Prison Sentences in Antitrust Case

If you don’t like the idea of antitrust enforcers making Google help its competitors , consider this: Sometimes, antitrust law results in prison terms.

For daring to set the prices of their products the way they thought best, businessmen H.B. Chen (center) and Hui Hsiung (left) have been sentenced to three years in prison . Their crime: Their chosen way of setting prices was to do so in concert with their main competitors.

The sentences were imposed last week by U.S. District Judge Susan Illston, who also imposed a fine of half a billion dollars on the Taiwanese company they helped lead, AO Optronics.

The Justice Department said the competitors who worked together to set prices were all the major producers of regular-size LCD panels—that is, that if you have a laptop or an LCD display on your desktop computer, you have probably benefited from the work of these individuals and their companies. Seven companies pleaded guilty ; AO Optronics went to trial.

We are now so used to the notion that “price-fixing” is illegal that these sentences may seem perfectly appropriate, so let me take a moment to remind you what the real issue is here. Chen, Hsiung, and their colleagues and competitors made the LCD screens most of us use every day. They sold them at a price they set, which their customers (who ultimately sold them to us) paid willingly. This is not evil: it is good, as the presence of their products on my desk and probably yours testifies. What they are being punished for is cooperating with one another to get the best prices they could for their products.

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