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Hitachi Takes a Fall: $31 Million Fine

March 11, 2009 | Author: Ibex Marketing

Hitachi is the fourth defendant in the U.S. Department of Justice’s campaign against price fixing in the LCD panel market has pleaded guilty to a single felony count of conspiracy to fix prices. The complaint stems from the company’s deal with Dell to supply panels for notebook and desktop monitors from 2001 through 2004. The plea agreement calls for Hitachi to pay a $31 million fine, and to cooperate with the on-going antitrust investigation.

The other three companies — LG Display, Sharp, and Chungwa Picture Tubes (CPT) — have already agreed to pay more than $585 million in criminal fines. In addition, four individuals have pleaded guilty and been sentenced to serve time in jail. The DoJ’s press release on the subject is available here.

This antitrust investigation is interesting on two counts. First, it may have served as a deterrent to panel manufacturers in not just the notebook and monitor markets, but the HDTV market as well. One difference is that the HDTV market is tightly intertwined, and is primarily made up of Asian manufacturers. Unlike Dell in the notebook and monitor market, there are few American companies manufacturing HDTVs, and the few that do tend to have close ties to a single panel manufacturer as their primary supplier.

The other interesting aspect is the contrast between this case and the CUT FATT group led by Vizio that seeks some sort of redress on what they see as high licensing fees for patents used to create an HDTV. Instead of enlisting the DoJ, the group has instead turned to the FCC for enforcement. It will be interesting to see if the FCC route is as successful — and more swift — than the DoJ’s work on the panel supply issue.