A class action lawsuit alleging an antitrust conspiracy between Samsung, Micron, and SK hynix will not progress through the courts. On Monday, the US Court of Appeals of the Ninth Circuit ruled that the complaint (PDF) against the DRAM chipmaking trio didn't offer up enough plausible factual evidence to make a case under Section 1 of the Sherman Act.
The accusations against Samsung, Micron, and SK hynix were quite simple. It was alleged by the plaintiffs, Hagens Berman, that the trio worked in parallel to help fix pricing to their advantage. For example, the DRAM makers were shown to have behaved very similarly in contemporaneously reducing their DRAM production since 2016. However, such accusations need to be bolstered by "some further factual enhancement," in order to progress with an antitrust conspiracy case.
Interestingly, the plaintiffs put forward eight "plus factors" as evidence that the parallel business conduct of the three defendants was orchestrated by prior agreement. The court considered all eight plus factors on individual merit, and together as a whole. Ultimately it was judged that the allegations didn't amount to the "something more" required to make the plaintiffs' claims plausible.
The ruling stated that the Defendants' actions are "more likely explained by lawful, unchoreographed free-market behavior" in a concentrated industry, rather than by unlawful agreement, wrote the judge in the court case analysis. In other words, the trio behaved similarly because they did business rationally, rather than due to collusion.
The newly published court opinion means that Samsung, Micron and SK Hynix are off the hook in this antitrust conspiracy case, and for it to be considered again would need some extra weighty, previously unseen evidence.
In our previous reporting on this DRAM price fixing antitrust case, we mentioned that Hagens Berman had some history with legal actions against DRAM makers. The plaintiff filed similar lawsuits in 2002 and 2018, before the current one that was filed in 2021. Perhaps the rewards from the first suit inspired further actions. It was settled for a hefty $345 million in 2006.
The 2018 suit was dismissed, much like the one on Monday, upholding the prior ruling. Between the dismissal of the 2018 suit and this one, the plaintiffs' investments in market investigations appear to have been a fruitless endeavor. PC enthusiasts in 2022 probably have very little anguish about the DRAM market in general, but DDR5 supplies and pricing definitely need to be seen to improve.