in re tft lcd flat panel antitrust pricelist

2023-01-03 12:32:11

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The TFT-LCD (Flat Panel) Antitrust Litigationclass-action lawsuit regarding the worldwide conspiracy to coordinate the prices of Thin-Film Transistor-Liquid Crystal Display (TFT-LCD) panels, which are used to make laptop computers, computer monitors and televisions, between 1999 and 2006. In March 2010, Judge Susan Illston certified two nationwide classes of persons and entities that directly and indirectly purchased TFT-LCDs – for panel purchasers and purchasers of TFT-LCD integrated products; the litigation was followed by multiple suits.

TFT-LCDs are used in flat-panel televisions, laptop and computer monitors, mobile phones, personal digital assistants, semiconductors and other devices;

In mid-2006, the U.S. Department of Justice (DOJ) Antitrust Division requested FBI assistance in investigating LCD price-fixing. In December 2006, authorities in Japan, Korea, the European Union and the United States revealed a probe into alleged anti-competitive activity among LCD panel manufacturers.

The companies involved, which later became the Defendants, were Taiwanese companies AU Optronics (AUO), Chi Mei, Chunghwa Picture Tubes (Chunghwa), and HannStar; Korean companies LG Display and Samsung; and Japanese companies Hitachi, Sharp and Toshiba.cartel which took place between January 1, 1999, through December 31, 2006, and which was designed to illegally reduce competition and thus inflate prices for LCD panels. The companies exchanged information on future production planning, capacity use, pricing and other commercial conditions.European Commission concluded that the companies were aware they were violating competition rules, and took steps to conceal the venue and results of the meetings; a document by the conspirators requested everybody involved "to take care of security/confidentiality matters and to limit written communication".

This price-fixing scheme manipulated the playing field for businesses that abide by the rules, and left consumers to pay artificially higher costs for televisions, computers and other electronics.

Companies directly affected by the LCD price-fixing conspiracy, as direct victims of the cartel, were some of the largest computer, television and cellular telephone manufacturers in the world. These direct action plaintiffs included AT&T Mobility, Best Buy,Costco Wholesale Corporation, Good Guys, Kmart Corp, Motorola Mobility, Newegg, Sears, and Target Corp.Clayton Act (15 U.S.C. § 26) to prevent Defendants from violating Section 1 of the Sherman Act (15 U.S.C. § 1), as well as (b) 23 separate state-wide classes based on each state"s antitrust/consumer protection class action law.

In November 2008, LG, Chunghwa, Hitachi, Epson, and Chi Mei pleaded guilty to criminal charges of fixing prices of TFT-LCD panels sold in the U.S. and agreed to pay criminal fines (see chart).

The South Korea Fair Trade Commission launched legal proceedings as well. It concluded that the companies involved met more than once a month and more than 200 times from September 2001 to December 2006, and imposed fines on the LCD manufacturers.

Sharp Corp. pleaded guilty to three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell Inc., Apple Computer Inc. and Motorola Inc., and was sentenced to pay a $120 million criminal fine,

Chunghwa pleaded guilty and was sentenced to pay a $65 million criminal fine for participating with LG and other unnamed co-conspirators during the five-year cartel period.

In South Korea, regulators imposed the largest fine the country had ever imposed in an international cartel case, and fined Samsung Electronics and LG Display ₩92.29 billion and ₩65.52 billion, respectively. AU Optronics was fined ₩28.53 billion, Chimmei Innolux ₩1.55 billion, Chungwa ₩290 million and HannStar ₩870 million.

Seven executives from Japanese and South Korean LCD companies were indicted in the U.S. Four were charged with participating as co-conspirators in the conspiracy and sentenced to prison terms – including LG"s Vice President of Monitor Sales, Chunghwa"s chairman, its chief executive officer, and its Vice President of LCD Sales – for "participating in meetings, conversations and communications in Taiwan, South Korea and the United States to discuss the prices of TFT-LCD panels; agreeing during these meetings, conversations and communications to charge prices of TFT-LCD panels at certain predetermined levels; issuing price quotations in accordance with the agreements reached; exchanging information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices; and authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy."

On December 8, 2010, the European Commission announced it had fined six of the LCD companies involved in a total of €648 million (Samsung Electronics received full immunity under the commission"s 2002 Leniency Notice) – LG Display, AU Optronics, Chimei, Chunghwa Picture and HannStar Display Corporation.

On July 3, 2012, a U.S. federal jury ruled that the remaining defendant, Toshiba Corporation, which denied any wrongdoing, participated in the conspiracy to fix prices of TFT-LCDs and returned a verdict in favor of the plaintiff class. Following the trial, Toshiba agreed to resolve the case by paying the class $30 million.

On March 29, 2013, Judge Susan Illston issued final approval of the settlements agreements totaling $1.1 billion for the indirect purchaser’ class. The settling companies also agreed to establish antitrust compliance programs and to help prosecute other defendants, and cooperate with the Justice Department"s continuing investigation.

in re tft lcd flat panel antitrust pricelist

Lieff Cabraser served as Court-appointed Co-Lead Counsel for direct purchasers in litigation against the world’s leading manufacturers of Thin Film Transistor Liquid Crystal Displays.

