Japanese electronics firm Toshiba Corp. said it had been subpoenaed by the U.S. Department of Justice about its flash memory business in the key U.S. market. Toshiba America Electronic Components, the company's U.S. semiconductor sales unit, was the target of the subpoena, according to Keisuke Ohmori, a Toshiba spokesman in Tokyo. This comes after Toshiba's U.S. partner, SanDisk Corp, said on Friday it and its chief executive had received grand jury subpoenas indicating a government probe into possible price-fixing in the NAND flash memory industry. According to SanDisk's regulatory filing, the subpoena it recieved was based on alleged price-fixing of flash memory, and that 23 other companies were sued for the same reason, including Toshiba.
News source: Reuters
News source: Reuters
Obviously, it causes harm in the short term, if they all agree to sell an item at $20 they could sell at $10
but by ensuring there's enough profit in the short-term to continually ramp up capacity and keep additional companies in the game, might price-fixing have a long-term benefit?
In a fiercely competitive market, the most efficient companies might run everyone else out of business, and then have much less reason to keep prices low down the road.
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