E.U. expected to fine nine chip makers for price fixing

The New York Times is reporting nine memory chip makers are expected to be fined by European Union regulators this week for illegal price fixing. The companies which have been charged are Samsung Electronics, NEC Electronics, Hitachi, Toshiba, Mitsubishi Electric, Infineon, Hynix Semiconductor, Elpida Memory and Nanya Technology. Micron Technology received immunity in the case for revealing the cartel and would not be fined for its involvement.

In July 2008 the European Commission introduced a new settlement procedure which allows companies to receive a 10% reduction in fines if they admit to taking part in a cartel. The Times quotes "three people with direct knowledge of the matter" say the fines given to the companies would be the first since the introduction of the settlement procedure. 

The decision for the fines is expected to be handed down Wednesday and one of the sources says the total of the fines may go high as €300 million ($381 million).

One of the unnamed sources says the E.U. competition commissioner Joaquín Almunia is expected to hold a press conference on Wednesday regarding the issue. So far the commission has declined to comment but has said previously the new settlement procedure is a more effective method to deter violations. 

Companies found guilty can have up to 10% of their total global turnover fined by the E.U. executive for breaking E.U. laws. 

In December 2009 Infineon revealed the commission had begun formal proceedings believing it was using anti-competitive behaviour for selling DRAM chips in the European market. These chips can be found in popular items such as PCs, printers, mobile phones and gaming consoles. 

Last year South Korea and U.S. antitrust regulators believed there was not pricing cartel after their investigation of the flash memory industry. 

Samsung Electronics and Hynix make up the world's two largest memory chip makers and in 2007 South Korean regulators dropped their price-fixing investigation against the companies. This investigation also included Micron and Infineon.

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Companies found guilty can have up to 10% of their total global turnover fined by the E.U. executive for breaking E.U. laws.

Oh, so now the EU speaks for and polices the entire globe? The arrogance is just ridiculous...

M_Lyons10 said,

Oh, so now the EU speaks for and polices the entire globe? The arrogance is just ridiculous...


it means that the fine can be as high as 10%. EU market is quite big and companies need to follow the regulations

M_Lyons10 said,
Oh, so now the EU speaks for and polices the entire globe? The arrogance is just ridiculous...
Er, no? But if you want to do business in the EU...

So-Unreal said,
This is big news. I got 4GB of ddr2 for 45 and a month later that same ram was 110.

Your situation may be more affected by supply and demand rather than price fixing. When new technology (in this case DDR3 RAM) is introduced, the manufacturing of the older item is reduced or stopped, creating a supply shortage. When the supply shrinks, the demand can warrant higher prices. Basic economics in this case.

RuuddieBoy said,
So, now we need to pay even more for memory because those companies want to even out the fines?

What would you have EU do then?

RuuddieBoy said,
So, now we need to pay even more for memory because those companies want to even out the fines?

Not rearlly this whole thing means that the chip manufacturers agree not to go below a certain price. Because of this their is no price war so costs stay artificially high. This forces someone to reduce costs and the others will follow as they need to, to compete. This drives priced down naturally as it should be.

I think there must be some mistake. I think it's been established that the EU only go after Microsoft/American companies

red. said,
I think there must be some mistake. I think it's been established that the EU only go after Microsoft/American companies

Always got to start somewhere.

red. said,
I think there must be some mistake. I think it's been established that the EU only go after Microsoft/American companies
I was thinking the same thing here. Finally they are doing something that makes sense instead of bitching about browsers that free to begin with.

red. said,
I think there must be some mistake. I think it's been established that the EU only go after Microsoft/American companies

No, the EU will go after any non EU company with money...

Interesting. Not bad at all just a bit late I guess. More interesting is if we could know whose hands will the fine land in - as consumers always get nothing.

Nicholas P. said,
Interesting. Not bad at all just a bit late I guess. More interesting is if we could know whose hands will the fine land in - as consumers always get nothing.

Yeah. It's a shame that the EU has turned this into such a profit center for the government... That is what I find most appalling here...