Infineon To Pay $160 Million For Fixing RAM Prices

Jerrod K writes "Infineon Technologies pleaded guilty to charges of price fixing in an international conspiracy. The Justice Department said this is the third largest antitrust settlement ever. Other memory chip makers involved include Hynix, Samsung, and Micron Technology." Reader phalse phace adds a link to CNET's coverage.

Comments

Now thats fair.

[DAldredge]

A local family man is facing 20+ years in prision for walking into the vault at the back where he worked and taking 100,000 USD.

Why do large corps get away with crap like this, hell the goverment doesn't even go after those whitecollar criminals that skip bail...

But, normal crimes they come down hard on.

Re:Now thats fair.

[AuMatar]

Hear hear!

The CEO of Infineon obviously knew they were price fixing. There's no reason that he should be allowed to get away with it. There ought to be a chunk of that fine coming from HIS pocket, and a nice long stay in club fed afterwards. As it is now, there's no incentives for the CEOs not to break the law- if they don't get caught, they make tons of money, if they do, the corporation pays the fine and they've STILL made money.

Free market isn't perfect

[revscat]

Cases like this remind me why I don't think the libertarian philosophy towards free markets is all that realistic. Many libertarians believe that things such as this should be left to the marketplace to settle, and that government "interference" like this ultimately harms the market. I emphatically disagree. There are inherent flaws with the free market that the justice system can and should remedy so that the overall market is healthier thereby. Collusion does no one -- consumers, industries, or the economy as a whole -- any favors, and I fail to see how letting the market handle it would do anything but unfairly fatten the pockets of those who benefit.

Re:Free market isn't perfect

[Jahf]

You're right in the "many libertarians" statement, but that doesn't mean it is a clear majority. Unfortunately for Libs (like me) there are really 2 Lib groups within the party. Right/Conservative and Left/Liberal.

The Liberal side would be more in favor of government taking care of business like this but trying for the most part to stay out of other places like social laws (most especially privacy). The Conservative side is more set on seeing government stay out of business entirely as well as the social aspects.

I'm primarily a Libertarian Left because I'm more moderate on business than a Democrat, but far more liberal on social issues than a Republican, and I think both parties have sold out when it comes to privacy. However in this case I think the matter was solved properly.

Re:Does this mean memory prices will fall?

[mr_spatula]

Sure. Just like CD prices fell after the CD price fixing settlemet... oh, wait...

Then I guess this will be like my rates with progressive going lower after they had the class action law suit over adjusting rates based on credit... oh, wait... that didn't happen either.

The only peopel to benefit from this will be the lawyers and the major companies - the rest of us will be lucky to get a coupon for a dollar off.

And there's still Rambus to deal with

[optimus2861]

The latest info I can find dates from around May, but Infineon is one of the DRAM makers facing a patent-infringement lawsuit from Rambus, and if that doesn't go well for them (Rambus had an initial setback but has been getting favourable rulings since; anyone who wants to cry "submarine patent!" better read up on the history, it's nowhere near that cut-and-dry) they could very well go under. I think they will lose it, and get hit with willful infringment for triple damages, which will easily run the damages into the billions. I doubt Infineon could absorb that.

Re:And just how do I benefit?

[gl4ss]

there's added incintive for the companies to NOT DO THIS SORT OF THING now, the society as a whole benefits and that is how you get the benefit.

that's the whole point of those fines, you make the RISK of running such price fixing schemes too high that they don't want to take it.

like the fairly recent cartel busts in metal and paper industries(northern+mid europe)... you don't directly get anything but by punishing with hefty fines (also in the 100m+ range)they send a message that "don't fucking do this".

Re:The $160 million dollar tax question...

[cmstremi]

But those that were harmed already have the memory they needed. All the discount RAM in the world isn't going to be a remedy to everyone - only those who need more memory.

Re:Sweet.

[Jason1729]

I don't know, but comparing the die size of the CPU to the area taken up by the chips on the memory module, it 'looks' like the memory is at least as dense as the CPU.

I'm pretty sure (but not certain) that a memory fab plant costs more to produce than a CPU plant, but the memory plant will produce far more chips over its lifetime.

Jason
ProfQuotes

Why do we fine coporations and jail humans?

[nlinecomputers]

If I personally break the law I will probably be incarcerated for my crimes. Yet a corporation who's only job is to make more money then it spends simply pays a fine. If I am in jail I can't earn any money or perform any deeds outside of a very limited set of rules. Corporations shouldn't be fined. They should be forced to shutdown or even be disbanded.

Fine line between "dumping" and fixing

[EmbeddedJanitor]

So if you get together with the other RAM vendors to stabilise the market to keep it sustainable (like OPEC and many others do) then that's illegal price fixing.

If you sell at too low a prices then you're "dumping" and that's illegal too.

One law is there to protect the consumer and the other is there to protect other suppliers.

Unless companies can sustainably make profit from their silicon sales we're doomed to boom and bust cycles where we oscillate between RAM surpluses and RAM shortages. In the long run, we all lose if these companies cant stabilise and make reasonable profits.

Re:Fine line between "dumping" and fixing

[SpecBear]

I don't see how it's a fine line between dumping and fixing. They seem to be polar opposites. As I understand it:

Fixing: I get together with my competitors and we all agree to sell products at a certain price. Since we're no longer competing against each other, we can negate the downward pressure on prices (and thus profits) that usually results from a competitive market.

Dumping: If I happen to have a bunch of money, instead of cooperating with my competitors, I try to kill them off. I price my products below the cost to make them, ensuring that nobody can run a sustainable business in the market. Since I have a bunch of money, I can last longer than my competitors. Once they die off or move on, I have a monopoly and can jack up prices far above what a competitive market would support.

We all lose if these companies can't stabilize, but we all win if the companies that can't manage their freaking inventory die off and make room for companies that actually read their history and learn from it. Collusion won't end the boom/bust cycle. It'll just ensure that the consumer gets screwed on prices regardless of whether there's a shortage or a surplus.

Re:Big cartel, this one? Pffft.

[Lord_Dweomer]

Businesses don't have militaries?

Lets not forget about BlackwaterUSA which IS a business military, currently hired by our government.