Memory chipmakers hit with antitrust action

Price fixing is very profitable, at least until you get busted. Between 1999 and 2002, a number of DRAM manufacturers conspired to fix prices for their chips. That led to higher prices for PC manufacturers such as Dell, Apple, HP, and just about every other company. Those increased prices were then passed on to consumers. When the computer makers brought an unanticipated price spike to the attention of the Department of Justice, an investigation was launched. It concluded with guilty pleas from Samsung, Hynix, Infineon, and Elpida, among others.

Although the companies paid fines in excess of US$100 million to the DoJ, it looks as though their legal troubles are not yet behind them. In a press release, the Attorney General of California announced plans to file a price-fixing lawsuit against Infineon, Hynix, Micron, Mosel Vitelic, Nanya, Elpida, and NEC.

The suit, which will be joined by the attorneys general of 33 other states, will cover much of the same ground that the DoJ investigation did, namely that the defendants violated US and state antitrust laws by fixing DRAM prices during the period in question.

Given the fact that four companies and another 12 individuals have all pleaded guilty to criminal charges, the civil case to be filed tomorrow may have a good chance of succeeding. The overcharges totaled in the hundreds of millions of dollars, and since US antitrust law allows for triple damages, the seven companies could be looking at judgments in the billions.

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