Thin Screen TV Makers Investigated for Antitrust Violations

Cincinnati, OHSeveral makers of thin-film transistor liquid crystal display (TFT-LCD) televisions and monitors are under investigation for breaking anti-trust laws by allegedly fixing the prices of their televisions.

The investigations are being carried out by the United States Department of Justice, Korea's Fair Trade Commission, and Japan's Fair Trade Commission. Companies involved include Sharp Corp., NEC Corp., Chi Mei Optoelectronics Corp., Samsung, and LG Philips LCD. Other companies may also be involved in the investigation.

The investigation into LCD makers involves fixing the prices of the monitors in order to prevent the prices of LCDs from dropping too quickly. Electronics manufacturers had become concerned lately that the prices of LCD products were falling more quickly than was initially expected.

In addition to the investigation, a lawsuit has been filed against LG Philips LCD Co., Inc., in New York on behalf of shareholders who purchased or acquired the securities of that company between July 16, 2004, and December 11, 2006. The lawsuit, which is seeking class action status, alleges that officers of the company violated securities laws by engaging in anticompetitive conduct in order to increase the prices of its shares.

TFT LCDs are used for many electronics products including flat-panel televisions, laptop computers, and flat-panel monitors.

Price fixing occurs when businesses that are in competition with each other make agreements regarding the pricing of services or products they sell. Usually it involves pushing the price of a product up so that the businesses can make a profit. Some examples of price fixing include selling a product at the same price, setting the same minimum price, and limiting discounts.

In the United States, price fixing is illegal and is prosecuted under section 1 of the Sherman Act. However, price fixing can also be a violation of antitrust laws. Both the United States Department of Justice Antitrust Division and the United States Federal Trade Commission enforce federal price fixing laws. Additionally, some states have antitrust offices and can charge companies with antitrust offences.

Settling charges of price fixing is not a cheap matter. In another recent case of price fixing, this one involving Samsung and other computer chip makers, Samsung agreed to pay $90 million to settle charges in 41 states. That $90 million does not include Samsung's settlement with computer makers and other direct buyers. The states have not yet agreed on how the money will be distributed to Samsung's customers.

Additionally, three Samsung executives were sent to prison in relation to the price fixing charges. Five of the companies involved in this instance of price fixing settled for $310 million. Two of the companies have not yet gone to trial.