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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."
I don't like paying high prices any more than anyone else, however I have to wonder...
Let's say I have a monopoly on widgets, or myself and my compeptitors agree to keep the price of widgets artificially high.
At what point are we no longer allowed to sell our widgets at whatever price we see fit? When do we cross over into breaking the law for price fixing?
Karma: Chameleon (mostly due to the fact that you come and go).
...for ~$5.48, from some RAM manufacturer. In 2007.
Man, I just deposited my $13.86 RIAA check yesterday.
If the money keeps rolling in like this from Big Greedy/Evil Organizations, I may quit my day job.
If you thought you paid too much for RAM in 2002
I paid 70 for a stick of 512mb in 2002. That may be expensive compared to now, but with my first 486 I paid the same price for a 4mb stick. Unless you own a server farm, what's 10 per half a gig or ram?
When anger rises, think of the consequences.
Confucius (551 BC - 479 BC)
Saving my mod points....
While I'm willing to give any company the benefit of the doubt, it does seem rather suspicious that Micron chose to sell off their PC arm and focus instead on, the implied, more lucrative memory manufacturing business line. Circumstantial yes, but it never made sense why Micron would sell of a business line that was the only good alternative to Dell.
That being said, it's really hard for the DoJ to prove a conspiracy existed to fix prices of memory between manufactures. IANAL, however from my understanding basically a "smoking gun" would be the only way a conviction could be had - some emails between companies discussing price or marketing strategies perhaps. Other than that, it's almost impossible to get a price-fixing case with a favorable outcome for the prosecution.
I'd like to see the price of toner and ink cartridges go down. Those things seem so simple, I wonder why they are so expensive. A memory chip seems slightly more expensive to produce than an ink cartridge. Yet the prices are very similar.
http://github.com/gbook/nidb
SCO is doing just about the same thing as Rambus, but with much less success. Participate in Linux/UNIX standards groups, but later claim to own those standards and begin suing everyone.
Who do you get to be an expert to tell you something's not obvious? The least insightful person you can find? -J Roberts
I realized this was happening years ago. My solution? Run with just 16 MB of RAM and a 4 GB swap partition. Sure, my machine gets a bit pokey but it keeps the cartel from stealing my money.
Ahh, my 'ls' from December just finished!
Trolling is a art,
If you price your product BELOW COST, you can be accused of predatory pricing. Without this rule, no small manufacturer could ever reasonable compete against an established one. The one with the large market share would simply undercut the competition by selling at a loss and ride on its existing resources until the competition went under. If you set a price higer than a competitor, it is used as evidence of an "abusive monopoly position" Only if coupled with other factors, such as anti-competitive \ exclusive contracts with related parties. Case in point, Microsoft's contracts with computer OEMs preventing them from bundling other OSes on the same computer as Windows. BeOS - overall, a superior product - went under because of precisely this. They had no chance to compete and prove themselves on an open market because of Microsoft's restrictive contracts. (which, in turn, no OEM would break because of Microsoft's ownership of the home market)
If you set the same price as a competitor, it is evidence of "price fixing"
CAN be, but only very rarely. As was pointed out in another post above, price-fixing \ cartel cases are spectacularly difficult to prove and usually require a "smoking gun" as evidence. The government even launching such a case is itself evidence that they have a load of proof on their side. Otherwise, it's assumed to be the result of normal market pressures. (why, for example, all the major computer brands cost about the same - prices have trended downwards since the 80s until it's hit a point that it's extremely difficult to get any cheaper and still profit. That's not price-fixing, it's the Free Market actually working as it's supposed to.)
Bush: He's Liberal in all the wrong ways.
Commodity DRAM memory has been around $0.10 / megabyte since 2002. I remember slashdot stories about $100 gigabytes at that time. Until Wintel breaks the 2GB/32-bit limit the core memory cost is not a major factor in personal computing. in contrast, flash memory has fallen from $1.00 to $0.25 that time period.
The price plateaus when a chip generation matures. The next 4x generation seems a bit delayed.
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.