What the $1.1 billion LCD price-fixing settlement means for you
POSTED: Monday, July 16, 2012 - 11:45am
UPDATED: Monday, July 16, 2012 - 11:49am
UNITED STATES (CNNMONEY) — For more than eight years, many of the world's biggest technology manufacturers allegedly colluded to inflate prices for the liquid crystal display (LCD) screens used in televisions, computer monitors, and laptops. Last week, three of them agreed to a $571 million settlement, the latest in a string of deals with payouts that now top $1.1 billion.
Here's the irony: None of this will actually lower the prices consumers actually pay for gadgets, analysts predict. LCD prices crashed through the floor in recent years, and price tags have already plunged for items like big-screen TVs.
"It's hard to imagine consumers are going to see any real change," says Paul Semenza, an analyst with NPD DisplaySearch, a research firm that specializes in display-related industries. "For the past few years, most major display companies have lost money."
The LCD legal battle focus on the years between 1999 to 2006, during which a collection of Asian manufacturers and their U.S. affiliates conspired to artificially inflate prices, according to prosecutors. The issue sparked a series of class-action lawsuits and a coordinated prosecution effort by a group of state attorneys general.
A first round of settlement deals in December netted $538 million from electronics manufacturers including Hitachi, Sharp and Samsung. Last week's deal adds an additional $571 million from Toshiba, LG and AU Optronics.
The settlements are still awaiting court approval, but the proposed deal sets aside a minimum of $692 million for partial refunds to compensate consumers residing in 24 states, along with the District of Columbia. The rest of the cash will go to various state treasuries as penalty and refund payments, and to the attorneys involved in the lawsuits.
As with most class-action suits, consumers will probably take home skimpy refund checks. Millions of qualifying gadgets were sold during the eight-year stretch covered by the settlement deal. A representative of the New York Attorney General's office, one of the architects of the settlement deal, said it is hard to predict how many people will come forward to file claims.
Those who are eligible to file a claim can register for updates at https://lcdclass.com/. Information about the claims process will be posted there when the settlement terms are finalized.
The manufacturers involved in last week's settlement maintain that they did nothing wrong.
Both Toshiba and LG issued statements saying they deny the price-fixing allegations but settled the case to avoid the expense and distraction of protracted litigation. AU Optronics said it is withholding commenting until the settlement gains court approval.