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Infineon Execs Plead Guilty to Price-Fixing
An anonymous reader writes "Executives at Infineon Technologies plead guilty to an international conspiracy to fix prices in the DRAM market. Heinrich Florian, Günter Hefner, Peter Schaefer and T. Rudd Corwin, executives for Infineon Technologies, had a felony filed against them yesterday in the U.S. District Court in San Francisco. Each executive could spend up to six months in prison and will have to pay a $250,000 fine. Under the plea agreement, they must also assist the government in its DRAM investigation. Infineon agreed in October to pay a $160 million fine for its role in the conspiracy, according to the Justice Department."
If there has been a widespread "price-fixing", will there be any refund for those who has bought these overpriced memory devices?
Infineon blames low chip fixed price for bankruptcy.
Is this surprising?
The rest of the world is getting obese just like Americans... everyone is greedy to a point. Some are just able to carry their greed to the point of complete selfishness and totally ignore the high percentage of people who have a hard time just keeping a roof over their heads.
What the heck will it take? Evolution of the human species? I always think back to those old Star Trek episodes where they land on some planet where the inhabitants laugh kindly at Earth's culture because they have learned to live without greed, take care of everyone, and actually enjoy sex rather than codify it.
I don't know why I want to write this... mod at your leisure.
applied a similar punishment to Microsoft for having violated the Sherman Act??? That's just as serious and the consequences for the customers were just as severe. Artificially raised prices as a result of the monopoly and a lack of choice.
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
Just interesting to where and how the money gets distributed.
Its not about the consumer, its about the feds getting some extra bucks.
---- Booth was a patriot ----
We need stiffer penalties against crimes like this. 6 months and $250,000? These execs stand to make tons more conducting illegal business than what they'll have to give up if they get caught. There has to be many more companies using illegal business practices in the US to get ahead, they just haven't been caught yet. This sentencing doesn't seem like it will be a real deterrent for that kind of behavior either.
Why exactly is this in your rights online? Maybe we need a legal section, or perhaps evil companies section
I can't help but remember the time when there was a glut of RAM, too many factories were built and RAM was cheap. Yes, that was good, in the short term, but the problem was that the low price lead to manufacturers going out of business and prices shot up.
The RAM industry is harsh. It's a commodity, and there's probably little profit in it. Little enough to make starting up a RAM factory, or updating the tech, a big financial risk. Above all we need stability in it.
Yes, market economies are good, but not perfect. Maybe this is an example where some amount of regulation is required to assure a steady supply of quality RAM? In a sense, price fixing can be compared to regulation. It's usually illegal and often undesirable, but maybe sometimes it serves a purpose?
Yes, I'd like to get cheap RAM, but not at the expense of quality, innovation or stability. It may be bad for us in the long run that Infineon is going out of business. As I understand it, the market is dominated by four major players. Will there be three now? Will it eventually become even more of a monopoly? I hope not. It would be to our detriment.
Off topic - I wonder when DDR2 is going to ramp up to the point where it's actually better than DDR. From what I've seen, the extra latency kills any performance gains it might have with current chipsets and clock speeds.
Anyone think the Infineon execs will take this as badly as the CEO of CyberNET (see this article)??
It somewhat still amazes me that these people think because they are supposedly good at business that they are going to be good at breaking the law. At what point does making an amazingly fat paycheck stop a person from wanting more? As incidences like these continue to happen, I get closer and closer to believing it never ends... and that's not even mentioning the big ones like Enron and MCI.
Here's a vote to salary caps in the corporate world!!!
so they will be out in 3months for good behaviour (paroll), if thats all it takes for a multi million dollar executive paycheck where do i sign up ?
prison is supposed to be a detterant but when you can break the law, collect millions of dollars in bonuses and only spend 3months inside for your crime while your family lives in absolute luxury i would say the system has failed (ken lay would probably disagree)
perhaps if a hitman decided to take out all these corporate criminals with a sniper rifle and confiscating all their assets so their family can suffer too they might think twice before ripping investors/people off
sometimes vigilatism is what it takes when the law is percieved to be wrong (see lycos for details)
... don't get caught! Price fixing done right is a gravy train like none other.
Sorry, you are suggesting that we regluate the RAM market?!
The fact of the matter over the last 5 years, RAM prices have dropped and sizes have went through the roof. There is no reason _not_ to expect this to continue.
