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DRAM Price Fixing Investigations
An anonymous reader writes "A few days ago after FTC antitrust charges against Rambus were thrown out, the U.S. Department of Justice and EU have both begun probes against the 4 largest memory makers in accusation of price fixing during 2001/2002. News.com.com has information regarding the pending EU investigation. Anandtech and Silcon.com both have primers on the U.S. investigation. If you thought you paid too much for RAM in 2002, chances are you may have been more right than you originally thought."
Man, memory seems so cheap these days. If it was being fixed before, I can't imagine what it'd be like without price fixing.
May we never see th
I've read cases where the same laws have been used to prosecute companies no matter what they do:
A law that you can't know you're breaking in advance is no law: it's a license for prosecutors to go after anybody.
When rambus hit the streets it was way too expensive, incompatible and a one man show. The price was only one factor, and allthough a major one, I think many regarded rambus like people regard intel itanium. An incompatible architecture that is way too expensive comparing to the competitors.
Also while processors have always been controlled by a mighty few, this has not been the case with memory. One company trying to push *all* the others away in one strike is bound to have problems.
Linux might push Windows away one day, but only because it has aproven architecture and an unbeatable price, otherwise it wouldn't stand a chance.
that America does some have some resemblance to dignity
but with Ken Lay and his friends and family still enjoying the billions of dollars he stole from you, i dont really hold too much faith, when the goverment is as corrupt as it is, along with buisness in USA i think nothing will change,
same reasons as Enron is still in buisness so is Worldcom
this is nothing more than adding "feel good" as in "we look as if we are trying to clean up buisness but in reality we dont do anything to those we catch anyway, so carry on ripping off our citizens they dont care"
Lets say there is a wendys and a burger king in the mall, bout 4 stores down from each other
They are allowed to set the prices as they wish, and hence get into price wars from time to time
This is all fine and dandy, until the two managers get together and say, 'You know what, if we agree to keep our prices at $2.00 per burger, we both will make more money.' At that point it's illegal.
Gillette is not going with razorx and making deals nor printer manufactures.
understand?
Expect in those cases you have specifically designed a product that nobody else can make because if they do make it you'll sue them for copyright violation and/or DCMA violations. You don't have any motivation to lower your prices if nobody else has any motivation to make cartridges for your particular line of razors or printers -- mainly because they all have their own lines. If a third-party tries to make them you'll just sue them out of existence.
This might not be illegal per say but it's just as bad imho. My ass it costs $35 to make a 15ml blank ink cartridge or $10 to make eight replacement cartridges for my Mach Three Turbo.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Then that's a monopoly on that market... Which isn't in and of itself illegal. Prices couldn't be fixed in this case, because by definition, more than one party is required to fix the prices!
The alternative point of view would be to say, at the time they (allegedly) did this, they obviously felt that this illegal act would bring them higher profits. That the market would shift to deny them their profits could not be forseen. So at the time, it was an illegal act with the intention of garnering ill-gotten gains. (allegedly)
While I can see your position, from a larger societal standpoint, I can't support only prosecuting cases of illegal acts in the event that they succeed. Taking that standpoint would, in some ways, encourage illegal (AKA antisocial) actions, since the odds of being caught and punished suddenly go down.
Bush: He's Liberal in all the wrong ways.
I'm no longer in the standalone DRAM business, but I did spend about 20 years, there.
Much of the time, there's no money to be made. Much of the time, just about everyone runs at a loss. The industry is also cyclical, and sometimes there's good money to be made. It doesn't help that it takes serious time to build a chip, so build-to-order doesn't really work very well. There's also time involved in packaging chips into a usable form, especially because it may involve transportation to a remote site. This aspect may be key, later.
IF there is price-fixing involved, and I suspect that there really isn't, it's the general idea of flattening out the bottom of the price curve a little in the cycle. I suspect it's far more likely that memory makers have decided, "It's just not worth bringing memory to market for less than $xx.xx." Remember the thing about packaging? At some price point, it may be better to not even bother packaging chips. It may even be better to grind them back into sand. Each manufacturer has different costs, but they're all doing the same thing. I suspect that they all have different, but similar package/hold/destroy price points for their chips.
