If That's Price Fixing, You're Doing It Wrong
from the price-fixing-means-prices-don't-drop... dept
There was plenty of news coverage this week of the $585 million in criminal fines against Sharp, LG and Chunghwa for price fixing on LCD displays. LG is paying the largest share at $400 million -- though, in the interest of disclosure, I should note that I'm writing this post using an LG LCD monitor that I got for quite a good price a few months back. And that brings up an issue I haven't seen addressed anywhere, other than by Adam Theirer: if this was price fixing, the companies were doing it wrong. Prices on LCDs were sliding very quickly, and it while there may have been some collusion among these three providers, it didn't seem to do much good. That's partly because there were plenty of other providers in the market, so any attempt at collusion was rather ineffective in stopping the rapid decline in prices. Sure, collusion is a bad thing, but we see this over and over again in antitrust enforcement: regulators keep punishing certain activities without bothering to see if they actually do anything to harm consumers.
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Filed Under: lcd, price fixing
Companies: chunghwa, lg, sharp
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not tech related. but.........
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Re: not tech related. but.........
The non-OPEC countries (Canada, Nigeria, etc.) just use it as an excuse to keep theirs high.
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Re: not tech related. but.........
Because OPEC is a "trade group" of member countries, all of which are outside of the US, with no legal presence inside the US, and thus not beholden to US law, including antitrust law. There is no equivalent international "antitrust" law.
OPEC chooses to operate as a united supplier. They are selling a commodity on the global market. As a purchaser on the global market, it is in our best interest to purchase that commodity at the best price offered.
Even though the OPEC member countries are colluding amongst themselves, they are still competing on price with suppliers who are NOT member countries, such as Russia and Canada, whom we also purchase from, when and as they are offering the best unit price.
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Sweet justice
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Re: not tech related. but.........
OPEC is not subject to US law, if you don't like the way they conduct business just do deal with them.
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Re: not tech related. but.........
But if we attempted to impose sanctions on OPEC, they could simply halt production and humanity on the glob stops moving in short order.
In short, they have us over a barrel.
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Re: Re: not tech related. but.........
Oh, I see what you did there. That's a pun.
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Re: not tech related. but.........
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Re: not tech related. but.........
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It's about damn time!!!
I've always wondered why LCD monitors never dropped in price the way other electronics do. The cheapest LCD monitor, at 13", I've seen was $149. That's quite a bit for a technology that's been around for a decade and its price hasn't fallen along the lines of other devices.
Even Blu-Ray player prices have dropped significantly in just 2 years. What was once $1000 is now $299. So why weren't LCDs falling this fast?
Now we all know and I'm glad someone took the time to figure out what the hell was going on, especially if TV manufacturers had to purchase screens outside the company. I don't find it coincidence that the "advent" of HD programming in the US has helped fuel this price gouging.
In other words: They didn't do it wrong. They did it just right but failed to do it enough to catch the eyes of those who do watch for this type of thing.
And Mike, if you've spent more than $100 for that LCD monitor, you didn't get a deal. You, like millions of others, got shafted by an industry who took advantage of its position.
Also, you can add a "+1" to my "fear" of big business, as I know this type of business practice exists.
I still remember when US cereal makers were caught price fixing, but instead of their prices dropping, they went up to pay for the fines of their fixing practices.
I guess this means LCD prices won't be dropping anytime soon, especially with this much of a fine.
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Re: It's about damn time!!!
This isn't /.
We don't rate comments here. =P
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Re: It's about damn time!!!
Blu-ray dropped because no one was buying them! That's how it works... If people are buying LCDs at the current price, why drop it?
In addition, you do not have a RIGHT to an LCD, nor do you deserve getting one for $50 just because you think you do. Sorry.
I'm not defending collusion right now, but if you think prices are too high, then don't buy it. How, exactly, do you get 'shafted' if you willingly pay a price for a product that someone has set? Did someone MAKE you buy it? Were you somehow otherwise forced or tricked into the purchase?
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Re: Re: It's about damn time!!!
Did you skip over the entire message of the original blog???