CPUs are made by 2 main companies, yet innovation and price drops are very frequent. RAM has 3, so it's even more competitive if you use that logic.
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Don't get my hopes up like that. I briefly misread the title as beginning "Infinium Execs Plead Guilty" and my heart soared. Then my eyes focused and I was all disappointed.
Oh well, I guess it's just a matter of time.
These people are german citizens (as Infineon is german company). Why did they even bother to go in the USA for trial?
Anyway, what rights does US have to proscute international price fixing?
This translates into:
Infineon stole so much that they could easily pay a $160 million cut to the government, who wanted their share, even though they did nothing to deserve it. In return they let the company continue to do business as usual, and suggest that they price fix in less obvious ways next time. They also asked the company to offer up a few scape goats, who would get a token amount of time in a federal luxury prison like Camp Cupcake or Club Fed, but would be out in even less time than Martha Stewart. The people who bought the artifically high priced memory get screwed.
I'm an American. I love this country and the freedoms that we used to have.
Hmm, I haven't noticed RAM prices drop significantly over the last few years.
Speeds have gone up, yes, but for a good quality piece of RAM using "current" technology, you're still paying a lot per MB. I've tried buying cheap RAM - these days it just isn't worth it. Too many things to go wrong. I've had several cheap DDR DIMMs die on me. That never happened to me with SDR. So I don't agree that prices have gone down significantly.
Microsoft, Gates, Ballmer. How sick are you now?
Analogies don't equal equalities, they are merely somewhat analogous.
Some are just able to carry their greed to the point of complete selfishness and totally ignore the high percentage of people who have a hard time just keeping a roof over their heads.
You mean like these people
What amazes|saddens|stuns|infuriates me is that price-fixing which targets the arguably already-wealthy who can afford high technology purchases is processed relatively quickly while the at best lethal neglect of the managers and owners of Union Carbide will never see a court docket.
Dumb, stupid me. DRAM prices affect larger markets. The deaths of thousands of impoverished coolies affect no one.
blog
No, I was not suggesting anything. Merely pointing out that cut-throat behaviour in a business which makes products whose steady supply we rely on for building our computers may not always be to our advantage.
kthx. I know your IT job is in danger of being outsourced, but really you should have chosen a real career instead.
See, what confuses me is that other felons aren't allowed to profit from their felonies. That's why drug dealer's houses and cars and boats are taken away. But, these execs still get to keep what they earned during the time they were committing their felonies (minus the 3 months pay they're being fined). I guess it's just more proof that crime does pay.
Rob a bank and you get 25 years. Steal millions and get 6 months. :/
to prevent superior competing technology from gaining traction
Thats why planned/regulated economies are better then free market capitalism in regards to certain industries that will always exist.
Planned economies if the world were under one government would also prevent exploitation and businesses moving out of reach of the law of the land.
Cheap ECC DRAM may generate ECC errors now and then, but since they are correctable, you will experience much better reliability over cheap non-ECC DRAM.
ECC only costs a tiny bit more and you get a much less error-prone system. Some systems can even alert you to when ECC errors happen, so if you have a notoriously bad stick, you'll know about it harmlessly, instead of through random unexplainable system crashes.
I can't believe systems are still made without ECC today, when the incremental cost is so low.
-Z
nt
Little problem with the decimal point there, I meant $160 million not $1.6 million. This doesn't change anything I've said though, and that's still less than half of €345 million...
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
Rambus said that Rambus memory should have been priced only slightly higher than SDR SDRAM, based on manufacturing and licensing costs, and that they were always clear with JEDEC on what patents they held and what licensing terms they wanted. Rambus said two things in particular: first, that the high cost of Rambus memory was due to a conspiracy between the DRAM manufacturers, and second, that the claim of submarine patents was a smear campaign by the DRAM manufacturers.
It seems from this guilty plea that there is enough evidence to prove at least the first of those claims in court. I personally don't have any special insight into who is right, but I do wonder if we were all wrong about Rambus.
Whoever corrects a mocker invites insult;
whoever rebukes a wicked man incurs abuse.
