Justice Department Wants AU Optronics To Pay $1 Billion Fine

Posted Sep 15, 2012

The U.S. Department of Justice wants AU Optronics (AUO) to pay a $1 billion fine and two former executives to serve 10 years in prison.  AUO is a Taiwan based company that participated in a long-term price-fixing conspiracy.  This fine would be the largest ever obtained by the DOJ’s antitrust division and would be double the next highest fine.

AUO was convicted in March for price fixing LCD panels and sold more than $2.3 billion worth of LCD panels in the U.S. as part of a price-fixing conspiracy.  The DOJ said in a sentencing document filed on Tuesday in the U.S. District Court for the Northern District of California that AUO conspired with other LCD makers to fix prices for five years starting in September 2001.

The DOJ’s sentencing document said that AU Optronics’ former president Hsuan Bin Chen and former executive vice president Hui Hsiung should face 10 years in prison and pay $1 million fines.

AU and their executives were “central figures in the most serious price-fixing cartel ever prosecuted.” said the DOJ.

“Only these sentences could possibly reflect the seriousness of this offense or provide adequate deterrence,” said the DOJ. “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.”

Combined the conspiring companies sold $71.9 billion in price-fixed panels worldwide with around $23.5 billion LCD panels sold in the U.S. said the DOJ.

“The conspiracy particularly targeted the United States and its hi-tech companies: Apple, HP, and Dell,” said the DOJ. “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 said that their recommended sentences are “lenient.”  AU was indicted in a California court in June 2010.  In November 2008, 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.