Competition drives down prices in electronics. Period. It matters not if I expect the prices to be lower. The market demands it. This is why branding exists. There's a much bigger difference in price for a Sony vs. a no-name brand.
Blu-ray dropped because no one was buying them! That's how it works... If people are buying LCDs at the current price, why drop it?
How did you come up with this? People are buying them. The price is dropping because more companies are manufacturing them.
People are being forced to buy at a current price based on this price fixing, sir. Focus.
In addition, you do not have a RIGHT to an LCD, nor do you deserve getting one for $50 just because you think you do. Sorry.
I don't get this part, but "deserve" is out of context here. I expect to pay $50 for an LCD because electronic prices, as a whole, drops within years. You have failed to mention why monitors aren't below $50.
I'm not defending collusion right now, but if you think prices are too high, then don't buy it. How, exactly, do you get 'shafted' if you willingly pay a price for a product that someone has set? Did someone MAKE you buy it? Were you somehow otherwise forced or tricked into the purchase?
First, prices aren't "too high". However, they're not where they're supposed to be. Please re-read the entire collusion issue and why these companies were fined.
How do you get shafted? Sir, if you can't figure this out on your own, I can not make it any easier for you when you're looking at LCD HDTVs and seeing how prices are quite high for a technology that's a decade old.
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Re: Re: Re: It's about damn time!!!
Go back and compare CRT monitor prices. That technology was over a decade old when LCD screens came around. I don't recall new monitor prices EVER getting as low as 50 dollars.
Also, LCD monitors didn't really start to take off as a consumer good until 2004. The VAST bulk of consumers still were getting CRT monitors because they were a better deal if screen size was more important to you.
TVs using similar technology also were still fairly expensive if you wanted them at any real size.
So what exactly is your point? Also, the other LCD makers were not just "no name brands." Chungwa I've never even heard of. Sharp LCDs I rarely see sold compared to LG in stores, and only on some websites. I see far more LCDs made by ASUS or Abit or even Samsung or Toshiba. How about Viewsonic? None of those are near "no-name brands" and are not involved in the collusion suit, yet their prices were similar?
And why is that? Maybe its because you don't generally need to buy a monitor that much. They tend to last for quite a while after all. I still have a 15" LCD from LG, one of their first generation ones. Only one dead pixel and that was from day 1.
Hell it took 3 years for them to stop having dead pixels when they shipped out.
No, I think I'm going to side with the rest here. This collusion fine doesn't make much sense. It targets a narrow band and for no real point. 200 bucks for a monitor sounds about right. I know I wouldn't mind it being cheaper, but when getting a system or upgrading that's reasonable.
The only people it isn't is for students that work 20 hours a week. Even with minimum wage and 40 hours a week I've been able to save up and buy new computer systems. You just have to budget.
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Re: Re: Re: It's about damn time!!!
People are being forced to buy at a current price based on this price fixing, sir. Focus.
Nay nay. Nobody is "forcing" you to buy something at a price you feel is still unreasonable. I do not have a Blu-Ray player because the price has been unreasonable until very recently (just saw one finally under 2 bills this week). Still won't have one because the prices on "hi-def" TV's are still at a level I'm not fond of, but they're getting better. My TV works. I can wait. I want, but nobody's forcing anything. Oh, if I just must have one, I have to pay whatever the current "market price" is, but nobody has said that the market price is or has been unfair. Not even I - higher than I will pay, but that's me, doesn't mean it's an unfair price.
It's called "free market" and "capitalism".
I don't get this part, but "deserve" is out of context here. I expect to pay $50 for an LCD because electronic prices, as a whole, drops within years. You have failed to mention why monitors aren't below $50.
Because there's no incentive to price them that low. You lower price to collect new customers that will not buy at the higher price, but not until you've nearly exhausted those willing to pay the higher price. This maximizes your profits, and is the goal of a successful business in a free market. There's a point, however, below which dropping your price will not net you any significant increase in customers. There is no market incentive to ever go below this point.
First, prices aren't "too high". However, they're not where they're supposed to be.
If people are buying, and feel they are getting adequate value for their money, then the price is exactly where it should be, collusion or no.
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Re: It's about damn time!!!
The cheapest LCD monitor, at 13", I've seen was $149.
