 million fine.

LG Display was received a $58.9 million fine as the Korean authorities handed its harshest penalties ever for a price fixing probe, writes Taipei Times.

It is not the first time that Asian LCD makers have been found guilty of underhand pricing tactics.  A similar probe was conducted in the US and this appears to have opened the way for more action against the global suppliers.

In an EU investigation last year fines were handed out to some of the same culprits, while price fixing revelations in the US led to prison sentences being handed out to executives.

With the current state of the panel industry Display Search analyst Paul Gray says that it is likely that such practices have been largely stamped out.

“There have been several cases in the past so it is not a big surprise that different jurisdictions have brought charges against the companies involved,” he told TechEye.

“In the past the temptation was to price fix when things got difficult, but if they are price fixing now then they are doing it in a very costly manner.  This is because many companies are selling at just material prices due to the state of the panel industry.”

“Samsung , LG Display and others are all losing money and it is a very difficult time for the industry as demand drops.  While price fixing certainly occurred in the past it would be a bit of a conspiracy theory to say that were doing it in these conditions.”

“The evidence is that everyone is really suffering at the moment.”

“Currently firms are having to idle-off capacity, for example doing maintenance work on weekdays rather than weekends or holidays.”

“Yes they got caught, and yes people have gone to prison over it, but it seems that now they have cleaned up their act.”