Antitrust Alert: U.S. and EU Antitrust Authorities Impose Extraordinary Fines in Two New Enforcement Actions
In the U.S. matter, on November 12 the Justice Department filed charges against LG Display (South Korea), Sharp Corporation (Japan), and Chungwha (Taiwan), all of which have agreed to plea guilty and pay fines for conspiring to fix prices of LCD panels, which are used in computer monitors and other electronic devices. The government charged that the defendants met and agreed on LCD prices, bid to customers in accordance with those agreed prices, and exchanged information to confirm each was complying with the agreement. LG agreed to pay a $400 million fine, Sharp $120 million, and Chungwha $65 million, and the Justice Department stated that the fines would have been larger if the companies’ boards of directors had not quickly accepted responsibility and cooperated. LG’s fine is the second largest paid by any U.S. criminal antitrust defendant. It is likely this investigation was initiated by information obtained from a co-conspirator under the Justice Department’s leniency program. The government’s press statements reported that the investigation was aided by coordination of enforcement officials in Asia and Europe. The government also stated that some of the LCD panels were sold to Apple Computer, Dell Computer, and Motorola Inc. It should be expected that information on additional plea agreements and possible indictment of executives will be released soon. Private class action lawsuits already have been filed on behalf of customers and ultimate consumers of products with LCD panels. It has been reported that the EU and Japan also are investigating this conduct. EU Press Release The fines imposed on cartel participants by the U.S. and EU authorities reflect their severe view of cartel conduct like price fixing and market allocation. The EC’s extraordinary fines may be seen as part of its effort to deter cartel conduct in Europe by increasing fines to levels beyond those imposed by any other jurisdictions. Unlike the U.S. authorities, the EC cannot impose jail time for antitrust violations. The U.S. Justice Department considers prison time for executives to be the best deterrent, and each year the U.S. imposes longer jail sentences on more U.S. and non-U.S. defendants.
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