--Proverbs 9:7
This is outrageous! Yet another government interference in the free market. When will these all-knowing politicians keep their noses out of commerce, so economics can generate efficiencies, and customers can get on with our vendors in peace? These damn commies in Washington are going to force any capitalists out of the RAM business. Why don't they just go back to lawyering, and leave business and technology to the experts?
--
make install -not war
What a fucking joke. Martha Stewart gets busted for selling $150,000 worth of stock on an insider tip, when she's got BILLIONS, and these guys get "busted", but the real perps with friends in high places get a free ride.
How many people did these guys, and Martha too, actually really hurt? RAM is still pretty cheap, AFAIK Martha wasn't found to have a history of insider trading... so WTF?
CDs cost $16 - $20, unreasonable by most peoples' estimation, and the RIAA has been found guilty of price fixing, but noone went to jail. If I want a new retail copy of 'doze XP, it's gonna run over $300, yet all MS's recent competition had to give their stuff away for free, and couldn't get OEMs to preload their stuff even though people were asking for it(BeOS). One of the Enron execs committed suicide out of guilt, and the other execs without a conscience have been given a free ride.
This is like putting weed smokers in jail for 5 to 10 and letting rapists out after 3 for good behavior. But shit, we do that too in this country, D'oh!
It seems to me that "Justice" is completely dead in America.
Sticking feathers up your butt does not make you a chicken - Tyler Durden
Because of course people from Germany have never done anything greedy, self-serving or imperialistic before now.
The market had a peak in the first half of the year, and memory is only now back to where it was this time last year.
This chart shows March-December 2004 price levels for 256 meg of PC 2700 DDR. March: $42, June $46, July-November: $38-$40, December: $35. That 5% trading range for 5 months probably postponed a number of purchases. In contrast that same memory was trading in $36-$41 last holiday season.
PC2100 DDR shows a similar trend in 2003 and 2004.
More statistics here. Note - if the mouse won't work with the pull-down menus, try your keyboard. January-March are messed up on the 2004 charts, sorry.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Your argument seems to be demagogical for me, as you can argument A->B where A is the Infineon case, and B is "world big problems". And, sorry if I am too much hard, your argumentation it is absoluteny non-sense.
Industry business is, by design, greedy and competitive; hey, you're living into a heartless neoliberal capitalist society, are this kind of tactics arre new for you? Well, the world, unfortunately it is plenty of them.
International and local laws avaible to correct these unfair operations should be applied, harder every time the fault is repeated. By the way, related to the human poverty and misery, I hope that some thay will arrive new laws declaring human misery illegal. The easiest way of imposing a point of view is to smash the other. I hope the humanity will not take that way, still to be lazy it is the easiest, I still believe in common efforts to achieve a better world for every one, not just one world for every one. The ideal could be one world for each one, allowing freedom to look with the color that you like, being free de facto (not in the anarchic sense, but socialdemocrat one, respecting the others to be respected, etc).
It was already prooven that DDR2 would not be better then DDR until speeds reached a minimum of 800 Mhz or higher on the FSB. The real difference will be felt at around 1.2 Ghz, which DDR2 can reach, but Intel being Intel (and not actually thinking out tech changes, but believing they can force it down their customers no matter if it is no better then other techs out and more expensive, think RDRAM), has decided to not actually release a chipset to use DDR2 at faster speeds until mid to late 2005. By which time, all customers will have felt the slow performance and get pissed because the PR didn't fit the product. Especially when they are forced to buy something that costs about 1.5-2x the cost of DDR and get no performance gain at all. It is again a case of Intel shooting its foot off in a race because the foot is extra weight, but not realizing that it actually needs that foot to stand on and run with! They have done this many times as of late and it is finally starting to show. Their stock has dropped considerably, their market share has dropped, and God forbid Mr. "I'm in Intel's back pocket" Dell, is going to start selling AMD based systems because companies are demanding it due to lack of progress from Intel over the last 3 years (Intel has been in a stall ever since they released the 3.0C 800FSB P4's, while their competitor has not only ramped up speeds during that time, but also introduced 64bit CPU's as well, which are truely spanking Intel in number crunching, hense why the reason for customer companies' demand for them).
We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"
There's more wrongdoing going on than just Infineon AG.
home.comcast.net/~plinius/malfeasance.html
That's what they are. Conspiracy Theorists! Paranoid goofballs.
Corporations DO have control of the government. Why? Money. Corporations do change laws and policies to benefit them. Why? Money. Executives do participate in conspiracies. Why? Money.