TFT-LCDs are used in flat-panel televisions as well as computer monitors, laptop computers, mobile phones, personal digital assistants, and other devices. Plaintiffs charged that defendants conspired to raise and fix the prices of TFT-LCD panels and certain products containing those panels for over a decade, resulting in overcharges to purchasers of those panels and products.

In March 2010, the Court certified two nationwide classes of persons and entities that directly purchased TFT-LCDs from January 1, 1999 through December 31, 2006, one class of panel purchasers, and one class of buyers of laptop computers, computer monitors, and televisions that contained TFT-LCDs.

Over the course of the litigation, the classes reached settlements with all defendants except Toshiba. The case against Toshiba proceeded to trial. In July 2012, the jury found that Toshiba participated in the price-fixing conspiracy. The case was subsequently settled, bringing the total settlements in the litigation to over $470 million.

For his outstanding work in the precedent-setting litigation, California Lawyer recognized Richard M. Heimann with a 2013 California Lawyer of the Year award.

in re tft lcd flat panel antitrust pricelist

More than five years of litigation after reaching an initial agreement, Sony settled with HannStar for its role in a price-fixing scheme involving liquid crystal displays, as a California judge signed off Tuesday on the parties" agreement to dismiss the claim from multidistrict litigation.

Best Buy Co. will get about $2 million in fees after it won an antitrust suit alleging manufacturers fixed prices in the market for flat-screen liquid crystal display panels, slightly more than it initially won, according to a California federal court order Monday.

The Oregon Attorney General"s Office on Wednesday asked a California federal court to award it up to $4.8 million in costs and attorneys" fees from $21.5 million in deals the state struck with LG, Toshiba, Samsung, Sharp and others that settled its claims in multidistrict litigation over alleged price-fixing of liquid crystal display products.

The state of Oregon on Friday asked a California federal judge to approve a $21 million deal with Hitachi, Epson, LG, Sharp, Samsung, AU Optronics, Toshiba and others to end the state"s claims in multidistrict litigation over alleged price-fixing of liquid crystal display products.

Circuit City Stores Inc. and Proview Technology Inc. finalized settlement agreements Tuesday in their suits against AU Optronics Corp. and HannStar Display Corp., as part of multidistrict litigation over alleged price-fixing of liquid crystal display products.

Home Depot USA has reached a settlement in its suit against AU Optronics Corp., part of multidistrict litigation alleging a price-fixing plot involving liquid crystal display products, according to court documents filed with California"s Northern District on Wednesday.

Acer America Corp. on Friday resolved its antitrust suit against Toshiba Corp., Hitachi Ltd. and NEC Corp. that accused liquid crystal display makers of fixing prices, one day after Acer agreed to dismiss claims against LG Display Co. Ltd., according to documents filed in California federal court.

The judge overseeing long-running multidistrict litigation accusing liquid crystal display makers of price-fixing on Tuesday recommended sending suits filed by Office Depot Inc., MetroPCS Wireless Inc. and others back to their original courts for trial.

The trustee for Circuit City Stores Inc. agreed to dismiss his claims against Epson Imaging Devices Corp. in a liquid crystal display price-fixing multidistrict litigation on Tuesday, a day after Proview Technology Inc. stipulated dismissal of its claims against LG Display Co. Ltd. in the same case.

A California federal judge on Friday refused to halt the $1.1 billion settlement in a multidistrict litigation over price-fixing on liquid crystal displays while lender LFG National Capital LLC awaits final judgment in a separate suit seeking a $31.1 million loan repayment from the plaintiffs" attorney.

in re tft lcd flat panel antitrust pricelist

applEcon helped a class of U.S. consumers to obtain settlements totaling $1.082 billion from a cartel of manufacturers of liquid crystal display (LCD) panels. LCD panels are flat video displays used in computer monitors, laptop computers, and televisions. The nine manufacturers that comprised the cartel supplied approximately 98% of the worldwide market for large LCD panels during the period the cartel operated, 1999-2006. Sales of LCD panels at issue to class members were approximately $23.5 billion during this period. Representatives of the cartel’s member companies, including senior executives, met about once a month for years to collude on capacity and output, and to fix prices.

The value of applEcon’s approach to such cases, combining deep knowledge of the industry and information available in the case with strong analytical skills, are highlighted by this engagement. In July 2011, defendants submitted nine separate expert reports all responding to Dr. Netz’s analysis. Given only three weeks to file a reply, applEcon analyzed and responded to these reports with factual and analytical evidence countering their various claims. The depth of applEcon’s knowledge of the industry led class counsel to also rely on applEcon to provide critical assistance on issues related to both the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) and ascertainability, both of which are primarily legal, as opposed to economic, matters. applEcon’s depth of knowledge also led other firms in related litigation to rely on us for our understanding of the massive volume of disparate data produced by the various defendants.

Over the course of the four and a half year engagement, applEcon supported class attorneys at virtually every stage of this complex case. applEcon submitted nine expert reports and affidavits and helped class attorneys address a wide range of issues, including: class certification, discovery, damages, pass-through of overcharges to indirect purchasers, class de-certification, cartel effectiveness and causation of antitrust harm, class members’ ability to ascertain their claims, a Daubert challenge, a motion to dismiss based on FTAIA, and responses to several additional motions for summary judgment. applEcon was preparing trial testimony when the last of the defendants, AUO, LG, and Toshiba, settled with the indirect purchaser class shortly before trial was to begin.

