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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."
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.
Tequila: It's not just for breakfast anymore!
In areas where prices are dropping rapidly its interesting that they are able to find price fixing. It used to be memory now I guess it's moved on to screens.
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.
Whose ass do you have to sue to get some highres monitors around here?
Did you know that "FTW" ("for the win") is a direct translation of "Sieg Heil"?
such as any telco company, VOIP termination provider, or even gasoline?
agreeing to output levels and keeping prices artificially high
Sounds familiar.
THL phish sticks
This is great. Hopefully in the near future we can address price fixing in everything else, like text-messages, internet service, cell phone service .... etc etc etc.
What happened to trust busting?
Are they at it again? Apparently it's worth it! ... 2008 -
http://hardware.slashdot.org/story/08/11/12/215212/3-Firms-Confess-To-Fixing-LCD-Prices-Agree-To-Pay-585M-Fine ... 2009 -
http://hardware.slashdot.org/story/09/03/11/2228206/Hitachi-Fined-31-Million-For-LCD-Price-Fixing
http://hardware.slashdot.org/story/09/12/12/0114248/860-Million-In-Fines-Handed-Out-For-LCD-Price-Fixing
>>>Punish price-fixing by price-fixing, at least for a period.
(1) That's unconstitutional. The New York Constitution does not grant such a power as "price fixing".
(2) There's no need for such extremes. When the record companies were caught price-fixing CDs (thereby forming an illegal cartel), they were ordered by the courts to refund ~$25 to all their customers, so that erased any illicit profits they had earned.
(3) And then the free market was left to its own devices, and the cost of CDs plummeted from $13 to $9 within a year, since the cartel was no longer allowed to operate. The same will happen to LCDs too, after the price-fixing cartel is broken-up.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Under fixed prices, they could worry less about lowering prices and instead concentrate on quality and eliminating dead pixels.
But what we see instead is cut-throat competition on price that lowers quality. The same thing happened to the airlines after deregulation. Under regulation, prices were fixed. They now compete on price only and quality has suffered.
Sometimes competition on price can be destructive. Jobs are lost, quality suffers, and ultimately monopolies emerge after competitors have been driven out of business.
And higher power use
On the order of 30-50% higher than an LCD. Not exactly an enormous difference; most people would never see the difference in their electric bill as the consumption would still be drowned out by their refrigerator.
screen burn in(which is not fixed just covered up)
Not much of an issue on any plasma made in the last 5-10 years. The manufacturers have been aware of the problem and implemented several techniques to pretty well reduce the rate of burn-in to negligible; more LCDs have dead pixels now than plamsas have burn-in.
and reflections worse than any CRT ever had
I don't know what kind of lighting you were watching a plasma on back in the 90s, but that issue has been pretty well quashed as well. Sure, they need glass fronts as opposed to the LCDs with their plastic fronts, that is a requirement for the gas pressure. But we do have more than one way to make glass now...
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
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?
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.
In theory perhaps, but it could be a bitch in practice. Manufacturing costs are ultimately at the whim of commodity prices, which in case you haven't noticed, have in some instances been quite dynamic with the current financial turmoil. Should the combined price of raw materials go up to the extent that it is no longer possible to manufacture a product and still make a profit the obvious step for a manufacturer to take is to scale back production and concentrate on other, more profitable, product lines. Net result is that product availability goes down, retailers who are not going to be bound by the court imposed price ceilings,will almost certainly push the prices up to make a quick profit, and ultimately the customer will end up the loser.
UNIX? They're not even circumcised! Savages!
(1) That's unconstitutional. The New York Constitution does not grant such a power as "price fixing".
The court could certainly order that they retain only a certain percentage markup on their products for a given time, to be verified with inspectors double-checking their books.
(2) There's no need for such extremes. When the record companies were caught price-fixing CDs (thereby forming an illegal cartel), they were ordered by the courts to refund ~$25 to all their customers, so that erased any illicit profits they had earned.
You're joking right? That settlement was a COMPLETE FRAUD. Customers who had bought 5-6 dozen music CD's over a decade, at $10+ overcharge per CD, were ripped off with a measly $25 voucher to BUY MORE OVERPRICED PRODUCT. The MafiAA companies pocketed the rest, flipped the bird at the artists they regularly rip off, and laughed at how fucking stupid our legal system is.