At the cost of the citizen. When are people going to fracking wake up and take back our life liberty and freedom? If you think you're a real patriot, wait until the war turns against you.
http://www.theregister.co.uk/2004/03/16/ec_approve s_infineon_state_aid/
They get money handed to them from the euros, and taken from them by the yanks.
That article has a link to an older article in which this appears:
"Commission officials said that assessment will be based on whether "the proposed project would take place in a sector suffering from structural over-capacity". And they note: "The new Infineon plant is scheduled to produce DRAMs - a market where careful scrutiny of the development of sales proves necessary.""
Seeing as how there was an obvious glut in that sector, its amazing these things get passed.
Personally, I think white collar crime is the perfect/only place that Sharia law should be implemented. Lets get some blood on those collars!
It may not be surprising but it is insulting to see a max sentence of six months for a crime involving MILLIONS. The more the person attempts to steal the more time they should serve. Remind me again how much time you get for stealing a car worth 1,001 dollars?
>everyone is greedy to a point.
And who exactly is above this? Greed is extreme selfishness, but we all suffer from selfishness. If we didn't why would we get off our asses, go to school, get a job, start a side project or two or three, etc. You, the poster, obvious have access to a computer and you're literate so you have parken of the "selfishness" you decry pretty well yourself.
>What the heck will it take?
Well, less "humans suck" attitude and better ways to deal with ones social and economic problems. A better informed public through a better media. Strict limitations on marketers and ads. Do you really think Americans would be so obese if it wasnt for all that marketing done directly to kids by fast food outlets? etc
That whole thing stinks. While US Company Rambus gets off the hook with all its shenanigans (which cost the industry and consumers billions) apparently people working in Germany now get made an example of.
Disgusting. And, while we are at it - what happend to "no taxation without representation" ? What do you bet US company Micron will not get harmed in this at all, while all the others will take hefty fines ?
How on God's green Earth is this related to rights online?
At the bottom of the
I think companies should be punished for theft and price fixing but I have a problem when the US Govt. just dumps those fines back their coffers (or for tax breaks for the rich instead of reducing the general deficit).
IMO it's still a scam and the general public is still getting screwed.
"And a voice was screaming: 'Holy Jesus! What are these goddamn animals?'" - HST
To the shareholders. The executives should have their families butchered in front of them and then spend their sentence being analy raped by robots.
What exactly are you complaining about ? The industry was obviously not so harsh if all the suppliers could agree to not sell any lower than a certain price. If they could not sell lower, there wouldn't need to be any price fixing because supply and demand takes care of it. But they could, except didn't want to, and made sure no one else does, to keep their margins.
To a very large degree, the very instincts which empowered us to survive on a younger planet are now compelling us to harm one another and ultimately inhibit our true potential as a species.
:)
What makes a terrorist? The very same level of loyalty and obedience that empowered cave-men to fight to the death for their chief...that is to say, an instinctually-necessary ability to turn off one's capacity for independent thought in order to make the group stronger. All pack animals can do this, and this ability keeps the pack alive.
What makes an oppressive all-consuming monopoly? The very same hoarding instincts that empowered primitive humans to survive the winter.
What makes impoverished children? The very same reproductive instincts that kept the species alive in the most dangerous and miserable of circumstances. That is to say, a desire to reproduce that is strong to the point of leaving people feeling incomplete apart from having children, even when it makes absolutely no logical sense (given ones financial state and state in the relationship) to have children.
Evolution has produced all of these tendencies (and more). I would speculate that ALL of the major problems of our day can be traced back to our inability to act in dis-accordince with our instincts (some people are better at this than others, but the majority suck at it, since the payoff isn't sufficiently visible).
Will evolution help us overcome this? Or will it require direct tampering (I am thinking nerual-bio integration, genetic manipulation, and so on)? I really don't know, but my money is on direct tampering just because evolution takes too long.
Price fixing is the norm in the industry. Especially if you own a monopoly in say operating systems and Office suites.
You do not see the government go after them do you? Oh wait its because we need to defend innovation and capitalism.
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The US$160 million doesn't seem like so much coming right on the heels of the ProMOS settlement.
