26 replies to this topic

[Michael Hardner]

link

ALBANY, N.Y. — New York Attorney General Eric Schneiderman says seven companies will pay $553 million to settle allegations they inflated prices for liquid crystal display screens used in televisions and computer monitors.

The corporations Chi Mei Innolux Corp., Chunghwa Picture Tubes Ltd., Epson Imaging Devices Corp., HannStar Display Corp., Hitachi Displays Ltd., Samsung Electronics Co. Ltd. and Sharp Corp. along with U.S. affiliates are settling antitrust claims brought by eight state attorneys general and private class-action attorneys.

I guess we can't count on corporations to act in our best interest all the time. The Invisible Hand imagery doesn't work perfectly when applied to giant corporations.

[Shady]

link



I guess we can't count on corporations to act in our best interest all the time.

Who ever said we could? Who ever said we could count on anyone acting in anyone's best interest ALL THE TIME? That's an interesting premise you have there.

[Bryan]

Where are these inflated prices? Prices have been dropping like crazy for TVs and monitors.

[TimG]

I guess we can't count on corporations to act in our best interest all the time. The Invisible Hand imagery doesn't work perfectly when applied to giant corporations.

The story that does not get reported is how difficult it is to make these marvels of engineering which we take for granted. There are hundreds, if not thousands, of critical patents on the manufacturing process which are cross licensed between rivals. This makes collusion inevitable since one persons "price fixing" is another persons "patent license". It also ensures that no upstart has any chance to get into the business. I don't have any solution for the numerous issues that are raised here.

[punked]

Who ever said we could? Who ever said we could count on anyone acting in anyone's best interest ALL THE TIME? That's an interesting premise you have there.

You Shady you are the one who says this stuff all the time. You talk about how government regulators who police this thing to make sure people don't get ripped off are useless and how they always get in the way. How the market forces will fix it and bla blah blah. You are the one who insinuates this stuff all the time.

[Michael Hardner]

Who ever said we could? Who ever said we could count on anyone acting in anyone's best interest ALL THE TIME? That's an interesting premise you have there.

August1991 comes to mind who uses the terms "choice" and "consumer choice" interchangeably.

[MiddleClassCentrist]

It doesn't surprise me that Shady comes in to question the validity of the argument against price fixing.

[fellowtraveller]

this thread puzzld me since the prices of LCD equipment has plummetted, until I noteiced in the link that the time period covered is 1999-2006

[cybercoma]

link



I guess we can't count on corporations to act in our best interest all the time. The Invisible Hand imagery doesn't work perfectly when applied to giant corporations.

It doesn't work at all. Over 7 corporations had to pay $553 Million in this settlement. That's less than $79 Million per company. How long had this been going on? How much extra did they make? When it comes to a large corporation, this will merely be a cost of doing business. A quick Google search shows that Sharp, for instance, saw an increase in its profits during its 2010-11 fiscal year of $237 Million. In one year, their increase in profits is 3x the penalty. If I knew of a way to illegal procure some amount of money and knew that my punishment would be 1/3 of what I could get, I would be a fool not to engage in illegal activities. A 3x return on investment is a pretty sweet deal.

[Manny]

It doesn't work at all. Over 7 corporations had to pay $553 Million in this settlement. That's less than $79 Million per company. How long had this been going on? How much extra did they make? When it comes to a large corporation, this will merely be a cost of doing business. A quick Google search shows that Sharp, for instance, saw an increase in its profits during its 2010-11 fiscal year of $237 Million. In one year, their increase in profits is 3x the penalty. If I knew of a way to illegal procure some amount of money and knew that my punishment would be 1/3 of what I could get, I would be a fool not to engage in illegal activities. A 3x return on investment is a pretty sweet deal.

Agreed. But what is never considered and now comes to view is the loss of consumer confidence that stories like these create. The more they screw people, and the more we know about it, the more widespread and deeper the problem becomes. Allahu akbhar

[August1991]

But what is never considered and now comes to view is the loss of consumer confidence that stories like these create. The more they screw people, and the more we know about it, the more widespread and deeper the problem becomes. Allahu akbhar

WTF?

Only in the US...

The companies denied responsibility and said in the pact that they settled to avoid the expense of protracted litigation. But Schneiderman declared victory.

"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.

There are LED, LCD and Plasma screens (and even the old CRTs), and people say that collusion limits our choices.

Frankly, I would rather live in a world of private collusion with LCDs rather than live in a world of government regulators prosecuting so-called private collusion without LCDs.

[TimG]

Frankly, I would rather live in a world of private collusion with LCDs rather than live in a world of government regulators prosecuting so-called private collusion without LCDs.

I find it interesting that no one bother to respond to my post where I pointed out that cross licensing of patents which is essential for competition will give the appearance of collusion even when there is none.

[August1991]

I find it interesting that no one bother to respond to my post where I pointed out that cross licensing of patents which is essential for competition will give the appearance of collusion even when there is none.

I think rather that cross licensing of patents is evidence of collusion, but I just don't care.

I fear State monopolies far more than any private collusion scheme.

How long did it take Fed-Ex (and email) to compete with the Post Office? How long did it take plasma screens to compete with CRTs? As long as their collusion is not State-enforced, I'll let these guys make monopoly profits and use the money to innovate.

-----

Hilarious. We have a wheat board, egg marketing board, milk marketing board, health/education ministries and various public/private sector unions. They are all State-sanctioned monopolies.

And the OP is worried about a supposed cartel in a sector of changing technology.

Price fixing?

In Canada, who fixes the price of a teacher? Or a litre of milk?

Edited by August1991, 28 December 2011 - 11:45 PM.

[Michael Hardner]

So you're NOT against price fixing ? You just don't like government.

"I don't care who robs me as long as he's not working for the government."

Ok, nothing really to add to that.

[Bonam]

Err, it's not "robbery", obviously, since no one is forcing you to buy anything you don't want. That being said, price collusion should certainly be investigated and cracked down on when it occurs, and it looks like that's what happened here. The efficiency of the free market is based on competition, not monopolies, and preventing monopolization of the market by a company or group of companies is one of the valid roles of government in a free market system. Since the companies got fined for their infraction, it seems to me like the system is working. The amount of the fine was negotiated and the prosecutors obviously agreed to it, so they must have felt that the fine was appropriate for the situation. Regardless, it should be noted that the price of this technology has been dropping quickly despite the alleged collusion, including in the period 1999-2006.

Edited by Bonam, 29 December 2011 - 02:28 AM.