HannStar President Indicted for LCD Price Fixing, DOJ Says

[snipenekkid]

Soooo, for those doubters out there, there is real collusion and price fixing happening only now on a GLOBAL scale. Anyone with an ounce of sense can see it in almost all tech related areas. But here is a case where some big fish have been caught with their hands in the cookie jar, so to speak.

http://www.pcmag.com/article2/0,2817,2375730,00.asp

The president of Taiwanese display maker HannStar was indicted Thursday for his participation in a global price fixing scheme for thin-film transistor liquid crystal display (TFT-LCD) panels.
The indictment was filed in San Francisco district court and charges Ding Hui Joe, also known as David Joe, with conspiracy to suppress and eliminate competition by fixing the prices of TFT-LCD panels. The scheme reportedly took place between Sept. 14, 2001 and Jan. 31, 2006, according to the Department of Justice. By 2006, the TFT-LCD panel market was valued at $70 billion.
The investigation has resulted in $890 million in criminal fines, and overall, 22 executives and eight companies have been charged in the DOJ's ongoing investigation into LCD price fixing.

Read the article, it goes on to mention several other similar cases, heck even one where Nokia brought suits against several manufacturers.

What makes it even more vile is these companies are paying slave labor wages and horrid working conditions, no such think as a "fair wage" or even "living wages" in most every country where these devices are produced. So the profit made by off-shoring the jobs from other countries, even within places with demonstrably poor wages compared to other industrial countries, was not enough. These people had to band together to collude and artificially keep prices higher.

And this matters to ebook people like all of use because more and more tablet devices most of which will use LCD displays are going to really blow up in the market this year. Maybe now we know at least one of the artificial reason these devices are all the same price in what is claimed to be a free market. It also blow away any claims of supply and demand, not when supply can be manipulated by manufacturers along side of price fixing.

One also has to wonder if the price fixing is not retarding advances in LCD/TFT technology as well. Perhaps the financing issues and production issues Pixel Qi was rumored to be having along with getting device makers to commit to their displays has not also be a result of what is truly a non-trivial issue given the way LCD technology has become a part of everyday life for pretty much everyone in most countries.

Just thought it was interesting and especially given the introduction of more and more tablet style devices into the ereader market.

[Kali Yuga]

Originally Posted by snipenekkid

Soooo, for those doubters out there, there is real collusion and price fixing happening only now on a GLOBAL scale....

OK, and...?

Companies engage in price-fixing and other anti-competitive behaviors. I don't think anyone here says it never happens, only that there is no evidence of it in the book industry.

Originally Posted by snipenekkid

What makes it even more vile is these companies are paying slave labor wages and horrid working conditions, no such think as a "fair wage" or even "living wages" in most every country where these devices are produced....

Uh, not so much.

Taiwan is definitely not paying "slave labor wages." While I will not say that every single factory in Taiwan is a shining beacon of hope, it is a heavily industrialized nation with decent wages, universal health care, and a democratic government.

Mainland China isn't necessarily dirt-cheap either anymore. Now that they are much more industrialized, wages are rising because -- wait for it -- their economy in general is improving. I.e. China producing lots of goods cheaper than Americans is likely benefitting China and its population. How is that a bad thing?

There can often be negatives, of course -- e.g. the US is more likely to have unions and more stringent environmental regulations than Vietnam. But abuses can also happen in the US as well, as the meat-packing industry demonstrates.

Originally Posted by snipenekkid

So the profit made by off-shoring the jobs from other countries, even within places with demonstrably poor wages compared to other industrial countries, was not enough. These people had to band together to collude and artificially keep prices higher.

Nice theory, but margins on electronics are notoriously thin, and product lifespans are notoriously short.

Price-fixing also isn't always about "charging more." It's about manipulating prices to maintain control of a market -- which can mean artificially lowering prices as well as raising them.

Originally Posted by snipenekkid

One also has to wonder if the price fixing is not retarding advances in LCD/TFT technology as well.

No, one doesn't have to wonder that, because there's no evidence of it.

Pixel Qi isn't getting blocked out because they're pushing a wonderful new technology that everyone and their mother will want. It's because they are a bit player with few firm orders and not much evidence yet of a solid market.

They don't even need their own fab facilities. One of Pixel Qi's strengths is that it is largely based on existing LCD technologies, unlike eInk which is a totally different process.

Oh, and the company Pixel Qi just partnered with to manufacture their screens, Chunghwa Picture Tubes? They were nailed in 2008 for price-fixing with Samsung and LG, and are apparently mixed up in this case as well.

Originally Posted by snipenekkid

Maybe now we know at least one of the artificial reason these devices are all the same price in what is claimed to be a free market. It also blow away any claims of supply and demand, not when supply can be manipulated by manufacturers along side of price fixing.

Sure, you can believe that, if you have no idea of what's actually going on.

It is unlikely that each and every ebook reader uses the exact same components, and that each and every component is dealing with elevated prices due to rampant price-fixing.

And prices on the devices have varied quite a bit. When it was announced, Sony (remember them?) offered the Pocket Edition at a significantly lower price than the competition, and other devices at much higher price points.

Originally Posted by snipenekkid

And this matters to ebook people like all of use because more and more tablet devices most of which will use LCD displays are going to really blow up in the market this year.

Nice stretch.

But no, this really has almost nothing to do with ebooks. Especially since the price-fixing may not have had a major impact on costs or consumer prices.

Seems more like you just felt like going on some type of anti-capitalist rant this morning. I would recommend you have some coffee and relax, except that the beans are often harvested by non-union workers in 3rd world nations who get paid what would pass for slave wages if they were in the US. Oh, and coffee manufacturers also got railed recently for price-fixing.