As a law student struggling through an antitrust course right now, I can add a few comments. First, remember that these are the individual executives who are pleading guilty, not just the company, which probably means that there is a lot of evidence against them specifically. I am also surprised that these people have already been sentenced. What often happens is that the US Attorney will get the low-level defendants to turn on their peers and testify. After their testimony in another case they are then sentenced. In the current federal sentencing schemes, this is one of the few things that they can use to bargain down their sentence. Otherwise they are pretty bound to a strict calculation of jail time. Perhaps they stonewalled, and refused to help.
Also, remember that there are civil claims that can be brought by the companies that purchased the DRAM (i.e., Dell) but not the end consumers of the computers (I think). If they are successful, then they get treble damages, which is freakin' huge. The criminal charges do a good job of laying the ground work.
And, the easy targets fold first at a better rate. So maybe there are larger fish waiting in the wings.
I'm outraged!!! I'm going to stop using Infenion RAM right now!
**Pulls RAM Out**
oops... shoulda shutdown first.
DarkMantle I been bored, so I started a blog.
...if you've seen someone get pied... that means they're accessible enough to get close enough to... well.. you know.
(looks around nervously) QUIET! THEY'LL HEAR YOU!!! (trembles)
sure there's a crime
sure there's an investigation
sure there's punishment
but there is no justice
someone steals millions and gets six months while others get years for selling a bag of weed or just for being homeless
ain't america great, eh
rich peeps sure suck
scumbags
It would seem to me that in order to illegally fix prices there would have to be a collusion of all the memory chip makers. How come only the german one is punished?
It's not robbery, since people were buying it. Convicted of overcharging millions of people is more appropriate.
Saying "I'll probably get modded down for this", is a magnet for my -1 mod token. I hate to disappoint.
What does taxation have to do with it?
The govt?? Really? Why??
WTF kinda system is this where the govt. makes
cash every time they find a company that screwed the populous over??
Whatever... nothing to see here folks.. move along...
RAM is cheap... What are the ill effects of price fixing that these guys are so terrible for? I'm not being a troll, I just don't understand. I thought people were free to set their own prices for their goods?
Don't take life so seriously. No one makes it out alive.
Try 12 years now for a crime they didn't commit.
Now you want to talk about not having any trust
in the justice system?
Justice in america is "Justas much as you can afford"
Taxation is the ultimate symbol of beeing governed. I think people should only be answereable to a set of rules they have democratic control over.
Two of those guys lived and worked in Germany. If what they did was a crime in Germany, they should have been tried here. If not, they should not have been tried at all.
Unfortunately we see more and more attempts of the US of A to extend the reach of their laws far beyond their borders. Call it legal imperialism. Most of that isn't even criminal law. For instance I work for a Geramn subsidiary of a british company. Now, out of the blue, we sudddenly have to conform to all kinds of stupid and twisted rules made up by some US regulatory body.
I could go on. For every idiot in the world trying to sue somebody there apparently is a goofy judge in the US of A willing to take up his case.
At some point the world will have to make it loud and clear to the US of A that no, we are not governed by you, and no, your rules and your laws don't apply here.
It is NOT okay to fix prices.
OTOH, it is completely okay to main and kill (find the link to the Bhopal story yourself; I feel to sick already).
I recognized your sig, which is the only reason that I did not instantly dismiss your post as flame-bait.
Two points:
A) It's sarcasm, not irony.
B) It's only sarcasm if you say it sarcastically. Otherwise, it's just flamebait.
Bv2) If anyone else had written this one, you'd've modded it down too. because it's not at all clear what you were talking about...
-Sig needed: apply within
Changa hates change.
People in the US need to understand the relationship between two questions: "is it a good time to find a job in the US?" and "is it a good deal to make a company in the US?" You need to understand that in order for the answer to the first question to be sustainably "yes", it is necessary for answer to the second question to be "yes." Right now, job creators are being treated as villains in the US, so many of the smart ones realize that if they want to set up shop, it's a better deal to do it elsewhere.
Could you please name a US federal prison where inmates "get their own room and they get to play croquet with their fellow white-collar inmates on the weekends?" Can you even name a state prison where this is so? (I know there are plenty of prisons where inmates get their own rooms for high flight individuals or spies could divulge secrets. I want to know prisons that match all three of your criteria: prisoners have their own rooms, play croquet on weekends and are specifically for white collar criminals.)