Three Asian electronics manufactures on Wednesday agreed to pay a combined $585m after admitting they conspired to drive up the prices of liquid crystal display monitors that were bought by Dell, Apple, Motorola, and others. LG Display of South Korea, Sharp of Japan, and Chunghwa of Taiwan pleaded guilty to conspiracy charges …
Price fixing happens
Price fixing happens in every sector of IT manufacturing. Nothing new here. They just got caught this time. Many others get away with it consistently.
People will always pay a premium for in demand items. If they sold iPhones at $100 without contract my guess is Apple would not be able to make them fast enough.
These things balance out. In one way it's a good thing as we are already buying and throwing away technology too fast which has adverse effects on the enviroment etc.
Paris knows all about throwing things away.
It's amazing to me...
I want to know why the Feds don't prosecute the oil companies for collusion? If the Feds can catch criminal LCD makers in Asia, why can't they prosecute the oil companies in the U.S.?
There is no way on the face of the earth that oil suppliers and refiners can process and deliver gas, Diesel and heating oil to the different regions of the U.S. and sell their products at the same inflated prices without collusion. The fact that the CEOs or execs from the oil companies don't meet in a back room and say, "let's raise the price of a gallon of gas to $4/gal. over the next six months", doesn't mean they haven't agreed to this through collusion. It's criminal to allow these monopolies to destroy economies world wide. Their record profits on lowered sales volume tells the real story.
Oil is a commodity. LCDs are not.
Paul Smith, the price of gas is set by the price of oil (projections based on oil production), which is traded publicly, and is pretty cut and dry. LCD panels are not, nor are most of their components. So that's the problem with "catching" oil companies. What you're actually complaining about is a legitimate gripe with the stock market, which is a sort of legal monopoly of sorts. And on that point I agree with you.
good Bill bc he knows what I'm talking about.
Where's the line?
So in a nice capitalist society like the US, where's the line between capitalism and price-fixing? What would have happened if each of the manufacturers independently came up with the same price -- would that be allowed? My point is this -- the government, industry, and business love to talk about capitalism and supply and demand, always saying how they'll drive "the market" and "the market" will decide. So why does it matter if manufacturers talk to each other about prices? If capitalism and supply and demand are the driving forces, then it won't matter.
Put more simply -- "worth" and "value" are abstract concepts based on what people are willing to pay. If most people are only willing to pay $1 for Windows Vista, then it's worth $1. If most people are willing to spend $1000 on it, then it's worth $1000. If you don't like the price something is offered at, don't buy it. It really is that simple. The capitalist society has always been about finding and charging the maximum that people are willing to pay. And I have a feeling that is one of those things that will never change.
Large fines, huh?
So.. Who gets the money? Betcha it's not the consumer who had the price-gouging passed on to their purchases.
If 90% of the people think it is worth $1 and 10% think it is worth $1000 then it is worth $1000.
" If you don't like the price something is offered at, don't buy it." No it isn't that simple sadly. In this case it is tantamount to saying that if Apple doesn't like the price of the LCD displays it can simply stop making iPods. That is the point of collusion and monopolies (and collusion is simply another form of market monopolisation.) It is always a matter of squeezing the customer, without driving them out of business. There is a measure of brinkmanship. One has to be sure that one doesn't squeeze enough that the customer is tempted to do something dramatic - like setting up their own LCD plant. The large capital barrier to entry and ownership of patents can help here.
The issue with monopolies and collusion is that they distort the market. By making the market one sided. The ideal of the market is that competition exists. Without and the market fails. Protecting this ideal is a serious thing. Whilst individual companies love the idea of controlling a market, it isn't a market, essentially by definition, if they do.
Same with oil. Come winter people need to heat their houses. Disliking the high price of oil does not allow them to decide not to buy it. Eventually something gives - they move to another country - or another source of energy becomes cost effective. But the choice to simply walk away often does not exist. Commodity markets are an interesting middle step. In principle they should reflect a market driven price. Mostly they do. But it is possible to distort them, at least for a while. The Hunt brothers and their attempted cornering of the silver market is perhaps one of the best known. Cornering the market for oil is always going to be very hard. OPEC does not not control enough of the world's reserves to do so, and has traditionally had a very poor time controlling its own members.
I don't like house prices here in the UK, does that mean I can sue homeowners, property developers and estate agents for price fixing?
"let's raise the price of a gallon of gas to $4/gal. over the next six months"
Americans are funny. Try living in the UK and then see if you think that's anything other than an incredible bargain.
"I don't like house prices here in the UK, does that mean I can sue homeowners, property developers and estate agents for price fixing?"
If they were engaged in cartel actions and fixing prices, yes. But they are not, are they? If you want sell a house you don't get taken aside by the realtor and told "The cartel determined price for your house is XX pounds. The boys will be very upset if you take less." No, the realtor, being the slimeball he is, talks up how much you will get for the house, advertises it for some idiotic price, and, up until a few months ago, a chain of idiot banks with managers on conflict of interest inducing bonus packages would lend the potential buyers enough money to pay the eye watering asking price. And so the prices rise. That isn't price fixing. It is just stupidity. Now that the bubble has burst you can hardly suggest there is price fixing occurring. It is a buyer's market out there. Sure, no-one has to accept rock bottom either, but at the moment the sellers might be in the mood to accuse the few buyers with money left of building a cartel to drive prices down. Then again, maybe that is what you don't like about the UK house prices. You didn't say if you were buying or selling.
It is all a knock on effect
Given the Apple example the high cost of LCD screens may have effected the retail price of ipods for the end user. The customer will eventuallyt suffer out of monopolies.
@Francis Vaughn & AC
I've thought for a long time that having the (untrained, unregulated) Estate Agents value the property that they are going to sell, when they make a %age comission from and get money for each month that they are advertising it, is an enormous conflict of interest and bad for the customer.