Epson To Plead Guilty, Pay $26M In TFT-LCD Case

By Shannon Henson

Law360, New York (August 25, 2009) -- Epson Imaging Devices Corp. has agreed to plead guilty and pay a $26 million criminal fine for participating in a price-fixing conspiracy in the sale of thin film transistor liquid crystal display panels to Motorola Inc. for the Razr cell phone.

Epson, a subsidiary of Seiko Epson Corp., also agreed to cooperate with the ongoing antitrust probe of TFT-LCD sales as part of its plea agreement, which needs to win court approval, the U.S. Department of Justice said Tuesday.

The information filed by the DOJ in the U.S. District Court for the Northern District of California alleges that Epson participated in a conspiracy to fix the prices of TFT-LCD panels sold to Motorola from the fall of 2005 to the middle of 2006.

Japan-based Epson is charged in the information with carrying out the conspiracy by agreeing during bilateral meetings, conversations and communications with unnamed co-conspirators in Japan to sell TFT-LCDs to Motorola at predetermined levels.

Epson issued price quotations in accordance with the agreements reached. It also exchanged information on sales of TFT-LCD sold to Motorola for the monitoring of the agreed-upon prices, the DOJ said.

A representative of Epson didn't immediately respond to a request for comment Tuesday.

The plea agreement and criminal case is just the latest development in the investigation.

In November 2008, the DOJ announced that LG Display Co. Ltd. had agreed to plead guilty to its alleged role. The company agreed to pay $400 million, which is the second-largest criminal fine ever imposed by the DOJ's Antitrust Division.

At about the same time, Sharp Corp. pled guilty to fixing the prices of TFT-LCD panels sold to Dell Inc., Apple Inc. and Motorola Inc. and agreed to pay $120 million. Chunghwa Picture Tubes Ltd. pled guilty to participating in the same worldwide conspiracy as LG and agreed to pay $65 million.

In May, Hitachi Displays Ltd. pled guilty to participating in a conspiracy to fix the prices of TFT-LCD panels sold to Dell for use in desktop monitors and notebook computers from April 1, 2001, to March 31, 2004. The company was ordered to pay a $31 million criminal fine, the DOJ said.

Nine executives have been charged to date in the DOJ’s ongoing investigation. In April, the department announced a plea agreement reached with Bock Kwon that called for the former president of LG’s Taiwan subsidiary to serve a year in prison and pay a $30,000 fine.

TFT-LCD panels are used in computer monitors, televisions, cell phones and other electronic devices. The worldwide market for the panels was $70 billion in 2006.

Counsel for Epson was not immediately available.

The case is USA v. Epson Imaging Devices Corp., case number 09-cr-00854, in the U.S. District Court for the Northern District of California.

--Additional reporting by Melissa Lipman