On December 29, 2011, it was announced that 6 makers of TFT-LCDs panels agreed to enter into a $355 million settlement with consumers to resolve antitrust, price-fixing, and other claims.
The case is IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION. As articulated on counsel’s website “from at least January 1, 1996 through December 11, 2006, Plaintiffs allege that defendants operated a cartel, the purpose of which was to raise, fix, and stabilize the prices of TFT-LCDs.” TFT-LCD panels appear in many common technology devices such as televisions, laptop computers, and mobile phones. The IN RE: TFT-LCD case spans 23 states, 2 classes of Plaintiffs (both direct and indirect consumers), 42 defendants, and claims in federal and state law.
While the settlement amount is “post-worthy” enough in itself, the case carries several other aspects worth discussing. First, indirect consumers are a class of their own in this case. Indirect consumers are consumers that did not purchase the TFT-LCD products from the maker, but rather from a distributor, wholesaler, or retailer. Second, the case alleges claims under federal laws, but the case also alleges a myriad of state law claims ranging from antitrust to unjust enrichment. The differing state statutes each carry similar and unique prohibitions and actionable elements.
In the world of franchising, the cautions regarding antitrust issues and price setting have always been keen. Franchisors may supply, recommend, or authorize products, services, and equipment to franchisees. Franchisors may provide suggestive pricing or consultation regarding consumer pricing. With recent developments in case law, the concerns of antitrust and price setting have subsided. However, the IN RE: TFT-LCD (FLAT PANEL) ANTITRUST LITIGATION case is a reminder of the liability involved in antitrust and price fixing claims.
LESSONS FROM THE COURT: You can fix an authorized vendor list or fix a list of suggested retail prices, but don’t conspire to fix prices or competition. Allow for approved vendors and alternative pricing.