Suit was brought by representatives of a putative class of U.S. purchasers of products containing large LCD panels, alleging that the cartel caused the prices they paid for LCD products to be above competitive levels, in violation of U.S. antitrust laws. Attorneys for the indirect purchaser class faced a myriad of complications: an LCD panel may change hands several times as it passes from the LCD manufacturer to product manufacturers, distributors, and retailers before an end consumer ultimately takes it home as a component of a monitor, laptop, or television. Proof of antitrust harm required establishing that defendants overcharged their direct customers and that the cartel’s overcharges were passed through the length of the distribution chain resulting in elevated prices for end consumers purchasing products containing LCD panels. Calculating damages to end consumers required quantifying both the overcharge to direct purchasers as well as the pass-through rate.

Because the cartel members were based in foreign countries, class attorneys also faced the challenge of demonstrating that the cartel’s actions had a “direct, substantial, and reasonably foreseeable effect on domestic commerce” in order to meet FTAIA requirements. applEcon drew upon its extensive experience in demonstrating pass-through and common proof of damages as it helped attorneys for the class to meet these challenges. Judge Susan Illston relied on applEcon’s pass-through analyses when she certified the indirect purchaser class, and cited Dr. Netz’s pass-through testimony in her order denying Defendants’ motion to dismiss based on FTAIA, writing that the “increased price of the components caused the prices of finished products in the United States to increase. If that’s not ‘direct,’ it’s difficult to imagine what would be.”

Complications multiplied due to the fact that the conspiracy involved nine defendants based in three foreign countries, with multiple divisions across the globe, some involved in multiple stages of production. For example, Samsung was a producer of both LCD panels and televisions containing LCD panels. Whereas applEcon has long been accustomed to large, complex cases, with mountains of documents and data, we soon discovered that ordinary complications are compounded by multiple defendants, multiple teams of opposing attorneys and expert witnesses, and multiple datasets, each with unique characteristics. We enjoy developing systems that improve the efficiency of our operations, and methods we developed in previous complex litigation allowed us to meet the challenges of this case in a cost-effective manner.

in re tft lcd flat panel antitrust pricelist

Berger Montague served on the Plaintiffs’ executive committee in In re TFT-LCD Antitrust Litigation, a class action lawsuit against the world’s leading manufacturers of Thin Film Transistor Liquid Crystal Displays (“TFT-LCDs”) and products incorporating TFT-LCDs.

TFT-LCDs are used in flat-panel televisions as well as computer monitors, laptop computers, mobile phones, personal digital assistants, and other devices. The Plaintiffs, who directly purchased from a Defendant the TFT-LCDs or the products containing them, alleged the Defendants fixed the prices of the TFT-LCDs, causing the Plaintiffs to pay more than they should have.

On July 3, 2012, a federal jury found that the remaining defendant, Toshiba Corporation, participated in the conspiracy to fix prices of TFT-LCDs and returned a verdict for the plaintiff class.

After trial, Toshiba agreed to resolve the case by paying the class $30 million to resolve the case. With the Toshiba settlement, Berger Montague and other class counsel obtained over $473 million from the defendants in this action.

in re tft lcd flat panel antitrust pricelist

IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION. This Order Relates to: AT&T Mobility LLC v. AU Optronics Corp., et al., C 09-4997 SI, Best Buy Co., Inc. v. AU Optronics Corp., et al., C 10-4572 SI, Electrograph Systems, Inc. v. Epson Imaging Devices Corp., et al., C 10-0117 SI, Target Corp. v. AU Optronics Corp., et al., C 10-4945 SI

Disposition: Court granted summary judgment for defendants, in part, holding that plaintiffs could not recover damages from companies not named as conspirators in complaints.

umbrella, co-conspirators, entities, discovery, conspiracy, antitrust, speculative, calculated, non-moving, purported, cut-off, conspirators, price-fixing, indirect, vertical, genuine, unnamed, notice

Antitrust & Trade Law, Price Fixing & Restraints of Trade, Vertical Restraints, Price Fixing, Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Burdens of Proof, Movant Persuasion & Proof, Nonmovant Persuasion & Proof, Evidentiary Considerations, Scintilla Rule, Judgments, Evidentiary Considerations, Pleadings, Complaints, Requirements for Complaint, General Overview, Torts, Concerted Action, Civil Conspiracy

(Reuters) - Samsung Electronics Co, Sharp Corp and five other makers of liquid crystal displays agreed to pay more than $553 million to settle consumer and state regulatory claims that they conspired to fix prices for LCD panels in televisions, notebook computers and monitors.A worker prepares a display of Sharp flat panel televisions for the 2009 International Consumer Electronics Show (CES) at the Las Vegas Convention Center in Las Vegas, Nevada, January 7, 2009. REUTERS/Steve Marcus

The settlement is the latest arising from lawsuits alleging the creation of an international cartel designed to illegally inflate prices and stifle competition in LCD panels between 1999 and 2006, affecting billions of dollars of U.S. commerce.

