The U.S. Department of Justice is recommending that AU Optronics, a Taiwanese maker of LCD panels, pay a US$1 billion fine, and two former executives serve 10 years in prison, for the company’s participation in a long-term price-fixing conspiracy.
That fine would be the largest ever obtained by the DOJ’s antitrust division, doubling the next highest fine.
AU, convicted in March for price fixing on LCD panels, sold more than $2.3 billion worth of LCD panels in the U.S. during the price-fixing conspiracy, the DOJ said in a sentencing document filed late Tuesday in U.S. District Court for the Northern District of California. AU conspired with other LCD makers to fix prices for five years, starting in September 2001, the DOJ said.
Hsuan Bin Chen, AU Optronics’ former president, and Hui Hsiung, the company’s former executive vice president, should each be sentenced to 10 years in prison and pay $1 million fines, the DOJ said in the sentencing document.
AU and the executives were “central figures in the most serious price-fixing cartel ever prosecuted” by the DOJ, the agency said in the sentencing request.
An AU Optronics representative wasn’t immediately available for comment.
“Only these sentences could possibly reflect the seriousness of this offense or provide adequate deterrence,” the DOJ said. “Defendants’ offense was no regulatory violation, nor a momentary lapse soon regretted. Rather, fully conscious of the wrongfulness of their actions, AUO and its executives conspired with the other major makers of [LCD] panels to systematically fix prices.”
The conspiring companies sold $71.9 billion in price-fixed panels worldwide, with about $23.5 billion LCD panels sold in the U.S., the DOJ said. “The conspiracy particularly targeted the United States and its hi-tech companies: Apple, HP, and Dell,” the DOJ said. “But the harm extended beyond these pillars of America’s hi-tech economy. The conspiracy affected every family, school, business, charity, and government agency that paid more to purchase notebook computers, computer monitors, and LCD televisions during the conspiracy.”
The DOJ called the recommended sentences “lenient.” The sentencing guidelines for the company range from $936 million to $1.9 billion, and the guidelines for the two executives go from 121 to 151 months, the DOJ said.
AU was indicted in the California court in June 2010.
In November 2008, three other electronics manufacturers — LG Display, Sharp and Chunghwa Picture Tubes — agreed to plead guilty and pay a combined $585 million in criminal fines for conspiring to fix LCD prices.
At the time, the $400 million fine paid by LG was the second-largest fine ever imposed by the DOJ’s Antitrust Division, the DOJ said.Thin-Film Transistor LCD panels are used in computer monitors and laptops, television sets, mobile phones and other electronic devices.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant’s e-mail address is grant_gross@idg.com.