Over in Europe, a handful of chipmakers were fined by the European Union for illegally fixing prices. The names of the alleged companies include Elpida, Hitachi, Hynix, Infineon, Mitsubishi, Nanya, NEX, Samsung, and Toshiba. Micron was also accused of price fixing, however the company escaped the heavy fines in return for ratting out the other nine.
The EU said that the price-fixing operation covered 1998 to 2002, and featured a network of contacts that shared secret company information. Apparently they all agreed to set a fixed price for DRAM chips sold to major PC makers and server manufacturers, and got away with it over the four years. EU law specifically prohibits practices that restrict competition. Because the ten companies sell products within the European Economic Area, the law applies to their secret operation.
While additional details weren't given, Micron approached the EU sometime in 2002 and provided enough information to kick-start an investigation by the Commission. Eventually everyone pleaded guilty.
"By acknowledging their participation in a cartel the companies have allowed the Commission to bring this long-running investigation to a close and to free up resources to investigate other suspected cartels," said the EU's Competition Commissioner, Joaquin Almunia. All nine entities received a 10-percent cut in overall penalties in return for their admittance and co-operation with the probe.
On a whole, the EU fined the group $404.2M USD. Samsung received the biggest hit, forced to cough up $179.1M USD whereas Infineon received a $70M USD fine.
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Hate to say this.. but I'm disappointed at Toshiba and Samsung :(Reply
wouldn't survive a day on the streets.
(if you can't tell, i'm kidding.)
Now if we could just get some of those illegal profits back...Reply
Ha, who am I kidding? Companies do this for a reason.
The Japanese did the same thing in the(starting in the 60's) 70's to kill off the US TV and stereo manufactures, then bought up the names of RCA, Admiral, Sylvania, Philco, Quasar, Fisher, HH Scott, Marantz and etc.Reply
If you look into so called "free trade" with the Japanese, it really isn't
free trade at all. It can be very hard to get a product into a Japan that might be a competitor to the products they make or other reasons.
What about the price fixing on the DDR2 right now its doubled in price over the last six months.Reply
lunosnyperWhat about the price fixing on the DDR2 right now its doubled in price over the last six months.German RAM manufacturer went under, and DDR2/DDR3 went 3-4x the cost (I was seeing $35 for 2x2GB sets for both DDR2 and DDR3 in Canada).Reply
It wasn't that big of a loss to the industry, but the industry decided it was a great excuse to rape us on prices.
And it worked.
They're price fixing now. Someone please stop them already. :(
On the plus side, I could sell my 3x2GB DDR3 1600 set for over twice what I paid for it. :)
I too do believe they are price fixing right now. I saw the prices of RAM and I absolutely refuse to spend my money on memory right now! DDR2 has more than doubled as lunosnyper pointed out.Reply
This is no suprise. Price fixing in the tech realm has been going on for years and continues to this day. You've never found it strange that LCD technology has stayed at a constant price for the past 10 years? How about GPUs? CPUS? Even after these lawsuits we'll continue to face price fixing. Do you honestly believe we'll see OLED technology, which costs pennys on the dollar compared to LCD drop in prices? Hell no, we'll pay more for it. CPU chips continue to become less and less expensive to manufacture, yet the prices increase. It's one giant shell game where the manufactures have no problem using collusion in order to maximize profit.Reply
lunosnyperWhat about the price fixing on the DDR2 right now its doubled in price over the last six months.Reply
They have had to increase prices to pay off fines...
The RAM manufacturers have been caught price fixing before, and they are doing it again right now which is why RAM sticks are 2-3x as much as they were last year. Hopefully this will help the prices go down in NA (this only says EU economic area), and this will mean slightly lower prices on the video cards as well. It sure as hell would help any investigation going on in the NA area.Reply