In December 2006, authorities in Japan, Korea, the European Union and the United States revealed a probe into alleged anti-competitive activity among LCD panel manufacturers. Many companies and executives have since pleaded guilty to criminal antitrust violations and paid more than $890 million in fines.

The latest payout includes $538.6 million to resolve claims by “indirect” purchasers that bought televisions and computers with thin film transistor LCDs, as well as claims by eight states: Arkansas, California, Florida, Michigan, Missouri, New York, West Virginia and Wisconsin.

It also includes payments of more than $14.7 million by five of the companies to settle civil fine and penalty law claims by the states, the office of New York Attorney General Eric Schneiderman said.

“This price-fixing scheme manipulated the playing field for businesses that abide by the rules, and left consumers to pay artificially higher costs for televisions, computers and other electronics,” Schneiderman said in a statement on Tuesday.

The accord calls for Samsung to pay $240 million, Sharp $115.5 million and Taiwan-based Chimei Innolux Corp $110.3 million, settlement papers filed on Friday with the U.S. District Court in San Francisco show.

Hitachi Displays Ltd will pay $39 million, HannStar Display Corp, $25.7 million; Chunghwa Picture Tubes Ltd, $5.3 million, and Epson Imaging Devices Corp, $2.9 million, the court documents show.

The state penalties include $6 million to be paid by Sharp, $5.7 million by Chimei, and smaller amounts by Epson, HannStar and Hitachi, a spokeswoman for Schneierman said.

Other defendants have yet to settle, including Taiwan-based AU Optronics Corp, one of the largest LCD panel manufacturers; South Korea’s LG Display Co and Toshiba Corp.

The accord follows a settlement this month by eight companies, including Samsung and Sharp, to pay $388 million to settle litigation by direct purchasers of the LCD panels.

in re tft lcd flat panel antitrust pricelist

Liaison Counsel Elizabeth Pritzker represented a certified class of direct purchaser plaintiffs in a multi-district antitrust class action alleging price-fixing by foreign and domestic manufacturers of Thin Film Transistor Liquid Crystal Display (TFT-LCD) panels and products. The case resulted in class settlements of $473 million, and an $87 million jury verdict before trebling.TFT-LCDis considered to be one of the largest antitrust MDL actions ever in the United States. The case was litigated and tried to verdict before Northern District of California Judge Susan Illston.

in re tft lcd flat panel antitrust pricelist

The objective of state and federal antitrust law is maintaining competition. Antitrust statutes are designed to balance the efficient allocation of resources and access to free markets with protecting consumers and competitors from restraint of trade, unfair competition and unfair trade practices. We handle the following types of antitrust and unfair competition claims:

Price Fixing.Price fixing is an agreement by two or more parties to artificially set or maintain the price of a good or service at a higher level than what the price would have been in a free market. A price fix may be accomplished in a number of ways, including selling a good or service at a common target or minimum price, limiting discounts, establishing uniform costs and markups, imposing mandatory surcharges, adhering to a price book or list price, using cooperative price advertising, standardizing credit terms offered to purchasers, using uniform trade-in allowances, reducing output or sales, and sharing markets or customers.

Price Discrimination.Price discrimination is the practice of offering identical or substantially similar goods to different buyers in the same market at different prices when the cost to produce the goods is the same. Small businesses threatened by chain store competition or wholesalers attempting to prevent large chain stores from buying directly from manufacturers at lower prices are classic situations where price discrimination may occur.

Predatory Pricing.Predatory pricing occurs when a dominant business prices goods below their cost in order to eliminate specific competitors in the short run, and reduce overall competition in the long run. Once the low pricing eliminates its small business competitors, a dominant business will raise its prices, thereby forcing consumers to pay higher prices for goods than they otherwise would have paid had there been competition in the marketplace.

Bid Rigging.Bid rigging is a particular form of price fixing where two or more competing companies coordinate their bids on procurement or project contracts. Bid rigging generally occurs in two forms: (1) where companies agree to submit common bids, thereby eliminating price competition, and (2) where companies agree on which of them will submit the lowest bid, and rotate the bids in such a way that each firm wins an agreed number or dollar value of contracts. Government agencies are most often the targets of bid rigging.

Monopolization.Monopolization occurs when a producer (1) secures the possession of monopoly power — that is, the power to fix prices and exclude competitors — within a particular market, and (2) acquires or maintains such power as distinguished from growth or development resulting from a superior product, business acumen, or historical accident. A monopoly is the practical suppression of effective business competition, which creates the power to control prices to the detriment of consumers. It occurs when one supplier or producer controls ― or obtains an advantage over ― a market within a given region.

Tying Arrangement.A tying arrangement occurs when a seller refuses to sell a product or service unless the buyer also buys a second product or service. The tying product or service is usually in high demand while the tied product or service is usually in lesser demand or of poorer quality. Tie-ins are often used by powerful businesses with substantial market share to coerce buyers when buyers do not need or want the “tied” product or service.

