March 13, 2012 / 9:56 PM / 7 years ago

Jury convicts AU Optronics of LCD price-fixing

SAN FRANCISCO (Reuters) - A jury found AU Optronics Corp guilty of criminal price-fixing in a case in which the Taiwan-based electronics company was accused of conspiring with other manufacturers of liquid crystal display panels.

Employees work on LCD panels in the new AU Optronics plant in Trencin June 28, 2011. REUTERS/Radovan Stoklasa

Former company Chief Executive L.J. Chen was found not guilty of conspiring to fix prices. Family members wept with relief when the verdict was read out on Tuesday in a San Francisco federal courtroom.

U.S. prosecutors accused company executives of meeting more than 60 times at luxury hotels to fix prices of LCD panels, a conspiracy they say cost the U.S. economy billions of dollars.

On Tuesday, the jury decided that the total amount of gross gains derived from the conspiracy — in which several other producers have been accused — came to at least half a billion dollars.

Dennis Riordan, an attorney for AU Optronics, said after the verdict that the jury was not asked to answer the most pressing question — whether U.S. price-fixing laws apply to acts committed on foreign soil.

Other companies, including LG Electronics Inc, have already pleaded guilty in the LCD probe, while Samsung Electronics Co Ltd cut an early deal to avoid prosecution.

AU Optronics and five of its current and former executives — including Chen, who remains a top executive at the company — pleaded not guilty. In addition to L.J. Chen, the jury acquitted one other executive, and convicted two. It deadlocked on another executive.

One of those convicted, Hsuan-Bin Chen, is currently vice chairman of the company’s board.

U.S. District Judge Susan Illston will sentence the two men found guilty and impose fines against the company after she hears motions for a new trial.

Before the trial, Riordan said, Illston rejected a motion to dismiss the case because the alleged crimes took place outside the United States.

“This is a huge case,” he said. “It’s really the appeal that’s going to determine what this means.”

In a statement, the U.S. Justice Department said AU Optronics faces a maximum fine of $1 billion.

“The jury’s decision to hold not only the companies but also their top executives accountable for their anticompetitive actions should send a strong deterrent message to board rooms around the world,” said Acting Assistant Attorney General Sharis Pozen.

One juror, a middle-aged white woman who declined to give her name, said the jurors took the testimony of those who pleaded guilty in the LCD probe “with a grain of salt” but relied on it nonetheless.

“All the decisions were difficult. We took it very seriously,” she said. “We didn’t say, ‘It’s just a corporation, it’s easier to convict.’”

The jury also convicted Hui Hsiung, and it acquitted Tsannrong “Hubert” Lee. The panel deadlocked 8-4 in favor of convicting Shiu Lung “Steven” Leung, according to the juror, who said it spend three days wrestling with Leung’s fate.

U.S. prosecutors will have to decide whether to retry Leung.

Jurors deliberated for more than one week.

During trial, one of AU Optronics’s lawyers argued that the company “competed fiercely” and the mere exchange of information between companies is not illegal. The company is one of the world’s largest screen manufacturers.

The criminal trial began in early January and prosecutors presented several witnesses. The company and its executives called only one expert witness before resting their case, according to one defense attorney involved in the proceedings.

The case in U.S. District Court, Northern District of California, is United States v. Hsuan Bin Chen et al, 09-cr-00110.

Reporting by Ronnie Cohen, Edwin Chan and Dan Levine; Editing by Gerald E. McCormick and Steve Orlofsky

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