Last week 3 leading flat-screen producers -- LG Display (Korea), Sharp (Japan), and Chunghwa (Taiwan) -- pleaded guilty to fixing the prices of LCD panels and agreed to pay $585 million in fines. It was a settlement made with the Justice Department's antitrust division, which includes the companies' cooperation in the department's continuing investigation. Similar investigations are being carried out in other regions of the world.
Like many other businesses, the prices of LCD products have been falling rapidly. Apparently the cartel was set up to slow down the rapidly declining rate, and to allow the companies to "protect profits in a very difficult market." The price-fixing affected the prices of thousands of products, especially those of Dell, Apple, and Motorola. Companies who've purchased LCD panels from the three are filing their own class-action lawsuits.
I understand that in this environment, a company may be desperate to hold on to whatever profit they can. But cartels are (at least according to the article) the be-all and end-all of economic dastardly deeds because of how bad they are for consumers. The Supreme Court calls them the "supreme evil of antitrust." You'd think that companies would think twice before engaging in activities that the law has absolutely no allowance for. Also, the fine ($400 million paid by LG alone) is enough to wipe out any profits made by fixing prices. The article hints that even more fines could be placed on them, since investigations are still ongoing. I wonder what the reasoning was behind these companies' decision. Perhaps the deregulatory pro-business attitude of the previous years gave them the confidence to do so? Who knows.
No comments:
Post a Comment