(3) And then the free market was left to its own devices, and the cost of CDs plummeted from $13 to $9 within a year, since the cartel was no longer allowed to operate. The same will happen to LCDs too, after the price-fixing cartel is broken-up.
Have you seen the prices lately? Pretty fucking uniform - Walmart, Bestbuy, Amazon, all seem to have exactly the same price (or somewhere within 50 cents of each other) on every goddamn CD again, and new releases are hovering steadily around $18. It sounds more like the MafiAA cartel laid low for a few years and went right back to their old tricks again.
To me it's obvious that LCD companies got sued because no large US company holds substancial interests in glass substrates design and manufacturing.
Very few US companies hold substantial interests in manufacturing anything these days, except maybe military hardware.
>>>That settlement was a COMPLETE FRAUD. Customers who had bought 5-6 dozen music CD's over a decade, at $10+ overcharge per CD
The overcharge was estimated by the court to be $3 per disc. So if you got a $25 refund that covered the overcharge for eight-and-a-half discs. Yes there were some people who bought more than 8.5 discs, but there were also people who bought zero discs (like my mom) and were still eligible for a refund. It all averages out.
AND it punished the companies with a several hundred million dollars loss.
.
>>>were ripped off with a measly $25 voucher to BUY MORE OVERPRICED PRODUCT
False. I got a check, as did my mom, brother, and my two nieces. The checks were converted to CASH. Maybe you should not make false assumptions about something you known nothing about. It was a true refund.
Likewise when Paypal got in trouble, I received a Cash refund of $75 due to a court order. Not a voucher - actual money.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
I'm posting this from a 1920x1200 24" monitor that I bought three years ago for about $200.00. Almost nobody makes an affordable display with more than 1080 rows any more. You can blame HDTV for it, monitor manufacturers would much rather sell computer users the HDTV screens they are already making than create computer-specific resolutions. Before HDTV, monitors were on a steady march to higher resolution, after 1080p became popular, monitors backtracked and have been stuck ever since.
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.
The Kruger Dunning explains most post on
Whose ass do you have to sue to get some highres monitors around here?
Forget it.
The only way that's going to happen is if the pixel count gets magically quadrupled, so you can immediately jump from 1900x1200 on a 24" monitor to 3800x2400.
Any intermediate solutions simply wouldn't work due to issues with scaling existing content. Read: it would look like blurred shit. If you don't want to scale things up in size and keep everything 1:1, then tough luck, because it would require perfect vision and strain the eyes, which would make it inaccessible for the vast majority of people out there (and even then, there are limits). I have a 22" running the bog-standard 1680x1050, and to be honest, sometimes I wouldn't mind having a 24" with the same resolution for extra comfort, after a long day of work...
Scale up: looks like shit
Don't scale up: include a magnifying glass with the monitor
Now, if the pixel count gets quadrupled, then you can keep everything displayed completely the same as now, have the OS lie about resolution and scale everything internally, but also add some new API functions to allow apps to draw certain things (such as font glyphs) at the true native resolution. About seven to ten years later (!), you could consider the transitions successful because all monitors sold would be high-res, all maintained software would have been written to make use of the new API, and all toolbar icons would have been quadrupled in resolution as well.
Unfortunately, you'd still have the issue of graphics on the web, so you'd also need a new image format that would hold a low res and a high res version, and if you said something was "300px" wide, it would technically be a lie, but never mind that.
In conclusion, it's not going to happen, and you can forget it :)
The thing is, market forces work so that companies naturally merge to only 3 or 4 main competitors when an industry is mature. ... 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.
So far so good...
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.
And there's where you disconnect from both your own argument's internal consistency and what the "Rand-worshiping free-market fans" claim.
The catch, for the cartel-seekers, is that in order to screw over the customers they have to raise prices. And THAT over-compensates for the economies of scale and lack of opportunity for competition on innovation in a mature market. Once the upstarts start up they have to drive the prices back down to keep from being hamstrung.
Meanwhile the upstarts have second-mover advantage: They don't have to make all the design and market-choice mistakes and incur all the related costs that the established players did. Meanwhile a market never REALLY matures - science and technology march on even when the current market players aren't incorporating the incremental and breakthrough improvements. When building new plant it's about as easy to design for the latest-and-greatest as to replicate a former decade's technology - and it may actually be cheaper. Once the new guys are playing the old ones are stuck with aging plant that needs replacement or an expensive retrofit.
So, in the absence of some anticompetitive externality the lifetime of a monopoly or cartel that engages in gouging is limited. It recreates the conditions that lead to the rise of new competitors.
