Korean LCD maker LG Electronics Inc agreed on Thursday, July 12th, to pay a sum amounting to $380 Million to arrive at a settlement of the civil lawsuit filed several years ago over the alleged price-fixing scheme. In the late 90s through 2006, there has been a large-scale conspiracy that happened in the booming LCD market involving several major manufacturers and key players in the industry.
When participants on the same side of the market agree to buy or sell a service, product or commodity at a fixed price so that they can have control over the supply and demand, that’s a crime in a form of price fixing. More often, companies do this to be able to sell products at a higher price bringing considerably huge profits to participants.
While there is no information as of the writing of this report to show which company had a bigger bite of the profit from the reported conspiracy, looking into the amounts ordered by the court to be paid by the conspirators would actually give us an idea.
Aside from LG, Toshiba Corp. and AU Optronics Corp. also received orders to pay certain amounts and U.S. District Judge Susan Illston in San Francisco will be the one to approve the deals as follows;
LG Electronics Inc – to pay $380 million
AU Optronics Corp – to pay $170 million
Toshiba Corp – to pay just $21 million
Other players in the conspiracy which already pleaded guilty and reached settlement earlier this year include Sharp, Samsung, and Hitachi. The court expects over $1 billion total in settlement which is the biggest in history of price-fixing cases.
The plaintiffs in the said case are the people who have bought computers or television sets during the years that the conspiracy was in operation; they are called by court as ‘indirect purchasers.’ Direct purchasers are the second class in this case which include retailers or others who have also bought products directly from the companies in question.
With the government setting its focus on large companies nowadays, it is almost impossible that a price-fixing scheme as large as this would happen again. But at least, the people now know why the prices of LCD monitors and TVs about a decade ago are too high.