Seven LCD screen makers have joined together to offer $US553 million to settle charges that the screen industry has acted as a price-fixing cartel. The case has dragged on since 2006, when authorities in Japan, Korea, the EU and the USA first began investigating the LCD industry for anti-competitive conduct. So far, Reuters …
Who see's this money then?
Will any be given to consumers who've been forced to pay over the odds?
Why not comfort yourself knowing this will make manufacturers think twice about pulling the same thing?
That said knowing manufacturers, they'll probably just hide it better next time.
How so? Other industries being caught price fixing didn't deter them (enough).
I seem to remember that a company found guilty of anticompetitive practices can be fined a significantly higher amount if they are later found guilty of doing it again - I would speculate they are managing their future risk by 'buying' and end to the investigation that won't move them up the fine scale. Anyone with a better knowledge of cartel law care to elaborate?
Indeed! They do absolutely nothing about the anti-competitive practices of the movie & music industries!
Er, well actually on this occasion...........
"The bulk of the latest payment is made up in payments to “indirect” purchasers – that is, customers of finished products like TVs and computers using the screens, rather than the OEMs that were the cartel’s direct customers."
...........I think that the report does make it clear that the end-point customers *will* be compensated - as they should be given that they have almost certainly lost more (collectively) than the OEMs did.
So how do I claim my share?
Well, the report certainly trys to spin it that way, but
it isn't clear to me that will actually happen. When you and I see that statement we think "Joe Blokums who overpaid $40 for his 16" LCD is getting can get a check from X in compensation for overpaying." And if that's the case, yes justice will have been done. But, it could also be a case of X will send Joe a rebate coupon for $60 on his next purchase. It still gets recorded by X as payment of the penalty, but I expect you and I would agree that justice hasn't been done in that case.
Remember, the attorney's general arguing the case don't really give a shit about how the money is paid, just as long as the number is big enough to get them decent PR; what they really care about is the bit where the companies setup internal processes and departments to prevent it from happening in the future. Or, translated into plain English, the lawyers for the government now have a permanent seat at the decision making table of the companies.
RE: "Well, the report certainly trys to spin it that way"
You have a point - we'll just have to see how it *actually" plays out.
"Remember, the attorney's general arguing the case don't really give a shit about how the money is paid, just as long as the number is big enough to get them decent PR; what they really care about is the bit where the companies setup internal processes and departments to prevent it from happening in the future."
No, I think the AG interest stops at the PR numbers.
The AG's BOSSES want the seat at the decision making table. At least, that seems to be how it's going in the US.
"nearly $US900 in fines and settlements have been paid"
Damn, that'll reach them.
You didn't read the linked article? It's missing "million"
it's still pocket change to them. Most electronics are sold at over 200% markup*.
(*) figure based on a discussion I had with a taiwanese sales rep at an expo some years back.
We should be so lucky
I worked in the PC industry for 15 years and high volume commodity items are typically sold at 30% margin. Actual profit is much less because the 30% has to cover fixed overheads like sales, distribution, R&D and other costs. Everybody's goal is to "do an Apple" and get to 67% margin / 200% mark-up, but it's very hard to do.
I think you'll find that from the point of manufacture
to the final delivery there is a 200% markup. Which doesn't mean I disagree with your post. Every time an item passes through an entity, they need to make a 30-50% margin to get a 7-20% profit. But if you pass that through a couple of organizations, you quickly have a 200% margin compared to the cost of base components at the original point of manufacturing. My father frequently makes the point that the cost of the ingredients for a loaf of bread is about $0.05 US, while the store brand breads sell for $1.19 and the brand names sell for $3.79. Yet everyone knows grocery stores and food distribution chains have some of the lowest margins and profits of all US markets.
So when do I get my compensation?
Sumsung's really been in the wars this year.
Bets on above-inflationary price rises next year, as they try to reclaim their legal costs from the channel?
I'd put that at 50-50.
Remember, the other option is they keep the prices the same but reduce cost/quality of manufacturing to recoup the money. But yeah, they'll recoup the money somehow.
Until those cu*ts are put in prison, these fixing will continue ... shame!
"Seven LCD screen makers have joined together to offer $US553 million". Sounds like they're colluding again. Surely that deserves another fine :-)