LCD panel makers settle price-fixing claims

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Case in Point

January 10, 2012

LCD panel makers settle price-fixing claims 

The plaintiffs—several purchasers of the panels—filed antitrust class actions against the world’s largest LCD panel manufacturers, alleging the defendants had been conspiring to fix prices. Two manufacturers settled for a total of $17 million, and eight other defendants later settled for about $388 million. In re: TFT-LCD (Flat Panel) Antitr. Litig.

Liquid Crystal Display (LCD) panels are made by sandwiching liquid crystal compound between two pieces of glass. The panels are used in televisions, computers, computer monitors, and other products. In December 2006, the U.S. Department of Justice (DOJ) and regulators in other countries revealed that since January 1999, the world’s largest LCD panel manufacturers—including Samsung Electronics Co., Sharp Electronics Corp., and LG Display Co.—had been conspiring to fix prices.

Executives from the companies held monthly “crystal meetings,” in which they shared their past month’s shipments, customer demand, capacity utilization, and prices. The executives agreed on the next month’s prices and on what they would tell customers and the public about price increases. They also agreed to coordinate the number of panels manufactured to keep demand greater than supply. As new competitors entered the market, the companies would envelop them into the conspiracy.

When the executives began worrying that the conspiracy would be discovered, they stopped meeting as a group and began holding meetings in which one executive would meet with another and then each would meet separately with someone else, until all of the companies had agreed. They also had lower-level employees share information to be passed up the chain of command.

Many of the companies and executives pleaded guilty to charges by the DOJ, European Commission, Japan, and South Korea, and paid hundreds of millions in fines.

Several purchasers of panels filed antitrust class actions against the companies and their subsidiaries, and the suits were consolidated in multidistrict litigation. The court certified two direct purchaser classes: a panel class that bought panels to be used in products they manufactured, and a product class that bought a TV, computer monitor, or notebook computer from one of the defendants.

In February 2011, the trial court granted final approval to a $17 million settlement by two LCD panel manufacturers, Chunghwa Picture Tubes, Ltd., and Epson Electronics America, Inc. Eight other defendants later settled for about $388 million, including about $82.7 million from Samsung, $105 million from Sharp, and $75 million from LG Display. All of the settling defendants agreed to provide evidence against the remaining defendants, AU Optronics Corp. and Toshiba Corp. The court has granted final approval.

Suits filed by indirect purchasers who bought an LCD panel or a product containing a panel from an intermediary, such as a distributor or wholesaler, are still pending.

Citation: In re: TFT-LCD (Flat Panel) Antitr. Litig., No. 3:07-md-01827 (N.D. Cal. Dec. 27, 2011).

Plaintiff lead counsel: AAJ member Bruce L. Simon and Richard M. Heimann, both of San Francisco.

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