This might appear to be price-fixing, but isn't. It's simple economics.
Years back, I bought my Mom a pair of earrings made from defective 4Mbit chips I had worked on for 6 or 7 dollars. At the time, perfect chips were selling on the open market for $4.50.
the price fixing went on for a long time afterwards, long after the factories were rebuilt and at capacity. the ram was artificially stockpiled and the world was kept in a ram shortage = high prices.
be thankful they dont limit the supply again, debeers style.
This is also why airline prices move in some strange waves.
When there's going to be a price increase, one airline has to announce its increase to the world, they can't tell the competition first. Now, for a few hour, that airline is $20 higher than everybody flying the same route... who's going to buy tickets that route from that airline? Nobody. The ball is now in the court of all of the other airlines that fly that route... if they agree it's time for a price increase, they'll move their prices up to match. However, if a major player disagrees, they'll keep their prices where they are, and eventually everybody who raised their prices will realize this isn't going to stick, and the company that originally stated the fare hike will retract it.
Fare cuts move the same way. Once somebody announces a cut, everybody else has to either match it or wait for the airline who made the cut to get locked out of the market by filling up their planes.
That's how fair play happens without collusion. Those in charge of the prices have to guess what they other guys are going to do in the future, but once it's public information, everybody can use that info.
Well, since you say if you price your product below cost you can be accused of predatory pricing, the memory makers price fixing would be predatory price fixing since they were all still losing $$$ hand over fist even with this supposed price fixing. It might be against the law, but seems to me companies should be allowed to say, "hey, why don't we stop giving our product away with a dollar bill wrapped around each one..."
So to apply this to the printer cartridge example, the company designs and manufactures printer cartridges in order to recover the cost of designing and manufacturing a printer cartridge? Thats circular logic, if they created a standard printer cartridge that worked across all brands of similar printers they wouldn't need to design new cartridges and there would be a competive market manufacturing them, something which the companies will strive to avoid where possible, hence the current system. From a business perspective the motive is almost certainly a continuous revenue stream with considerable profit. It's sort of like renting your printer: you can't use the printer unless you buy a license (cartridge) from the company making them. I believe if you look back a couple years when ink refills first started coming out you'll find printer manufacturors sued to keep them off the market and lost. They wanted the 'licenses' to expire after a certain amount of use, and when someone undercut them by offering to renew your old license at a lower cost, they got bent out of shape.
A creator is granted copyright on something the moment that it is created regardless of whether the creator is a company or an individual or whether it took lots of money/effort or almost none to create.
Copyright is granted to give the creator a chance to make money from a creation, but the lack of such "return on investment" does not necessarily stifle creation..."Art for art's sake" and all that...
A bit more to the topic at hand, it does sometimes seem quite wrong that a copyright/patent holder can simultaneously price gouge the customer and prevent others from sometimes even mimicking the product and sell it at a lower price...I can understand patents on products that are quite expensive to develop, but as the grand-parent post said, razor refills and ink cartridges?...c'mon.
Actually...I guess I am somewhat split on the topic. On the one hand, as a creator (photographs and sometimes music) I can understand the desire to control how a creation is used, but on the other hand, as a consumer I would really like a cheaper product. There must be some kind of balance in there, right? Or must everyone be a profiteering glutton?
"Empathise with stupidity, and you're halfway to thinking like an idiot." - Iain M. Banks
We all understand why patents are necessary... so you're 100% correect but there's a big problem with the law
If you don't believe me, then look at the profits HP makes on selling printer refills compared to _all_ of it's other business wings combined. (over half the total revenue). The fact that all printer manufactors engage in the same policy can be regarded as a new way around the price fixing problem.
Lets face it, the industry is deliberately vendor locking their customers and then charging ridiculous prices. Mum and Dad get sold on a wonderful printer that costs only $150, but then sigh in resignation when the salesman tells them that _all_ the ink cartridges are very expensive.
So they get around price fixing charges by all producing different (but functionally identical) components and over charging for them. Seems like the price fixing laws need to be fixed.
Like all pain, suffering is a signal that something isn't right
That's because there's no money in retailing the gas itself anymore.
Yet we see more and more stations with debit/credit card payments right at the pump.
Ahh.. paradox..
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