Exclusive Dealing.In its simplest form, an exclusive dealing arrangement is a contract between a manufacturer and a buyer forbidding the buyer from purchasing the contracted for good from any other seller, or requiring the buyer to take all of its needs of the contracted for good from that manufacturer—in other words, a requirements contract. An exclusive dealing arrangement violates the antitrust laws when it creates a substantial barrier to entering the marketplace by competing (and typically smaller) manufacturers.

We have represented consumers, automobile service companies, pharmacies, grocery retailers, and grocery wholesalers in antitrust cases involving LCD televisions, after-market vehicle parts, brand-name prescription drugs, bananas, bread, and other consumer goods and food products. We are experienced antitrust trial lawyers.

In re Beef Antitrust Litigation (D. Minn.) (currently represent multiple direct purchaser grocery wholesalers le nd retailers, meat distributors, and foodservice companies against the major beef producers for conspiring to limit the supply, and artificially raise and fix the price of, fresh/frozen beef and beef products, from at least 2015-2021).

In re Pork Antitrust Litigation (D. Minn.) (currently represent multiple direct purchaser grocery wholesalers and retailers, meat distributors, and foodservice companies against the major pork producers for conspiring to artificially raise and fix the price of fresh/frozen pork and pork products, from at least 2009-2021) (significant confidential settlements obtained for clients).

In re Chickens Antitrust Litigation (N.D. Ill.) (currently represent multiple direct purchaser grocery wholesalers and retailers, meat distributors, and foodservice companies against the major chicken producers for conspiring to artificially raise and fix the price of fresh/frozen chicken and chicken products, from at least 2008-2016) (significant confidential settlements obtained for clients).

In re Packaged Seafood Antitrust Litigation;MDL No. 2670 (S.D. Cal) (currently represent grocery wholesaler and retailer direct action plaintiffs against Starkist, Bumble Bee, and Chicken of the Sea for raising and fixing the price of packaged seafood since 2003) (significant confidential settlements obtained for clients).

In re TFT-LCD (Flat Panel) Antitrust Litigation; MDL No. 1827 (N.D. Cal.) (represented the Nevada consumer sub-class representative in a price fixing case involving liquid crystal display flat panel televisions) (case settled for $1.1 billion).

In re Static Random Access Memory (SRAM) Antitrust Litigation; MDL No. 1819 (N.D. Cal.) (represented nine state consumer class representatives in a price fixing case involving static random access memory chips) (case settled for $41 million).

In re Aftermarket Filters Antitrust Litigation; MDL No. 1957 (N.D. Ill.) (represented an automobile service facility that was one of the lead direct purchaser class representatives in a price fixing case involving aftermarket automobile oil and air filters) (case settled for over $17 million).

In re Brand-Name Prescription Drug Antitrust Litigation; MDL No. 997 (N.D. Ill.) (co-lead counsel for 200 pharmacy and grocery companies with over 1100 retail locations that opted out of the class action in a price fixing case involving brand-name prescription drugs) (over $40 million recovered for clients).

in re tft lcd flat panel antitrust pricelist

WASHINGTON – A Thin-Film Transistor-Liquid Crystal Display (TFT-LCD) producer and seller has agreed to plead guilty and pay $220 million in criminal fines for its role in a conspiracy to fix prices in the sale of liquid crystal display panels, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court in San Francisco, Chi Mei Optoelectronics participated in a conspiracy to fix the prices of TFT-LCD panels sold worldwide from Sept. 14, 2001, to Dec. 1, 2006. According to the plea agreement, which is subject to court approval, Chi Mei has agreed to cooperate with the department’s ongoing antitrust investigation.

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 are some of the largest computer and television manufacturers in the world, including Apple, Dell and HP.

According to the charge, Chi Mei carried out the conspiracy by agreeing during meetings, conversations and communications to charge prices of TFT-LCD panels at certain pre-determined levels and issuing price quotations in accordance with the agreements reached. As a part of the conspiracy, Chi Mei exchanged information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices.

Chi Mei, which is based in Tainan, Taiwan, is charged with price fixing in violation of the Sherman Act. Each violation carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Including today’s charges, as a result of this investigation, six companies have pleaded guilty or have agreed to plead guilty and have been sentenced to pay or have agreed to pay criminal fines totaling more than $860 million. Additionally, nine executives have been charged to date in the department’s ongoing investigation.

Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.

Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660.

in re tft lcd flat panel antitrust pricelist

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in re tft lcd flat panel antitrust pricelist

Society routinely overlooks the importance of ordinary workers. Their contributions often go unappreciated. In one famous example, most of the Tiffany lamps and stained-glass artworks credited to Louis Tiffany were actually designed and crafted by Clara Driscoll and her team of over thirty women, who were denied recognition for their achievements for a century.

The same is true for criminal enterprises. Not everyone can be a kingpin. Conspiracies comprise layers. In organized crime syndicates, much of the day-to-day work is done by deputies, lieutenants, and other underlings tasked with carrying out the criminality. Many criminal ventures could not succeed but for the work of subordinates.

And so it is with price-fixing conspiracies. These conspiracies steal billions of dollars from consumers and deprive millions of people of food, medicine, and other necessities of life.