Here's a slew of 19" monitors, many for less than $149. You, sir, are shopping in the wrong places if you can't find better prices than that.
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Re: Re: It's about damn time!!!
Hrm? My linky doesn't work? Maybe it's some sort of Spam control... anyway, if you hover over "slew of 19" monitors", it looks like a link but doesn't seem to take you (at the moment) to a ProVantage search showing many 19" monitors, starting with an Acer for about $130... I'm not trying to advertise for any particular brand or vendor, I'm only using them in exemplar.
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Re: It's about damn time!!!
You might want to try reading the details. LCD prices have dropped FASTER than other electronics. But nice try.
I guess this means LCD prices won't be dropping anytime soon, especially with this much of a fine.
And you consider this to be a good thing?
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Re: #3
How the heck does taking money from a cash register have anything what so ever to do with price fixing on LCD monitors? That is quite twisted logic there. I have absolutely no idea what made you think it was a valid analogy.
I am going to need some explanation please as to how it fits into anything.
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Re: Re: #3
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Re: Re: Re: #3
Taking money out of the cash register will cause the company to raise prices on something to recoup the loss.
And any large company would not just take the 20$ loss in stride. They are greedy by nature. And they would prosecute the person taking the money. Probably for more reasons than to just make an example of them.
Although, there are similarities in that somebody taking money from the cash register doesn't stop you from going to a different store, just like these couple companies price fixing doesn't stop you from buying an alternative brand.
The analogy would have been a little more proper had it been worded around somebody taking 20$ out of your wallet when you purchase a LCD.
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Re:
The main point was, if no harm is done is there even a crime? If you stole 20 dollars from your employer there is some tangible harm done there, albeit a small amount. Contrasting with the LCD prices, what harm is done? Someone had to pay a still reasonable price for a luxury good, but there is a small chance it could of been cheaper so what do we do? We fine the companies involved like they won't raise prices in order to pay the fine off!
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Cartels are cartels
I agree with you on most things, but collusion plus price fixing is wrong, even if ineffective. Cartels do not produce positive externalities for anyone -- customers, non-cartel members, or, in this case, even for cartel members.
The effectiveness could be debated, anyway. If my company stops losing money at the rate of $100/unit on a product and instead loses money at $25/unit, I may not have made a profit, but in the long term I might outlast my other competitors. Or, at least keep my job.
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Re: Cartels are cartels
But no... we definetly shouldn't drill our own oil. /sarcasm
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Re: Re: Cartels are cartels
We cannot fine OPEC because we have no authority over them. Or, more precisely, we can fine them as much as we want, but we have no way to enforce such.
It's like if I were to fine you a million bucks for being a blowhard AC. I can do that. It's a legitimate fine which you duly owe here in Dosquatch-Land. Only you're not subject to Dosquatch-Land rules, so you respond "Hmf! WTF-Ever." And rightfully so that you should.
About the only thing we can do, as a consumer nation, is to stop purchasing from OPEC. We can do that, they cannot force us to buy their product. And we, as the largest consumer of their ware, will do far more harm to them than to ourselves by this action - you see, we purchase most of our oil from the silly canucks.
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Re: Re: Re: Cartels are cartels
We can fine them, we can tell them they cannot sell their product here until they pay the fine, but we cannot force them to and they can cut us off.
Most of the member countries hate the US anyway, give them a reason to sell it to other countries instead of us and they'll be gone.
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I'm with them
Obviously advances in technology and such meant that the strategy couldn't work forever, but I can't imagine LG would agree to pay $400 million unless there was a really strong case against them or that this strategy benefited them significantly.
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Re: I'm with them
Were ViewSonic, Abit, Acer, ASUS, Toshiba, Samsung, even Sony all not a part of the collusion? If so why weren't they undercutting the competition to generate more sales?
Something fairly big is missing here. You can't have a price fixing cartel with only a handful of players, many of which aren't even first choices for enthusiasts and OEM builders!
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Re: I'm with them
Were ViewSonic, Abit, Acer, ASUS, Toshiba, Samsung, even Sony all not a part of the collusion? If so why weren't they undercutting the competition to generate more sales?
