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Dell Sues for LCD Price Fixing

March 17, 2010 | Author: Ibex Marketing

It has been widely reported that Dell sued five LCD panel manufacturers for price fixing last week. The companies named in the suit are Sharp, Toshiba, Hitachi, Epson, and HannStar.

Sharp and Hitachi have already made plea agreements with the U.S. Justice Department for price fixing. In 2008, Sharp agreed to pay $120 million in fines, and last year Hitachi agreed to pay $31 million.

Now, Dell’s complaint presumably is related to panels the company purchased to manufacture notebook computer screens and desktop computer monitors. However, if these LCD panel manufacturers were secretly cooperating on panel prices, some TV manufacturers may also have reason to complain. For now, there may be another shoe waiting to drop in this story.

The irony is that in spite of the apparent collusion, LCD TV prices have still plummeted by about 20% a year for the past few years. Imagine how low the prices might be if price fixing hadn’t put a drag on competition.