Federal courts frequently fail to recognize the critical importance of low- and mid-level workers in criminal conspiracies when evaluating price-fixing claims. In antitrust litigation, some judges treat the senior executives as the only actors whose actions matter. As a result, courts routinely grant summary judgment to price-fixing defendants despite strong evidence that the defendants’ lower-level employees have engaged in price-fixing and cartel-stabilizing activities. An unfortunate and misguided body of precedent instructs federal judges to diminish or disregard evidence that involves employees who lack pricing authority. As a result, courts are too quick to exonerate firms accused of illegal collusion.

This Article explores the critical role of lower-level employees in managing, enforcing, and concealing illegal price-fixing conspiracies. Part I explains the basics of antitrust liability for price fixing. Because price fixing is per se illegal, most price-fixing litigation turns on whether the plaintiffs can establish that the defendants did indeed agree to set prices through collusion. Direct evidence of agreement is generally unavailable because cartel members conceal their collusion. Because of this, courts allow plaintiffs to use circumstantial evidence to establish that the defendants agreed to fix prices. Plaintiffs generally do this by showing that the defendants engaged in parallel pricing and that there are “plus factors” that suggest that the defendants’ parallel pricing is the product of collusion, not individual decisions. Although courts have recognized dozens of plus factors, Part I focuses on the plus factors relevant to this project, including the opportunity to conspire, inter-competitor communications, and exchanges of price information.

Part II examines how some courts have made it harder for antitrust plaintiffs to prove collusion through circumstantial evidence. Price-fixing defendants argue that inter-competitor communications between employees who did not possess pricing authority are not evidence of collusion. An influential line of antitrust cases has minimized the legal significance of lower-level employees’ communications and activities. Even when these employees share confidential pricing plans with rivals, courts diminish—and often mischaracterize—these discussions as mere “chit chat” or “shop talk.” These antitrust opinions are premised on the notion that price-fixing conspiracies do not rely on the labor of lower-level employees.

Part III explains how the pricing-authority line of cases discussed in Part II is based on a fundamental misunderstanding of how price-fixing cartels actually operate. Successful antitrust conspiracies generally perform a series of functions: forming the cartel and setting the initial fixed price; managing the cartel, including fluctuations in price; enforcing the cartel, by monitoring member prices and sales volume and penalizing members who deviate from the cartel agreement; and concealing the cartel’s conspiracy from antitrust enforcers. Case studies demonstrate how all of these tasks can be—and are—performed by lower-level employees in actual price-fixing conspiracies.

Part IV details how the judicial failure to appreciate how price-fixing cartels operate has distorted antitrust jurisprudence. In addition to diminishing the significance of inter-competitor communications involving employees without pricing authority, some courts assume that lower-level employees do not possess relevant knowledge regarding their employers’ illegal collusion. In a similar vein, other opinions minimize the content of incriminating evidence when the source of the evidence is not an executive with pricing authority. Finally, courts sometimes misapprehend the flow of information by focusing on—and exonerating—the receipt of competitively sensitive pricing information while ignoring the delivery of this same information. The net effect of these judicial errors is the construction of a safe harbor whereby price-fixing firms can evade antitrust liability by using lower-level employees to perform cartel tasks.

Part V charts a path forward. When evaluating circumstantial evidence of collusion, courts should focus on the content of inter-competitor communications, not the identity of the messenger. This is particularly true when firms maintain corporate policies and practices that require their lower-level employees to discuss pricing plans with their counterparts at rival firms and to report back their findings. Instead of devaluing the importance of lower-level employees in antitrust litigation, courts should treat these individuals as valuable assets who possess inside information that can bring down illegal conspiracies.

Despite the high penalties for price fixing, firms continue to illegally collude. Yet because the civil and criminal penalties are so high, price-fixing conspirators take great efforts to conceal their collusion from their victims and antitrust enforcement agencies.

In price-fixing cases, plaintiffs generally employ a two-step process for proving collusion through circumstantial evidence. First, they show that the defendants engaged in similar conduct, referred to as “conscious parallelism.”

The concept of plus factors covers a wide range of circumstantial evidence. Some plus factors explain how the defendants’ market is particularly susceptible to cartelization, while other plus factors suggest that the defendants have engaged in conduct associated with cartel formation, management, and enforcement.

This Article shows how courts misapprehend circumstantial evidence involving the price-fixing activities of employees without pricing authority. While courts have recognized dozens of individual plus factors, only a handful are relevant to issues surrounding the role of lower-level employees in price-fixing conspiracies.

Like most illegal conspiracies, price fixing is a function of motive and opportunity. The motive is generally self-evident: firms can increase their profits by replacing competition with collusion.

While the existence of inter-competitor communications in general shows that the competitors had the opportunity to collude, the content of some communications is particularly probative of illegal collusion having happened. For example, when competitors exchange sensitive price information, such as pricing plans, this can be strong circumstantial evidence of price collusion because such exchanges are often part of cartel negotiations over what price to set in which markets.

Price-fixing conspirators also exchange information as part of the cartel’s enforcement regime. Sharing price and sales data facilitates cartel enforcement, as members audit each other’s pricing to determine whether any firm is cheating by charging a price lower than that set by the cartel.

