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AU Optronics could face up to $1 billion in fines in LCD price fixing scandal

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AU Optronics has been convicted of fixing prices for LCDs, and could face a fine of up to $1 billion.

AU Optronics
AU Optronics

Taiwan-based AU Optronics has been convicted, along with two former executives and a US subsidiary, of being part of an LCD price-fixing conspiracy that lasted for five years. Seven companies have already pleaded guilty to the charges, paying out a total of $890 million in fines, with LG topping the list with a $400 million fine in 2008. But AUO could end up paying even more — the company faces a fine of up to $1 billion after a jury found that it earned $500 million due to the scheme. According to the US Department of Justice, AUO regularly participated in secret monthly meetings with competitors to discuss pricing. The meetings took place in hotel conference rooms, karaoke bars, and tea rooms in Taiwan and spanned from September 14th, 2001 to December 1st, 2006.

In addition to LG, both Sharp and Chungwa are among those who have plead guilty to the allegations. Sharp was forced to pay $120 million in 2008 after it admitted to fixing the prices on LCDs sold to Apple, Dell, and Motorolla, which ended up being used in monitors, laptops, 2006-era RAZRs, and iPods. Chungwa received a fine of $65 million during the same trial. According to Reuters, AUO was the only company to plead not guilty. It's not just fines though, as a number of top executives from these companies have been forced to serve time. So far 17 have been charged, with 10 pleading guilty. Together they've served a total of 2,681 days in jail.

For its part, AUO claims that the evidence presented at the eight week-long trial in San Francisco was "distorted and incomplete." According to a company statement, while it admits to participating in meetings in Taipai, those who were there didn't actually have pricing authority. AUO also claims that during the five years in question it actually priced below the alleged fixed prices, citing "undisputed evidence" presented in court. The company plans to appeal the verdict, while the the fine is expected to be issued during the next few months.