A Taiwanese manufacturer of liquid crystal display panels used in computers, smartphones and televisions was convicted in federal court in San Francisco today of conspiring with competitors to fix prices.
AU Optronics Corp. of Hsinchu, Taiwan, was found guilty by a jury in the court of U.S. District Judge Susan Illston after an eight-week trial.
The company’s American subsidiary, Houston-based AU Optronics Corp. America, and two company executives were also convicted of conspiracy to fix prices in violation of the U.S. Sherman Antitrust Act between 2001 and 2006.
Two other company officials were acquitted and the jury was unable to reach a verdict on a fifth executive charged in the case.
The display panels were used in computers, tablets, mobile telephones and televisions made by American companies including Dell Inc., Hewlett-Packard Co. and Apple Inc., according an indictment filed in 2010.
The trial jury also concluded that the financial gains from the conspiracy by all the companies in the conspiracy exceeded $500 million, a finding that clears the way for Illston to impose a fine of potentially twice that amount when AU Optronics is sentenced.
A sentencing date has not yet been set.
The U.S. Justice Department said seven other companies have pleaded guilty in its antitrust probe of panel prices and have been sentenced to pay criminal fines totaling more than $890 million.
Acting Assistant Attorney General Sharis Pozen, who heads the department’s Antitrust Division, said, “The jury finding $500 million in ill-gotten gains by members of the cartel demonstrates the harmful effect of this price-fixing conspiracy on American businesses and consumers.”
“The jury’s decision to hold not only the companies but also their top executives accountable for their anticompetitive actions should send a strong deterrent message to board rooms around the world,” Pozen said.
According to the indictment, the price fixing was carried out in Taiwanese hotels, restaurants and cafes in secret monthly sessions known as “Crystal Meetings” among representatives of AU Optronics and several other Taiwanese and Korean firms.
Defense attorney Dennis Riordan said AU Optronics will file a motion for a new trial and if it loses that bid, will appeal the verdict to the 9th U.S. Circuit Court of appeals.
Riordan said a key issue in the case is whether the standards for determining illegal antitrust activity in the United States apply to actions taken overseas.
“From the beginning of the case, it was clear that the real decision of whether these defendants did anything wrong is going to have to be decided by a court of appeal,” Riordan said.
Riordan said that while the display panels were used in devices made by American companies, the U.S. firms did not buy the panels directly, but rather bought products assembled by contractors in locations such as Malaysia.
Julia Cheever, Bay City News