US Jury Finds AU Optronics Executive Guilty of Price Fixing

   By Lorraine Luk 
 

TAIPEI--A federal jury in San Francisco Wednesday found AU Optronics Corp. (AUO) executive Steven Leung guilty of participating in a scheme to fix prices on liquid-crystal-display panels.

In response to the jury's findings, AU Optronics, Taiwan's second-largest flat screen maker by revenue, said Thursday it was "disappointed" with the result, adding that it was unaware of the timetable of the judge's final verdict.

This comes after a U.S. federal judge in September ordered that AU Optronics pay a US$500 million fine for fixing prices on LCD panels. The price collusion has resulted in higher prices for televisions, laptops and other consumer electronics, U.S. lawyers have said.

In the past, LCD suppliers like LG Display Co. and Samsung Electronics Co. (005930.SE, SSNHY) had agreed to pay fines to settle price-fixing cases in the U.S., although the penalty against AU Optronics is among the stiffest on record for antitrust cases.

In September, U.S. District Judge Susan Illston sentenced H.B. Chen and Hui Hsiung--senior AU Optronics executives from 2001 to 2006, when the price collusion allegedly took place--to three years in prison. They were each ordered to pay fines of US$200,000.

At the time, a jury had deadlocked on charges against Mr. Leung, leading to his retrial.

The Justice Department had 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, more than double the four-year jail sentence that stands as the current record for a violation of the Sherman Antitrust Act.

Prosecutors had 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 don't 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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