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Fines levied in DS LCD cartel case

Sharp and Hitachi Displays busted by JFTC.


The Japan Fair Trade Commission (JFTC) announced today that it has issued a cease and desist order against Hitachi Displays and Sharp over alleged price fixing in the manufacturing of LCD screens for the DS. It also imposed a fine on Sharp.

As first reported in late February, JFTC conducted an on-site investigation of the two Osaka-based firms over possible price fixing in the sale of LCD screens to Nintendo for use in the DS. The allegations first surfaced when JFTC was investigating ten companies, including Sharp, in 2006 over a possible international price cartel in the production of general LCD panels.

Today, JFTC issued a statement saying that following the investigation, it found that the two firms had engaged in activities in violation of an article of the Antimonopoly Act prohibiting unreasonable restraint of trade. The Commission reported separate violations for the DS and DS Lite.

For the DS, JFTC alleges that even as Hitachi Displays began negotiations with Nintendo in late 2005 and beyond over prices for the system's LCD, it was also speaking with Sharp about keeping prices from dropping no more than 100 yen from the then current prices. This price fixing covered orders spanning October 2005 to March 2006.

For the DS Lite, the two firms exchanged information between September and November 2006 about upcoming price offers to Nintendo. The resulting orders covered January to March 2007.

The Commission issued a fine of 261,070,000 yen to Sharp over LCD units for the original DS model and a cease and desist order against both firms on the exchange of pricing information for the DS Lite.

Responding to the charges, Sharp denied trade violations and said it was looking into a response, including an appeal.

Sharp recently struck a deal with the U.S. Department of Justice that will see it pay $120 million in fines over a separate LCD price fixing investigation.

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