Samsung, Toshiba, Others Accused of LCD Price-Fixing

GovTechGuy writes "Toshiba, Samsung, Sharp, LG and other major technology companies allegedly colluded to fix the prices of LCD screens used in televisions and computers, according to an antitrust suit filed Friday by New York Attorney General Andrew Cuomo. The complaint alleges that top-level executives at those firms attended secret meetings on a monthly or quarterly basis where they agreed upon minimum prices, price targets, increases and rates to be charged to specific computer manufacturers. The suit also accuses the companies of exchanging product information, agreeing to output levels and keeping prices artificially high by avoiding competition. Cuomo is seeking hundreds of millions of dollars in damages and punitive charges for the alleged overcharging of state institutions."

Comments

Not enough

[Anonymous Coward]

Also, require them to sell their crap at lower prices, otherwise they will just keep on overcharging without any more meetings.

Punish price-fixing by price-fixing, at least for a period.

Oh and while you are at it send some money to everybody that bought an LCD monitor.

Re:Not enough

[causality]

No, they can pass on that cost and people will use other parts.

Before we talk about the pros and cons of various forms of sanction against these companies, I have a simple question.

These multiple companies are being accused of colluding. That's a word for a specific type of conspiracy. Since this involves those companies conspiring together, does that mean we immediately scoff at the notion, dismiss it out-of-hand without examination of evidence, and accuse anyone who supports the notion of being a tin-foil hat-wearing nutter?

I just want a little consistency. That's how we treat anyone who suggests that people within government would conspire in some way when both money and power is involved. Why don't we act the same way when anyone suggests that people within corporations would conspire in some way when only money is involved?

Oh, right, because you can choose not to do business with particular corporations so you feel little to no need to bury your heads in the sand when they conspire. It's not so easy to escape the malfeasance of your own government, so you feel a desperate need to say that it isn't and could never be so.

Re:Not enough

[causality]

What I feel would work is make it a mandantory 2 year sentence at Leavenworth Federal Prison - Low Security the first time around. Give em hard labor and personally fine them. Increase the penalty to 5 years in the medium security section and if they're found guilty a thrid time, life in maximum security with the real dangerous criminals. Furthermore, place them in with the general population instead of the damn country club. Also in regards to the 2nd and 3rd offenses, you punish their families too.

If you or I committed such crimes personally without a corporation that resulted in the same amount of monetary loss, we would not get such light treatment as a low security prison away from the hardened prison population. Neither should the executives who create these issues.

I cannot rightly support punishing their families. If family members are proven beyond a reasonable doubt to have committed a crime, then by all means prosecute them to the fullest extent of the law. Otherwise, advocating the punishing of innocents is much worse than any fraud the execs in question may have perpetrated. In fact it's quite likely that such innocents were as deceived by the perpetrators as anyone else. You should be ashamed for desiring such an outcome, sir. This is not honor or justice. It's a smack in the face to both. You lose the right to represent either honor or justice the moment you want to harm innocents who remain innocent until proven guilty. I cannot overstate how pathological such an urge actually is.

They have to prove that the house was bought with Mom's Money instead of Daddies and may be what it takes to get them thinking before they commit such crimes.

They have to prove nothing. That burden of proof is squarely on the shoulders of the prosecution should an accusation be made. You dishonor and shame yourself for advocating such a witch-hunt. It is beneath you. If it is not, it should be. If you are so easily corrupted by outrage then you are manifestly unfit to deal correctly with injustice, for you represent what you claim to be against.

If that stings a bit, it doesn't sting enough. How do you suppose people like those execs become so amoral and corrupt in the first place? It's because they see injustice like anyone else and eventually they become just like what they hate. Take this as a warning if there is any wisdom within you.

