The Jig Is Up
There’s nothing like a good economic crisis to get people to do desperate things. AIG, for example, begged for a government bailout so their executives could get a much-needed $440,000 (Rs 2.06 crore) vacation. Some others, however, decided that all the bailout begging is beneath them, so they took matters into their own dirty hands.
Turns out that the top three LCD manufacturers in the world — LG, Sharp and Chunghwa Picture Tubes — belong to the latter group. Early in November, they pled guilty to a price-fixing scam — they’ve all been selling LCD panels at much higher prices than they’re really worth. Apparently, the companies hated that the price of LCD panels were dropping at such an alarming rate, so they decided to slow that decline to keep their earnings up.
If you’ve been watching LCD prices lately, you’ll have noticed that they’ve continued to fall at an alarming rate, even with the price-fixing madness. According to iSuppli, a market research firm, the price of a 15.4-inch laptop screen has dropped from $97 (Rs 4,600) to $63 (Rs 2,961) in just the last six months. And remember, this is after the LCD makers have played their mischief. Take away the price fixing, and we’re talking much lower prices for your TVs, monitors and laptops. Or, at least, a bigger profit for the companies that sell you these products.
For their indiscretions, the three companies will receive more than just a rap on the knuckles. The US Justice Department has fined them a total of $585 million (Rs 2750 crore); LG alone will have to cough up $400 million (Rs 1880 crore). Obviously, an irate American public won’t stand for being gypped (not when there’s money to be made), and class action lawsuits have cropped up all over the landscape. It’s also likely that the companies who have been buying these LCDs — Dell, Apple and Motorola, for instance — might want some revenge.