The fly in this ointment (as a previous poster has pointed out) is the government. By a number of mechanisms it can (and tends to) favor the existing players and raise the barriers to the entry of new competitors - or even prescribe a monopoly. THAT's what allows cartels and monopolies to gouge for long periods.
A monopoly or cartel that doesn't mistreat its customers can continue to exist for a long time. Example: Alcoa. It had an effective monopoly on aluminum production for decades - mainly BECAUSE it priced its products low, treated its customers well, and focussed on improving its processes rather than playing zero-sum games to transfer its customers' wealth to itself. Thus competition was both unnecessary to achieve the benefits of a competitive market - and (until post-WWII demobilization enabled Reynolds and Kaiser) market forces drove investment to other areas where more value-added was available.
The problem isn't monopoly per se - it's COERCIVE monopoly. And the main source of coercion (especially coercion that limits entry to markets) is government action.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
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.
It is a miracle that curiosity survives formal education. - Einstein
I think this is a good approach, personally. A much more significant and lasting punishment for the crime.
Question is, how long to punish? I think it would only be fair to force them to sell at a lowered price for the same duration they sold at jacked up prices. If they go out of business, tough shit. Should have thought about the consequences of the actions.
And yes, everyone who bought an LCD during those dates should either receive a reimbursement equal in % to what they were overcharged, or receive a coupon for that % off a purchase of any new LCD from that company that they buy.
No more light slaps on the back of the hands, corporations need a solid punch in the gut for pulling stunts like this.
There's one thing that needs to take place if you want a truly effective deterrent.
All top-level executives who supported this collusion need to be personally conviced of fraud in a criminal court. I'm guessing that fraud on the scale of multiple millions of dollars would land them some hard time in a maximum-security prison. Fraud is fraud even if the criminal who perpetrated the fraud did not directly receive the money out of which the victims were defrauded (i.e. it went directly to his/her corporation).
What needs to end NOW, and in fact is long overdue, is to remove the "untouchable" status of the people behind the scenes. If we did that, I personally wouldn't care if the corporation itself is fined or not because we'd be taking the punitive measures directly to the source of the problem. By contrast, a heavy fine proportional to the crime that is levied against the corporate entity might end up harming customers and/or rank-and-file employees who had no decision-making input regarding whether or not massive fraud was going to be committed.
The "limited liability" nature of a corporation should be for failed business ventures and unintentional negligence only (i.e. honest mistakes). It absolutely should never apply to intentional, willful criminal activity.
It is a miracle that curiosity survives formal education. - Einstein
If only OPEC could be held to the standards of everyone else...
Bye!
>>>(2) There's no need for such extremes. When the record companies were caught price-fixing CDs (thereby forming an illegal cartel), they were ordered by the courts to refund ~$25 to all their customers, so that erased any illicit profits they had earned.
If you really believe they came anywhere NEAR paying out what they gained by even just the five years of price fixing that they got caught for, you're delusional. The industry shipped over one billion units in the year 2000. Their settlement of 64 million cash to consumers and 75 million in CD's (at a likely actual cost of a few percent of the 75 million) distributed to non-profit organizations was nowhere near the billions they profited.
And just because when they came up with a lower price fix eventually thereafter is hardly evidence of the 'free market left to it's own devices' adjusting correctly. You'd have to be a total tool to believe these things.
The bottom line is that at least two of these companies (Samsung and Toshiba) were directly involved and found guilty of memory price fixing at least once in recent times by multiple courts, and neither the governmental remedies nor the supposed hand of the free market impacted them enough to stop them from doing it again with LCDs. Nothing will stop them and millions of other companies from continuing to screw the consumer in the future. Your premise fails in both theory and application.
One of these days I'm going to cut you into little pieces. - PF
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 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.
It is a miracle that curiosity survives formal education. - Einstein
For what it's worth, yes, they gave out checks. I got one as well. But then I was young, single, and working on my CD collection. I literally spent thousands of dollars in those years on music CDs. I know of many others who spent as much or more, and did not find out about the settlement until it was too late to file. By your own admission, they overcharged 10$ per CD. The RIAA's own figures say they shipped 1 Billion units in the last year covered by the suit, 1999-2000. And the cash settlement was 64 million. So that's 64 million out of ten billion. You make my argument for me.
One of these days I'm going to cut you into little pieces. - PF
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.
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