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NIALL E. LYNCH (State Bar No. 157959)
MICHAEL L. SCOTT (State Bar No. 165452)
HEATHER S. TEWKSBURY (State Bar No. 222202)
Antitrust Division
U.S. Department of Justice
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
Telephone: (415) 436-6660

Attorneys for the United States

FILED

2010 JUN 10 A 9:40

 

 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION



UNITED STATES OF AMERICA,    

                  v.

AU OPTRONICS CORPORATION;
AU OPTRONICS CORPORATION AMERICA;   
HSUAN BIN CHEN, aka H.B. CHEN;
HUI HSIUNG, aka KUMA;
LAI-JUH CHEN, aka L.J. CHEN;
SHIU LUNG LEUNG, aka CHAO-LUNG
LIANG and STEVEN LEUNG;
BORLONG BAI, aka RICHARD BAI;
TSANNRONG LEE, aka TSAN-JUNG LEE
and HUBERT LEE;
CHENG YUAN LIN, aka C.Y. LIN;
WEN JUN CHENG, aka TONY CHENG; and
DUK MO KOO,

                  Defendants.


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No. CR-09-0110 (SI)

VIOLATION:
Title 15, United States Code,
Section 1 (Price Fixing)

San Francisco Venue

Date Filed: 06/10/2010


SUPERSEDING INDICTMENT

The Grand Jury charges that:

I.

DESCRIPTION OF THE OFFENSE

1. The following corporations and individuals are hereby indicted and made defendants on the charge stated below:

  1. AU OPTRONICS CORPORATION;
  2. AU OPTRONICS CORPORATION AMERICA;
  3. HSUAN BIN CHEN, aka H.B. CHEN;
  4. HUI HSIUNG, aka KUMA;
  5. LAI-JUH CHEN, aka L.J. CHEN;
  6. SHIU LUNG LEUNG, aka CHAO-LUNG LIANG and STEVEN LEUNG;
  7. BORLONG BAI, aka RICHARD BAI;
  8. TSANNRONG LEE, aka TSAN-JUNG LEE and HUBERT LEE;
  9. CHENG YUAN LIN, aka C.Y. LIN;
  10. WEN JUN CHENG, aka TONY CHENG; and
  11. DUK MO KOO.

2. From on or about September 14, 2001, until on or about December 1, 2006 ("the period covered by this Indictment"), the exact dates being unknown to the Grand Jury, the defendants and other coconspirators entered into and engaged in a combination and conspiracy to suppress and eliminate competition by fixing the prices of thin-film transistor liquid crystal display panels ("TFT-LCD") in the United States and elsewhere. The combination and conspiracy engaged in by the defendants and other coconspirators was in unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act (15 U.S.C. § 1).

3. The charged combination and conspiracy consisted of a continuing agreement, understanding, and concert of action among the defendants and other coconspirators, the substantial terms of which were to agree to fix the prices of TFT-LCDs for use in notebook computers, desktop computer monitors, and televisions in the United States and elsewhere.

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II.

DEFENDANTS AND COCONSPIRATORS

4. During the period covered by this Indictment, defendant AU OPTRONICS CORPORATION was a Taiwan corporation with its principal place of business located in Hsinchu, Taiwan. Defendant AU OPTRONICS CORPORATION joined and participated in the conspiracy from at least as early as September 14, 2001 and continuing at least until December 1, 2006. During the period covered by this Indictment, defendant AU OPTRONICS CORPORATION was engaged in the business of producing and selling TFT-LCDs to customers in the United States and elsewhere.

5. Within the period covered by this Indictment, defendant AU OPTRONICS CORPORATION AMERICA was a wholly owned subsidiary of defendant AU OPTRONICS CORPORATION, and a United States corporation incorporated in the State of California with its principal place of business located in Houston, Texas. Defendant AU OPTRONICS CORPORATION AMERICA joined and participated in the conspiracy from at least as early as spring 2003 and continuing at least until December 1, 2006. Within the period covered by this Indictment, defendant AU OPTRONICS CORPORATION AMERICA was engaged in the business of selling TFT-LCDs to customers in the United States.

6. Defendant HSUAN BIN CHEN is a resident of Taiwan. Within the period covered by this Indictment, defendant HSUAN BIN CHEN was President of defendant AU OPTRONICS CORPORATION. Defendant HSUAN BIN CHEN joined and participated in the conspiracy from at least as early as October 19, 2001 and continuing at least until December 1, 2006.

7. Defendant HUI HSIUNG is a resident of Taiwan. Within the period covered by this Indictment, defendant HUI HSIUNG was Executive Vice President of defendant AU OPTRONICS CORPORATION. Defendant HUI HSIUNG joined and participated in the conspiracy from at least as early as October 19, 2001 and continuing at least until December 1, 2006.