Statements made by the price-fixing defendants’ employees can also constitute evidence of collusion. Indeed, an admission of guilt by a high-level employee with inside information is direct evidence of illegal price fixing.

Due to antitrust law’s steep penalties, price-fixing conspirators engage in myriad methods to conceal their illegal activity. Conspirators engage in covert tactics such as using aliases and code names, holding secret meetings, creating fake trade associations, destroying incriminating documents and forging exculpatory ones, developing cover stories to explain price increases, and lying to government officials and customers.

In short, in price-fixing litigation, the activities and statements of the defendants’ employees can constitute critical evidence of collusion. Although price fixing is often conceived of as corporate misconduct, the actual price fixers are individual employees.

Despite the fact that most antitrust plaintiffs must rely on circumstantial evidence to prove collusion, several antitrust opinions have undermined the plus factors discussed in Part I by overemphasizing the issue of who within a defendant’s firm had actual authority to set prices. When arguing that courts should discount or ignore evidence of collusion involving lower-level employees, some price-fixing defendants contend “that a conspiracy cannot be inferred from ‘chance encounters’ between competitors’ employees, particularly where the employees have no pricing authority.”In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation,”

In many antitrust cases, plaintiffs present evidence of how senior executives of competing firms have engaged in communications, sometimes sharing sensitive information.Gainesville Utilities Department v. Florida Power & Light Co.,

When plaintiffs can proffer evidence of high-level executives exchanging information, courts are more likely to deny defendants’ motion for summary judgment on price-fixing claims.In re Publication Paper Antitrust Litigation,

In contrast to the Gainesville Utilities and In re Publication Paper Antitrust cases, which involved executive-level communications, several antitrust cases have discussed communications and information exchanges among lower-level employees. When plus-factor activity is committed by employees without pricing authority, courts routinely discount this evidence. The Third Circuit issued the quintessential opinion inviting courts to devalue evidence involving the activities of lower-level employees in In re Baby Food Antitrust Litigation.Baby Food, a group of wholesalers, supermarkets, and other purchasers sued Gerber, Beech–Nut, and Heinz for illegally conspiring to raise the prices of their baby food.

The Third Circuit minimized the significance of these price exchanges because they were done by low-level employees without pricing authority. The court began by noting that the district court “determined that the nature of the exchanges of information among the defendants’ sales representatives amounted to mere ‘chit chat’ at chance meetings or trade shows among persons with no pricing authority.”

The judges seemed to believe that the exchange of pricing information is not suspicious unless the plaintiffs could prove that high-powered executives communicated without any use of intermediaries. For example, the court at one point emphasized that “[n]o evidence . . . shows that any executive of any defendant exchanged price or market information with any other executive.”

The Third Circuit did not issue the first antitrust opinion to diminish the legal significance of rival salespeople exchanging sensitive price information,Baby Food decision has proved to be the most influential. Subsequent Third Circuit opinions have interpreted Baby Food as holding that “price discussion among low level sales people has little probative weight.”consider[] Plaintiffs’ evidence of suspicious intercorporate and internal communications among manufacturers’ low-level employees.”Baby Food to hold that “discussions about pricing or market conditions between low-level salesmen who lack pricing authority is not probative of conspiracy.”Baby Food opinion in order to support the broader proposition that “there is nothing suspicious about oligopolists exchanging non-public price information.”

For many courts, however, pricing authority operates as a toggle. For example, some federal judges have interpreted Baby Food as holding that although “price discussions among low level employees did not show a conspiracy[,] . . . if high-level executives had been involved, it would have constituted evidence of conspiracy.”

This binary approach is troublesome because it risks depleting some important forms of circumstantial evidence of their legal significance altogether. This ratchet effect—in which probative value is magnified when pricing authority is present but is diminished when that pricing authority is absent—is detrimental because it is based on false premises about how price-fixing conspiracies function. By focusing on the messenger instead of the message, courts misapprehend the probative value of critical evidence. Part III explores both the structure of illegal price-fixing cartels and the roles played in those conspiracies by lower-level employees without pricing authority.

Antitrust jurisprudence that overemphasizes the pricing authority of participants fails to appreciate how price-fixing conspiracies actually operate. Price-fixing conspiracies are often complicated webs of relationships among senior executives, managers, salespeople, and other employees scattered across a company’s organizational charts. Participants in a conspiracy serve different functions and perform different roles.

Cartel leaders often delegate. This Part discusses four major cartel tasks: formation, management, enforcement, and concealment of the conspiracy. The following sections will explain how these cartel functions are not the exclusive province of senior corporate executives with pricing authority. Indeed, empirically, lower-level employees have performed these functions in actual cartels.

Creating and maintaining a stable price-fixing cartel entails many steps. First, decision-makers across rival firms must agree in concept that they will replace competition with collusion. Even before the details of a price-fixing conspiracy are negotiated, the competitors need to communicate a mutual willingness to collude. Next, the co-conspirators must reach a consensus on the particular form of collusion they will employ. Price fixing can be as simple as rival firms agreeing to charge a particular price or increasing prices by an agreed-upon percentage.

Second, conspirators intent on maintaining a long-lasting cartel often develop mechanisms for managing fluctuations in the cartel price, which may have to be adjusted in response to changes in interest rates, exchange rates, prices of inputs, or consumer demand.

