Guest post by Current and former executives from LG, Chunghwa, and Sharp have all agreed to plead guilty to various charges of fixing the prices of TFT-LCD screens. The executives will face six to nine months in jail, pay $20,000-$50,000 fines, and have also agreed to help the United States government in other LCD price fixing investigations. The companies themselves are ending up having to pay criminal fines to the government of $585 million, collectively. It was mentioned that Sharp was fixing the prices of LCDs sold to Apple, Dell, and Motorola. Hopefully this means that the prices of technology utilizing LCD screens is going to drop from this point onwards, but in times like these, you never do know.
What’s wrong with price fixing. LCDs are not monopolies like water or telecom companies. Nor are they any kind of infrastructure where they can lockin users. LCDs are a commodity product. I say let them pricefix to their hearts content.
Another company is free to push for lower prices to gain marketshare. Components that utilize LCDs might also be interested in lower prices and would push and play LCD manufacturers against each other.
Please make an effort to read the article before you comment. Price fixing means that you talk to the competition and agree to fix a certain price so that buyer can’t play them off of each other. For instance, from the article, “an LG employee…conspired with unnamed employees from other panel makers to suppress and eliminate competition by fixing the prices of TFT-LCD panels” In industries that have a relatively small number of manufacturers (e.g. LCD manufacturers) this becomes akin to a cartel or even a monopoly – as far as pricing is concerned.
I know what price fixing is. I just don’t see anything wrong with it.
I agree. Fundamentally this is a property rights issue. The government has no legitimate role in telling an individual or group of individuals how they can utilize or transfer their property so long as their actions do not infringe on another’s property rights. Unions price fix all the time and you rarely hear anyone in government complain about that. In fact they often pass statute to give their actions greater weight.
It creates an illusion that there is no monopoly on the market.
So you don’t mind monopolies? A cartel and a monopoly are essentially the same problem, they are just structured differently.
No, I have no problems with monopolies as long as they are not granted special privilege by the government.
Telecom, electricity, water… all get special privilege from the government to operate. So, those monopolies MUST be controlled.
Beyond that, I have no issue. I mean, especially with such a commodity item as LCDs. LCDs are not even part of infrastructure (Networking, OS…) They are a commodity product.
There MIGHT be a case if they collude to price the item below the manufacturing cost to drive out any competition. But if they’re price fixing to keep prices high… I have no issue with that. It just leaves room for competitors to step in. If they priced it too high, HP, Apple.. have plenty of money to setup their own LCD factories.
Out of curiosity, what country do you reside?
Canada
Don’t steal.
The government doesn’t like competition.
Look at DRAM now. Yes they price fix it long ago to get the profit, for what i thought they deserve. A few billion dollars.
And now they lost 10 billions dollars.
They get government intervene with price fixing. ( As if the LCD / DRAM market is not competitive enough ) .
And they get government funding when they lost money.
What is happening with Free economy? May be government should run everything?
“They get government intervene with price fixing. ( As if the LCD / DRAM market is not competitive enough ) ”
Er, do you understand what price fixing is? If there’s price fixing among the major players then the market isn’t competitive.
since when 10 billions aren’t “a few billions”
Of course, wrong-doing U.S execs get government bail outs and multi-million dollar golden parachutes (*cough* Bear Stearns, *cough* Lehman Brothers). So, the message is “do what we say, not what we do”.
Doesn’t hipocracy smell great?!
Theoretically, if we had a true free market, this wouldn’t be an issue. But, as usual, we look to the government to solve all our problems. Would the free market system work flawlessly? Who knows. Maybe we should try it sometime.
You’d think after a few millenia of economic slavery, someone would have given it a shot by now… I can always dream, can’t I?
Are these “Asian Executives” even US citizens? Since when do we have the right to kidnap foreigners and imprison them in the US? Eh… nvm don’t answer that.
I take it you haven’t heard of extradition treaties?