8. Defendant LAI-JUH CHEN is a resident of Taiwan. Within the period covered by this Indictment, defendant LAI-JUH CHEN was Director of Desktop (Monitor) Display Business Group of defendant AU OPTRONICS CORPORATION. Defendant LAI-JUH CHEN joined and participated in the conspiracy from at least as early as February 13, 2003 and continuing at least until November 1, 2005.

9. Defendant SHIU LUNG LEUNG is a resident of Taiwan. Within the period covered by this Indictment, defendant SHIU LUNG LEUNG was Senior Manager of Desktop (Monitor) Display Business Group of defendant AU OPTRONICS CORPORATION. Defendant SHIU LUNG LEUNG joined and participated in the conspiracy from at least as early as May 15, 2002 and continuing at least until December 1, 2006.

10. Defendant BORLONG BAI is a resident of Taiwan. Within the period covered by this Indictment, defendant BORLONG BAI was Senior Manager of the Notebook Display Business Group and Director of the Notebook Display Business Group of defendant AU OPTRONICS CORPORATION. Defendant BORLONG BAI joined and participated in the conspiracy from at least as early as March 20, 2003 and continuing at least until December 1, 2006.

11. Defendant TSANNRONG LEE is a resident of Taiwan. Within the period covered by this Indictment, defendant TSANNRONG LEE was the Senior Manager of IT Display, Senior Manager of Desktop Display, Director of Desktop Display, and Director of Notebook Display Business Groups of defendant AU OPTRONICS CORPORATION. Defendant TSANNRONG LEE joined and participated in the conspiracy from at least as early as January 11, 2002 and continuing at least until December 1, 2006.

12. Defendant CHENG YUAN LIN is a resident of Taiwan. From at least as early as September 14, 2001 until on or about April 7, 2003, CHENG YUAN LIN was Chairman and Chief Executive Officer of Chunghwa Picture Tubes, Ltd. ("Chunghwa"). During the period covered by this Indictment, Chunghwa was a Taiwan company engaged in the business of producing and selling TFT-LCDs to customers in the United States and elsewhere. Chunghwa was a participant in the conspiracy. Defendant CHENG YUAN LIN joined and participated in the conspiracy from at least as early as September 14, 2001 and continuing until at least April 7, 2003.

13. Defendant WEN JUN CHENG is a resident of Taiwan. From at least as early as September 14, 2001 until on or about September 24, 2004, WEN JUN CHENG was employed by Chunghwa, and beginning in March 2002 was Assistant Vice President of Sales and Marketing for Chunghwa. Defendant WEN JUN CHENG left his employment at Chunghwa on September 24, 2004. Defendant WEN JUN CHENG joined and participated in the conspiracy from at least as early as October 5, 2001 and continuing at least until September 24, 2004.

14. Defendant DUK MO KOO is a resident and citizen of the Republic of Korea. During the period covered by this Indictment, DUK MO KOO was Executive Vice President and Chief Sales Officer for LG.Philips LCD Co., Ltd. ("LG Philips"). During the period covered by this Indictment, LG Philips was a Korean company engaged in the business of producing and selling TFT-LCDs to customers in the United States and elsewhere. LG Philips was a participant in the conspiracy. Defendant DUK MO KOO joined and participated in the conspiracy from at least as early as December 11, 2001 and continuing at least until December 1, 2005.

15. Various corporations and individuals not made defendants in this Indictment participated as coconspirators in the offense charged in this Indictment and performed acts and made statements in furtherance of it.

16. Whenever in this Indictment reference is made to any act, deed, or transaction of any corporation, the allegation means that the corporation engaged in the act, deed, or transaction by or through its officers, directors, employees, agents, or other representatives while they were actively engaged in the management, direction, control, or transaction of its business or affairs.

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III.

MEANS AND METHODS OF THE CONSPIRACY

17. For the purpose of forming and carrying out the charged combination and conspiracy, the defendants and other coconspirators did those things that they combined and conspired to do, including, among other things:

  1. On or about September 14, 2001, representatives from four Taiwan TFT-LCD manufacturers, including defendant AU OPTRONICS CORPORATION, secretly met in a hotel room in Taipei, Taiwan and entered into and engaged in a conspiracy to fix the price of TFT-LCD. At this meeting, the conspirators agreed to meet approximately once a month for the purpose of fixing the price of TFT-LCD panels. These meetings were commonly referred to by some of the conspirators as "Crystal Meetings." The four Taiwan TFT-LCD manufacturers also agreed to rotate responsibility for coordinating each of these monthly meetings. A representative from defendant AU OPTRONICS CORPORATION stated at the September 14, 2001 meeting that the participants at future Crystal Meetings should include the two major Korean TFT-LCD manufacturers to ensure the success of the conspiracy to fix the price of TFT-LCD.
  2. On or about September 21, 2001, representatives from two Korean TFT-LCD manufacturers joined representatives from the four Taiwan TFT-LCD manufacturers, including defendant AU OPTRONICS CORPORATION, at a Crystal Meeting in a hotel room in Taipei, Taiwan. At or before the September 21, 2001 Crystal Meeting, the two Korean TFT-LCD manufacturers agreed to join the conspiracy to fix the price of TFT-LCD.
  3. Employees from defendant AU OPTRONICS CORPORATION attended Crystal Meetings on a regular basis between on or about September 14, 2001 until on or about December 1, 2006 with employees of other participating TFT-LCD manufacturers.
  4. Defendants HSUAN BIN CHEN, HUI HSIUNG, SHIU LUNG LEUNG, BORLONG BAI, TSANNRONG LEE, CHENG YUAN LIN, WEN JUN CHENG, and DUK MO KOO attended and participated in one or more Crystal Meetings. Defendants HSUAN BIN CHEN, HUI HSIUNG, LAI-JUH CHEN, SHIU LUNG LEUNG, BORLONG BAI, TSANNRONG LEE, CHENG YUAN LIN, WEN JUN CHENG, and DUK MO KOO, at times, also authorized, ordered, or consented to the attendance and participation of their subordinate employees at Crystal Meetings.
  5. During the period covered by this Indictment, participants in the Crystal Meetings regularly exchanged production, shipping, supply, demand, and pricing information with each other at the meetings for the purpose of agreeing to fix the price of TFT-LCD, as well as implementing, monitoring, and enforcing adherence to the fixed prices. Up until 2003, the participants in the Crystal Meetings reached price agreements on certain sized TFT-LCD used in computer notebooks and monitors. Beginning in 2003, the price agreements reached at the Crystal Meetings also included certain sized TFT-LCD used in flat-screen televisions.
  6. The participants in the conspiracy issued price quotations in accordance with the price agreements and accepted payment for the supply of TFT-LCDs sold at collusive, noncompetitive prices to customers in the United States and elsewhere.
  7. From on or about September 14, 2001 until in or about May 2005, senior sales executives of the defendant AU OPTRONICS CORPORATION and the other participating TFT-LCD manufacturers attended the Crystal Meetings.
  8. In or about May 2005, the participants in the Crystal Meetings discussed that one or two major TFT-LCD customers may have detected the Crystal Meetings. To keep the meetings secret and avoid detection, the Crystal Meeting participants decided to stop having senior-level sales executives attend the Crystal Meetings. Instead, the senior-level executives instructed lower-level marketing employees to continue the Crystal Meetings. Lower-level marketing employees of defendant AU OPTRONICS CORPORATION and the other participating TFT-LCD manufacturers continued to meet monthly as a group to exchange shipment, production, and pricing information in furtherance of the conspiracy to fix the price of TFT-LCD. The lower-level marketing employees met at restaurants and cafes, instead of hotels, in Taipei.
  9. In or about the spring 2006, the participants in the Crystal Meetings became further concerned about being detected after receiving news reports of an ongoing price-fixing investigation by the United States Department of Justice into the dynamic random access memory ("DRAM") industry and after receiving other information about a possible investigation into the TFT-LCD industry. To further avoid detection and keep the meetings secret, the conspiracy members, including representatives of defendant AU OPTRONICS CORPORATION, agreed to no longer meet as a group, but instead have back-to-back, one-on-one meetings with each other on a certain date each month at restaurants and cafes in Taipei, Taiwan. Through these round-robin style meetings, the participants continued to exchange shipment, production, and pricing information in furtherance of the conspiracy to fix the price of TFT-LCD. These round-robin meetings continued until in or about December 2006.
  10. During the period covered by this Indictment, employees of defendant AU OPTRONICS CORPORATION, in addition to participating in Crystal Meetings, had one-on-one discussions in person or by phone with representatives of coconspirator TFT-LCD manufacturers during which they reached agreements on pricing of TFT-LCD sold to certain customers, including customers located in the United States. Through these one-on-one discussions, the participants also monitored each other's compliance with prices agreed upon at Crystal Meetings and during other discussions. Participants in these one-on-one discussions, at certain times during the conspiracy, included defendants HSUAN BIN CHEN, HUI HSIUNG, LAI-JUH CHEN, SHIU LUNG LEUNG, BORLONG BAI, TSANNRONG LEE, WEN JUN CHEN, and DUK MO KOO.
  11. During the period covered by this Indictment, senior-level employees of AU OPTRONICS CORPORATION regularly instructed employees of AU OPTRONICS CORPORATION AMERICA located in the United States to contact employees of other TFT-LCD manufacturers in the United States to discuss pricing to major United States TFT-LCD customers. In response to these instructions, employees of AU OPTRONICS CORPORATION AMERICA located in the United States had regular contact through in-person meetings and phone calls with employees of other TFT-LCD manufacturers in the United States to discuss and confirm pricing, and at times agree on pricing, to certain TFT-LCD customers located in the United States. These AU OPTRONICS CORPORATION AMERICA employees regularly reported the pricing information they received from their competitor contacts in the United States to senior-level executives at AU OPTRONICS CORPORATION in Taiwan. By at least early 2003, representatives of defendant AU OPTRONICS CORPORATION also began sending reports of the discussions and price agreements reached at Crystal Meetings to certain employees at AU OPTRONICS CORPORATION AMERICA. These reports were used by certain employees of AU OPTRONICS CORPORATION AMERICA in their price negotiations with certain TFT-LCD customers located the United States.
  12. During the period covered by this Indictment, representatives of defendants AU OPTRONICS CORPORATION, AU OPTRONICS CORPORATION AMERICA, and other coconspirators took steps to conceal the conspiracy and conspiratorial contacts through various means:

    1. The Crystal Meeting participants discussed the need to keep the Crystal Meetings secret and warned against revealing the existence of the meetings, even to other employees within their own companies who did not participate in the conspiracy.
    2. Participants in the Crystal Meetings were specifically warned to keep the meetings secret because of antitrust laws and the ongoing price-fixing investigation into the DRAM industry.
    3. In addition, in or about December 2006, representatives of AU OPTRONICS CORPORATION AMERICA took steps to destroy evidence showing contacts with TFT-LCD competitors when they became aware of the United States Department of Justice's investigation into price-fixing in the TFT-LCD industry.

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IV.

TRADE AND COMMERCE

18. TFT-LCDs are glass panels composed of an array of tiny pixels that are electronically manipulated in order to display images. TFT-LCDs are manufactured in a broad range of sizes and specifications for use in televisions, notebook computers, desktop computer monitors, cell phones, mobile devices, and other applications. For purposes of this Indictment, TFT-LCD refers to standard-sized panels for use in computer notebooks and monitors and televisions, including sizes 12.1", 13", 13.3", 14", 14.1", 15", 15.2", 15.4", 17", 18", 19", 20", 26", and 30".

19. During the period covered by this Indictment, the defendants and their coconspirators sold and distributed substantial quantities of TFT-LCDs in a continuous and uninterrupted flow of interstate and foreign trade and commerce to customers located in states or countries other than the states or countries in which the defendants and their coconspirators produced TFT-LCDs. In addition, payments for TFT-LCDs traveled in interstate and foreign trade and commerce.

20. The business activities of the defendants and their coconspirators that are the subject of this Indictment were within the flow of, and substantially affected, interstate and foreign trade and commerce.

V.

JURISDICTION AND VENUE

21. As to defendants AU OPTRONICS CORPORATION, AU OPTRONICS CORPORATION AMERICA, HSUAN BIN CHEN, HUI HSIUNG, LAI-JUH CHEN, SHIU LUNG LEUNG, BORLONG BAI, and TSANNRONG LEE, the combination and conspiracy charged in this Indictment was carried out, in part, in the Northern District of California, within the five years preceding the filing of this Indictment.

22. As to defendants CHENG YUAN LIN, WEN JUN CHENG, and DUK MO KOO, the combination and conspiracy charged in this Indictment was carried out, in part, in the Northern District of California, within the five years preceding the filing of the Indictment on February 4, 2009,excluding the period during which the running of the statute of limitations was suspended pursuant to agreement with defendant CHENG YUAN LIN.

ALL IN VIOLATION OF TITLE 15, UNITED STATES CODE, SECTION 1.

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VI.

SENTENCING ALLEGATION

23. With respect to the charge in this Indictment, for purposes of determining the alternative maximum fine pursuant to Title 18, United States Code, Section 3571(d), defendants AU OPTRONICS CORPORATION and AU OPTRONICS CORPORATION AMERICA and their coconspirators derived gross gains of at least $500,000,000, and persons other than the defendants and their coconspirators suffered gross losses of at least $500,000,000.



DATED: 06/09/2010 A TRUE BILL


_______________/s/________________
Christine A. Varney
Assistant Attorney General

_______________/s/________________
Scott D. Hammond
Deputy Assistant Attorney General

_______________/s/________________
Marc Siegel
Director of Criminal Enforcement
United States Department of Justice
Antitrust Division

_______________/s/________________
Joseph P. Russoniello
United States Attorney
Northern District of California
_______________/s/________________
FOREPERSON


_______________/s/________________
Phillip H. Warren
Chief, San Francisco Office

_______________/s/________________
Niall E. Lynch
Assistant Chief, San Francisco Office

_______________/s/________________
Michael L. Scott
Heather S. Tewksbury
Attorneys
U.S. Department of Justice
Antitrust Division
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
(415) 436-6660