Something fairly big is missing here. You can't have a price fixing cartel with only a handful of players, many of which aren't even first choices for enthusiasts and OEM builders!
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Not sure I get this..
Or that it's just not worth the effort to prosecute if I only maim my target?
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Re: Not sure I get this..
You are WAY off topic with that analogy. I think the guy who was talking about taking money from a cash register was closer than you are.
One action is attempting to kill somebody. The other does not put people in any sort of physical harms way. Better analogy please.
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read the story again
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Price Fixing
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Re: Price Fixing
The problem isn't just "greed" that everyone keeps using as a catch-all.
While the drug companies whined and complained, they alone don't have the power to do anything about it - other than paying off politicians.
If it wasn't for "lawmakers" doing the price-fixing (no one seems to care when gov't price-fixes things) then your drugs could still come from CAN. They not only fixed prices, but they outlawed anyone else!
Now, instead of backtracking and making the drugs market more free, they will just give us money to help pay for our drugs (that they got from us in the first place).
Not just greed. Greed and POWER.
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Uhh no, fixing is fixing
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Re: Uhh no, fixing is fixing
Were ViewSonic, Abit, Acer, ASUS, Toshiba, Samsung, even Sony all not a part of the collusion? If so why weren't they undercutting the competition to generate more sales?
Something fairly big is missing here. You can't have a price fixing cartel with only a handful of players, many of which aren't even first choices for enthusiasts and OEM builders!
If they were colluding, they can't be now unless every other one is as well!
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Re:
That's like saying "I just pulled the trigger. It was the bullet that killed that man"
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Re:
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Collusion is collusion..
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Price fixing
I rmember when RAM prices fell so much that companies were losing money with every modual they sold. They actually costed more to make than what they were selling for. I'm not sure if I would consider that 'healthy' competition.
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Crime based on outcome?
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Re: Crime based on outcome?
In fact, that the outcome determines the crime seems implicit in the fact that there is a separate crime for attempted murder. Pulling a trigger is not illegal, but if done with intent to kill, it offends society, thus the crime of attempted murder. Now if the outcome is a death, it is a much worse crime.
So no, don't let the attempt go wholly unpunished, but the outcome (actual harm to consumers, in this case) is (or should be) the most significant element in determining the degree of punishment.
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Re: Re: Crime based on outcome?
That reasoning has never made any sense to me. Personally, my feeling has always been that if you shoot (at) someone with the intention of killing them, you shouldn't get a lesser sentence because you're a lousy shot, or they were fortunate enough to turn aside at the last second and make it to a hospital in time. And that applies across the board as far as I'm concerned. I loathe anything that rewards stupidity or incompetence, and lessening criminal penalties because they failed in their attempt does exactly that. Am I glad the attempt was unsuccesful? Of course. But that doesn't change the nature of the criminal act, and in my opinion THAT should be the most significant element in determining the degree of punishment.
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Interesting
So lets say bye-bye to crimes like "attempted" murder.
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LCD TV
Profit on LCD TVs is nonexistent at my end of the chain.
I even ask people not to use credit cards because the 3% surcharge is more than the profit on the TV.
LG is not a top Supplier; it’s a conglomeration of Asian companies they have Cheap produces to flood the US market with.
Sharp being involved in this is a surprise they are a true LCD Manufacturer and were one of the first companies to tool up for LCD production.
The only way I see these three involved together would be if sharp were supplying these LCD panels to the other two.
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Re: LCD TV
I'm pretty sure the LG/Phillips partnership is a genuine large scale manufacturer of LCD panels?
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Attempted Theft
And to use a more apt analogy, if someone attempts to break into your house should they be punished. Let's say they couldn't get in the window, you have bars, maybe an alarm or whatnot. The point is they couldn't actually enter your house. But they were caught trying. So since their attempt at burglary was ineffectual, possibly due to their own incompetence, maybe through dumb luck, does that mean that they do not deserve any sort of punishment? I would assume that a rational person would think that they must be punished (even if unsuccessful) otherwise they will think there is no harm in trying to do it again next time.
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LCD price fixing was pretty obvious.
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Sue OPEC
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