AU Optronics: Will Book US$223 Million Additional Provision for U.S. Price-Fixing Case in 3Q

   By Lorraine Luk 
 

TAIPEI--Taiwan's flat panel maker AU Optronics Corp. (2409.TW, AUO) said Friday it will book a US$223 million additional provision for a price-fixing case in the third quarter while it is appealing the guilty verdict by a U.S. court.

The statement came after a U.S. federal judge ordered Taiwan-based AU Optronics to pay US$500 million for participating in a conspiracy to fix prices on liquid-crystal-display panels.

U.S. District Judge Susan Illston also sentenced H.B. Chen and Hui Hsiung--senior AU Optronics executives during the period of the conspiracy--to three years in prison. They were each ordered to pay fines of US$200,000.

The penalties are among the stiffest on record for antitrust cases, but they fell short of the unprecedented remedies the U.S. Justice Department had requested.

The department won a conviction against AU Optronics and the executives in March, and it sought a fine of $1 billion against the company--twice the largest single fine it has ever collected in an antitrust case. It also asked Judge Illston to impose 10-year prison terms on the executives, far beyond the four-year jail sentence that stands as the current record for a violation of the Sherman Antitrust Act.

Prosecutors argued the proposed penalties were needed to deter large, highly-profitable price-fixing conspiracies in the future.

The case was a rare event in the antitrust world, as most companies never challenge government price-fixing allegations at trial because of the potentially staggering fines involved.

Write to Lorraine Luk at [e-mail]

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