Re:Not enough

[T Murphy]

The courts don't have to remove all profit from price fixing, just enough that companies believe they can profit more when competing. For example:

Let's say they can boost profits by 30% by colluding, but a conviction is severe enough to hurt profits 10% compared to not colluding. Now let's also say that part of the conviction penalty involves paying non-colluding competitors, so those competitors profit an extra 5% per guilty company. Given a high enough chance of conviction and a 3-company market, it would on average be more profitable if your company competes, the others collude, and they get convicted (so your company boosts profits by 10%). As long as companies act selfishly, they all want to be the odd man out, so they never agree to collude.

Of course, price fixing doesn't happen without all parties cooperating- my example just illustrates how you can use the prisoner's dilemma against companies so the optimal solution (all colluding) never happens.

Re:Not enough

[Anonymous Coward]

WTF are you talking about?

This article is about an Attorney General with enough evidence of a conspiracy to believe he can convict these companies in a court.

This is nothing like your ridiculous unsubstantiated ideas about aliens or JFK or Obama's birth certificate or Bush planning 9/11.

Par for the course

[RiddleofSteel]

Sadly this is one of the biggest problems with out country today. The biggest bane to Capitalism is a monopoly. And unfortunately almost every major product we buy be it power, automobiles, computers, food, media, etc. has a group of three or four huge companies that completely control that market. They get together and price fix, control the market, and even control the laws and regulations that are supposed to keep them in check. These types of collusion are no good except for the people at the top of these companies and their stock holders.

Re:Par for the course

[tlhIngan]

Sadly this is one of the biggest problems with out country today. The biggest bane to Capitalism is a monopoly. And unfortunately almost every major product we buy be it power, automobiles, computers, food, media, etc. has a group of three or four huge companies that completely control that market. They get together and price fix, control the market, and even control the laws and regulations that are supposed to keep them in check. These types of collusion are no good except for the people at the top of these companies and their stock holders.

Actually, monopolies are the goal of capitalism. It's the ideal end-game - to own the entire market. If you can't own it, then you'll either acquire your competition, or collude to ensure that everyone can go home with big fat paycheques and bonuses and lots of cash. And that's the goal of a capitalistic society - to earn as much money as possible.

What threatens a monopoly the most is the young startup who dares to disturb whatever nice arrangement you have making money. Which a monopoly or a collusion would go and prevent by either outright purchasing the new competition, or make it impossible for it to survive, by dumping.

Monopolies are allowed and legal, however, governments tend to institute measures to ensure that monopolies don't abuse their power (leveraging a monopoly in one area to gain it on another, dumping to drive competition out of business, etc).

Re:Par for the course

[Grishnakh]

The thing is, market forces work so that companies naturally merge to only 3 or 4 main competitors when an industry is mature. When the industry is young, sure, there's lots of smaller competitors. But as the industry matures, the poorer competitors die out, and others merge together, and eventually there's only 3 or 4. At this time, these larger companies are able to take advantage of economies of scale that smaller competitors cannot, and as the industry and technology is mature, new small competitors can't bring any new innovation to the table that outweighs their lack of brand recognition and economies of scale. We saw this in the automotive industry, and many others.

In a healthy market with a mature industry, 3 or 4 main competitors is the most efficient. The catch is, you need a decent government in place which oversees them and makes sure that they don't form a cartel or collude in any way to screw over the customers. Without any government regulation, you'll either end up with a cartel/oligopoly, or a monopoly, and then you don't have a free market at all, since there's no real competition and no choice for the consumers.

Unfortunately, the Rand-worshiping free-market fans almost always forget about the role government has in ensuring the marketplace remains a level playing field. (And those who oppose the free-market Randians want a giant centralized government that basically micromanages everything.)

Re:Par for the course

[FooAtWFU]

Capitalism is a system. Systems hate it when you anthromorphize them.

Monopoly profits may be the goal of capitalists, but when they're not colluding (or when there are low enough barriers to entry that it doesn't matter, which may not be the case here, especially with patents involved) other capitalists just stab each other in the back (business-wise) so they can get their share. Eventually, they're just making normal profits, and it's not all that interesting, so they can go off and do other things with their money.

That's the "everyman" take-away, anyway.

Re:We will see...

[poetmatt]

I hope they get around to hard drive price fixing too. It's been going on for 10 years now.

