AU Optronics Execs Indicted for Price-Fixing

A federal grand jury in San Francisco returned an indictment against AU Optronics Corp., the largest Taiwanese thin-film transistor-liquid crystal display panels (TFT-LCD) producer and seller, its Houston-based American subsidiary, and six of its executives for participating in a conspiracy to fix prices of TFT-LCD panels, the Department of Justice announced Thursday.

The indictment filed in US District Court in San Francisco charges that AU Optronics of Hsinchu, Taiwan, participated in a conspiracy to fix the prices of TFT-LCD panels sold worldwide from Sept. 14, 2001, to Dec. 1, 2006. AU Optronics Corp., its American subsidiary, AU Optronics Corporation America, and six AU Optronics’ executives, each a resident of Taiwan, participated in the conspiracy at various times during the alleged conspiracy time period.

TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy include some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard, the DOJ said.

The government alleges that AU Optronics President Hsuan Bin Chen, Executive Vice President Hui Hsing, and Lai-Juh Chen (director, Desktop Display Business Group), Shiu Lung Leung (senior manager, Desktop Display), Borlong Bai (senior manager, Notebook Display Business Group and director, Notebook Display Business Group), and Tsannrong Lee (senior manager, Desktop Display, director of Desktop Display and director of Notebook Display) all participated in the conspiracy at various times between Oct. 19, 2001, and Dec. 1, 2006.

According to the one-count felony charge, AU Optronics and its executives, who are current employees or members of the company's board of directors, conspired to fix prices of TFT-LCD panels during meetings and issuing price quotations in accordance with the agreements reached. Executives from AU Optronics and its American subsidiary also exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices, the government said.

If convicted, they could each face a maximum of 10 years in prison and a $1 million fine, while the corporation could be fined as much as $100 million.

AU Optronics said it was "disappointed" with the indictment in its own press release issued Thursday, adding that has cooperated with the DOJ since the investigation began in December 2006.

"AUO is proud of what its employees have accomplished and will stand with them in defending against these allegations," the company said. It also added that it does not believe the indictment will have an adverse material impact on the company's operations.

The indictment supersedes an indictment filed on Feb. 3, 2009, against co-conspirators Cheng Yuan Lin and Wen Jun Cheng, both former Chunghwa Picture Tubes LTD executives, and Duk Mo Koo, former LG Display Co. Ltd executive. As a result of the ongoing investigation by the DOJ Antitrust Div.'s San Francisco office and the FBI in San Francisco, six companies have pleaded guilty and have been sentenced to pay criminal fines totaling more than $860 million. Additionally, including Thursday's indictment, 17 executives have been charged, the government said.

For more information, visit: www.justice.gov or www.auo.com