LCD Price-Fixing Convictions Upheld

The 9th Circuit Court of Appeals has upheld a $500 million price-fixing judgment and convictions of two former Taiwanese executives of AU Optronics Corp. for fixing prices of liquid crystal display panels used in computers, laptops and flat screen TVs.

The ruling Thursday, for the first time, held the foreign involvement by Taiwanese and Korean company officials does not override the long standing rule that a price-fixing conspiracy among competitors is subject to the Sherman Antitrust law.

The appeals court found that despite the global economic reach of the LCD sales, there was sufficient commerce in the U.S. to subject the defendants to U.S. law, despite 1982 the Foreign Trade Antitrust Improvements Act amendments to the Sherman Act.

Following an eight-week trial in 2012, AUO and former President and COO Hsuan Bin Chen and Executive Vice President Hui Hsiung were convicted of a conspiracy to fix LCD prices.

The defendants were accused of an international conspiracy among six leading LCD makers from Taiwanese and Korean electronics manufacturers to fix [prices for LCD flat panel displays used in computer monitors, notebooks and flat panel TVs.

Between 2001 and 2006, the conspirators held five years of secret meetings in Taiwan, known as Crystal meetings” to set prices and production levels, the jury found.  They sold the products to leading U.S. tech firms including Apple, HP, Compaq, Motorola and Dell.

Hsiung and Chen were sentenced to three years in prison each and fined $200,000 each.  U.S. District Judge Susan Illston imposed a $500 million fine on AUO for its knowing and intentional participation in the price-fixing deal.

Since 2008, eight companies, including LG Display Co, Chunghwa Picture Tubes, Chi Mei Optoelectronics Corp. and Sharp Corp agreed to plead guilty and pay more than $1.4 billion in fines.

Twenty-two executives have been charged and 13 have pleaded guilty or convicted and sentenced to prison.  Seven defendants are fugitives.

Case:  U.S. v. Hsiung, No. 12-10492

 

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