Third, conspirators often develop cartel enforcement mechanisms. Although all cartel members are collectively better off in the long run if they all abide by their illegal agreement, individual firms may maximize their short-term profits by cheating on their cartel partners. For example, a firm may charge less than the cartel’s agreed-upon price in order to sell more than its cartel quota.

Fourth, because conspiring with rivals to raise price exposes the conspirators to imprisonment, criminal fines, and treble damages to private plaintiffs, many price fixers go to great lengths to conceal their illegal collusion.

Not every price-fixing conspiracy contains all these steps or performs all these functions. Some cartels are created without any plans for cartel management, enforcement, or concealment. None of these tasks are required to form a cartel or to violate antitrust law. Nonetheless, many exposed price-fixing cartels performed these various functions, and evidence of these activities is highly probative of illegal collusion. The following discussion explains the role of lower-level employees in performing these tasks.

Price-fixing conspiracies can take many different forms. Simple collusion does not require a lot of participants; felonious price fixing can be as straightforward as two CEOs secretly agreeing to raise their prices.

Cartel managers within each member firm determine which employees perform each of the cartel functions. While some of the decisions and actions necessary for a durable price-fixing conspiracy must be made by executives in positions of power, most cartel functions can be executed by lower-level employees. This section reviews how lower-level employees perform many cartel responsibilities.

In most markets, the initial agreement to collude is best achieved through individuals with pricing authority. For example, when Robert Crandall, the president of American Airlines, called Howard Putnam, the president of Braniff Airlines, and suggested that both executives raise their fares 20%, Crandall had the authority to raise American’s prices should his counterpart at Braniff agree to this proposal.

The active involvement of senior executives at the outset, however, does not negate the critical role of lower-level employees during the early phases of cartel formation. Indeed, the initial price increase may be negotiated through executives without pricing authority. For example, between 2000 and 2009, Immucor and Ortho raised the price of blood reagent products twentyfold.

Below these so-called bosses, a cartel’s org chart is populated with lower-level employees, sometimes denominated within the cartel as “‘contact’ groups, ‘working level’, ‘Sherpa’ and ‘Global product marketing level’ ‘working level/management level/job arrangement’ meetings.””The lower-level cartel “working groups” tend to meet more often than the senior executives. For example, while the top-tier conspirators of the vitamins cartel met annually, “lower-level executives, who were charged with the implementation of the global cartel, met with their counterparts around the world on at least a quarterly basis to ensure that the cartel ran smoothly.”

Studying actual price-fixing conspiracies shows that lower-level employees who lack pricing authority often perform at least four tasks related to cartel management: sharing information, communicating assurances, evaluating market conditions, and fine-tuning the cartel price. Each of these is discussed in turn, with examples from actual conspiracies.

First, cartel partners need to share information related to pricing plans, costs, production, and market conditions. Cartel decision-makers use information supplied by lower-level employees to fix prices.

The information shared among lower-level employees often winds up in the grasp of higher-level executives who do have pricing authority. Senior executives sometimes order their subordinates to exchange price information with their competitors.

This inter-competitor exchange of sensitive information by lower-level employees is often critical to cartel success and stability. For example, in the citric acid cartel, lower-level employees ran the day-to-day cartel operations.

Second, beyond exchanging factual information and projections, cartel partners often use lower-level employees to communicate their assurances that each firm will, in fact, abide by the cartel agreement. For example, in the air cargo price-fixing conspiracy—run by many of the world’s major airlines, including Air France-KLM, Alitalia, American Airlines, British Airways, Delta, and Lufthansa—lower-level employees would communicate through phone calls and emails with their counterparts at competing airlines to ensure that every cartel member would increase their fuel surcharge by the agreed-upon amount.

In order to prevent any miscommunication about price movements, cartel partners keep each other apprised of their planned, or hoped-for, changes in price. In many price-fixing conspiracies, member firms inform each other of their pricing plans in order to prevent their co-conspirators from incorrectly inferring that a cartel member is either cheating on the cartel agreement or abandoning it in some way.

Third, lower-level employees keep abreast of market conditions. As consumer demand, interest rates, exchange rates, or prices of inputs fluctuate, cartel managers monitor the situation and determine whether such fluctuations warrant any changes in the cartel’s fixed prices or market allocations.

Fourth, lower-level employees often fine-tune the cartel’s fixed price. Cartel management entails overseeing the fluctuations in price that are common in cartelized markets. Over time, colluding firms may raise prices several times.

In light of the information transmitted among cartel partners, price-fixing conspirators will often need to adjust their fixed prices. This is often not executive-level work. If the initial fixed prices need to be adjusted in response to changes in foreign exchange rates, for example, this can be done by lower-level employees who report back to the cartel. While some cartels entrusted only high-level executives with price adjustments,an employee who was indisputably ‘involved in setting prices’ (even though he personally lacked ‘ultimate pricing authority’) ‘relayed regular reports about competitors’ pricing and production directly to pricing authorities.’” president and CEO “would ‘bless’ proposed flexible foam price increases” advocated by their subordinates who had coordinated those price increases.

This fine-tuning process is particularly import

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