AU Optronics Exec Gets Two Years in Price-Fixing Scheme

gotojailA federal judge in San Francisco sentenced AU Optronics Corp. executive Steven Leung to two years in prison and fined him $50,000 Monday for his role in a price-fixing conspiracy for liquid-crystal display panels.

Leung was convicted in December by a federal jury following a three-week trial as part of a global conspiracy between 2001 and 2006 with competitors to maintain the prices for LCD panels, after a glut on the market caused prices began to collapse.

LCDs are used in computer monitors, laptop display screens and smart phones.

Leung’s computer monitor division at AUO was responsible for $2 billion in annual sales, according to the government.

The Justice Department’s Antitrust Division sought 30 months in prison, while the defense asked U.S. District Judge Susan Illston to impose a one-year term.

The government argued that Leung was “vital to the success” of what became known as the “crystal meeting conspiracy” in which LCD-makers met in secret at various Taiwan hotels on a monthly basis to share production data and set prices.

“Leung organized and coordinated the crystal meetings, hosted and led the meetings on behalf of AUO, actively engaged in the process of reaching agreements during the meetings, produced highly detailed reports of pricing agreements reach at the crystal meetings and in one-on-one communications with distributors…” the government stated.

In addition, he directed his staff to charge AUO’s customers in the U.S., Hewlett-Packard Co. and Dell Computers, the inflated prices, according to prosecutors.

The defense argued unsuccessfully during the trial that Leung, director of the AUO sales division for LCDs, simply acted on orders of superiors and served as a notetaker at the crystal meetings.

A separate trial in March 2012, a different jury convicted AUO and two top executives, H.B. Chen and Hui “Kuma” Hsiung, of price-fixing.  Jurors were unable to agree on a verdict in Leung’s case, setting up his second trial in December.

Two other colleagues, Leung’s boss L.J. Chen, and co-workers Hubert Lee were acquitted at the same trial and both testified in Leung’s defense.

AUO was the only one of the companies accused of conspiring to fix LCD prices that took the question to trial.  It’s other rivals accused of antitrust violations entered guilty pleas and paid nearly $1 billion in fines, including LG Display Co., Chunghwa Picture Tubes, Chi Mei Optoelectronics Corp. and Sharp Corp.

Case:  U.S. v. Lin, 09-CR-110SI