In December 2010, five Asian companies, including Taiwanese manufacturers Chimei Innolux Corp., AU Optronics Corp., Chunghwa Picture Tubes Ltd. and HannStar Display Corp., received heavy fines from the European Commission (EC) for participating in a cartel that conspired to fix the prices of LCD components that were subsequently sold to European customers. The EC, based on evidence provided by sixth cartel member and whistle-blower Samsung Electronics, showed that the LCD makers met roughly 60 times – or about once a month – between October 2001 and February 2006 to make pricing decisions regarding thin-film transistor (TFT) LCD panels used in televisions, computer monitors, and cell phones and other portable consumer devices. They also apparently made deals on production output, capacity utilization and trading conditions, and they shared trade secrets among themselves. The assemblies became known as the “Crystal Meetings.” LG Display of Seoul, South Korea, also was a member of the cartel and received the second-largest fine after Chimei Innolux of Jhunan, Taiwan. Samsung was granted immunity from the fines because it was the first to bring attention to the illegal price fixing. AU Optronics of Hsinchu and Chunghwa Picture Tubes of Bade City, both in Taiwan, and LG Display initially were fined higher amounts but received reductions because they each cooperated with the EC investigation. The EC based the fines on reported revenues on the devices. According to Joaquìn Almunia, vice president of the European Commission in charge of competitive fairness, two of the LCD manufacturers requested that their fines be reduced because of an inability to pay, but those requests were denied. “Foreign companies, like European ones, need to understand that, if they want to do business in Europe, they must play fair,” Almunia said in a published statement. According to Almunia, the cartel affected TFT-LCD panel sales worth roughly 77 billion ($9.1 billion) within Europe. Earlier, the Taiwanese government had investigated the cartel’s activities but closed the case because only the US and Europe were affected, not Taiwanese consumers. Several of the affected companies, including LG Display and AU Optronics, are considering whether to appeal their fines. Chunghwa Picture Tubes said that it had already put aside the funds to pay the fine, but that it had not yet decided whether to challenge the EC ruling. The Taiwanese government has expressed support for the fined companies based in the country, with its minister of economic affairs, Shih Yen-Shiang, saying that Taipei would provide assistance if any of the companies requested it. The EC’s actions are part of an ongoing, and possibly accelerating, movement to stanch unfair practices in the display industry. In March 2009, the US Department of Justice obtained an admission of guilt from Tokyo-based Hitachi, which agreed to pay $31 million in fines for price-fixing screens that were to be sold to Dell Inc. of Round Rock, Texas, between April 2001 and March 2004. Hitachi also is facing a felony charge in the case. In 2010, Dell announced that it would sue Sharp, Toshiba, Seiko Epson and HannStar Display to recover a portion of the billions of dollars of purchases made of TFT-LCD panels, or products containing such panels. Also in 2009, LG Display Co.’s executive vice president of sales and marketing, Bock Kwon, pled guilty and accepted both a personal $30,000 fine and a year inside a minimum security prison. In total, LG Display was fined $400 million for price-fixing its TFT-LCDs. In addition to LG Display and Hitachi, Sharp and Chunghwa Picture Tubes were involved in the antitrust activity. Thus far, seven executives from Japanese and South Korean LCD companies have been indicted in the US, with four pleading guilty. AU Optronics faces trial later this year in US federal court, and executives Chen Lai-juh, Chen Hsuan-bin and Hui Hsiung have been barred from leaving the US until charges against them and their company have been processed. AU Optronics continues to deny allegations of antitrust activities in the US. Adding to the LCD makers’ potential woes, several of their customers have initiated, or are considering, lawsuits to recover illegally obtained funds. In addition to Dell’s pushback against Hitachi and others, phone maker Nokia is going after several of its screen suppliers, including Samsung, LG, Sharp, Toshiba, Hitachi and AU Optronics. According to Nokia, these companies conspired to fix prices throughout 2006, leading to “mysterious overcharges” for the LCD screens Nokia was purchasing. Economists expect that such lawsuits, if successful in bringing at least private settlements, could be valued at three to four times the total of government fines, or more than $2 billion. The global market for LCDs between 2001 and 2006 was worth about $130 billion and now is up to $70 billion per year, so analysts are uncertain whether any amount of fines will act as a deterrent toward future collusions.