In Jaco Electronics Inc. v. AU Optronics Corp. et al., Northern District of California Judge Susan Illston denied a motion to dismiss, filed by NEC Corp., and other LCD panel makers, allowing Jaco Electronics Inc.’s, antitrust lawsuit to move forward. Jaco’s suit is part of multidistrict litigation over a massive LCD price-fixing conspiracy, alleging that NEC, along with the top five LCD suppliers – LG, AU Optronics, Sharp, Samsung Electronics Co. Ltd., and Chi Mei Corp. – violated the Sherman Act when they conspired to fix prices on LCD products.
According to the suit, the LCD makers met and agreed on prices for TFT-LCDs, and on the number of products each company would produce. The top five TFT-LCD suppliers collectively shipped 90 percent of all of TFT-LCD products. Such a tight market concentration, strategic alliances, and close relationships between company executives allegedly allowed the LCD makers ample opportunity to agree on prices. As a result, plaintiff claims, it purchased LCD panels directly from defendants at artificially inflated prices.
Basing its ruling on its February ruling in a similar case brought by Tweeter Home Entertainment Group Inc., the court held that Jaco’s antitrust claims were plausible. Judge Illston stated that Jaco’s allegations are not materially different from the allegations in the Tweeter case, therefore, Jaco’s case can move forward. In January, Judge Illston also partially denied NEC’s bid to force Jaco to arbitrate the dispute, finding Jaco’s Sherman Act claims did not fall under the scope of the companies’ distribution agreement, which contained an arbitration clause.
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