Re:We will see...

[geekoid]

Since the price of HD keeps falling like rock, I doubt it.

Time for stronger laws

[erroneus]

We need jail time for decision makers. I mean serious jail time. We have seen this over and over and over again with chips and LCDs and CDs and all manner of things like this. It's not as if they don't know it's illegal. They KNOW it is illegal. It is time to either make this type of behavior legal or to get serious about the punishment. Corporations are too often shields for unethical, unlawful, immoral, inhumane, harmful and illegal behavior. When the "corporation" takes all the risk, what is to stop individuals from persisting?

Don't confuse brands with manufacturers.

[Anonymous Coward]

You're confusing what are basically brands with manufacturers.

Many of the automotive companies you listed make cars for one another. That ends up rendering them more as brands, rather than outright manufacturers. Even then, many of them buy their parts from the same parts manufacturers, and only act as mere assemblers most of the time.

The situation is even worse with computers. Like with the automotive companies you listed, all of those computer companies merely assemble computers. They all use components made by a very small number of manufacturers. They basically just assemble them, and stick their company name on the final system. They end up just being brands for what is essentially the same product. You can buy a modern Apple laptop, or buy five older Dell laptops for the same price, and the parts inside will be virtually identical.

Re:We will see...

[sexconker]

We will see what comes out in court, although I'm holding back judgement until I see the evidence. If they are doing what the complaint alleges, then yes, fine them enough to discourage them (and others) in the future, ie: heavily. Personally I'm glad to see a bit of consumer protection going on for a change. The FTC has become pretty much useless over the last few decades.

Fine them?
This is the problem.
There is no punishment.

JAIL the ones responsible - the CXOs and board members.
FORCE the company to sell their products at government-determined fair prices or FORBID them from doing business in the US.

Problem fucking SOLVED.

Re:Good thing I bought a plasma...

[geekoid]

From my research, tis at LEAST 50%, sometime double. It's probably more then a refrigerator.
400W TV, on an average of 4 hours a day 1600 * 365 586 KW per year. A little higher then an average side by side 25cubic foot refrigerator.(about 525 KW per year

refrigerator should not be Turning on more then a 20% of the time during normal use.

They use tricks to try and hide burn in. Move the image, dim the other pixels, and so on. Both these just delay the effect.
I would rather have a TV that doesn't have burn in issues at all
They still have a horrid reflection/glare problem.

Re:now we can get to...

[jmerlin]

To offset the insane price markup on text messaging, it's going to need to cost each one of those companies some billions of dollars. They've been doing it forever, charging $5/month for 300 texts or $20/month for unlimited, when in fact it costs them $0.000000 for each text message. That markup nears infinity, it's clearly a massive scam, too bad the FCC is too busy failing in every way possible, if we had a real FCC texting would be free already. To be honest, how has this texting scam remained so long? Would charging people per e-mail while simultaneously charging them for internet service last this long?

Re:We will see...

[StormyWeather]

That's an idea parroted right off huffpo, and it's just as stupid here as it is there. If you could go after people working for a company personally then nobody would work for a company, because it would be impossible to limit your liability, and the economy would collapse.

Force companies to sell goods for a fixed price, and they just stop selling to your market therefore removing competition further, and in turn pushing their competitors prices up by artificially limiting supply.

Typical step 1 leftist group thinking.

Re:We will see...

[LordLucless]

If you could go after people working for a company personally then nobody would work for a company

Just like if you could go after a contractor directly, nobody would be a contractor? Oh wait, you can, and there are. I'm pretty much on the far right politically, when it comes to economics. But I still don't necessarily support the idea of the corporate shield. Capitalism and corporatism are two separate concepts, and one can support one without the other.

Besides, the buck should stop with those who make the decisions, not those who are forced to carry them out. Removing the corporate shield wouldn't make working for a company any more dangerous - just running one. And I think we've seen enough examples lately to know that their just plain isn't sufficient accountability at that level of corporate management - the corporate shield is being abused.