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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?
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.
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!!!
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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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.
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.
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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. :/
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"
What the hell are you on about? Free market does not mean 'companies are free to do what ever the hell they want'!
The company was found guilty of price fixing, an anti-free market practice. The whole idea behind a free market is that supply and demand have a huge influence over pricing. If you allow companies to conspire to set prices across the board, any power the consumer had to influence prices goes out the window.
Imagine, if you will, large midwestern agriculture company conspires with world markets to overcharge for grain products. End result? Everyone in the world pays more for the commodity. Do a google search on 'ADM' and 'price fixing' to read about that. Extend that to drug companies, power companies, you name it. Price fixing is bad, very bad, for consumers.
I suggest you do a little research before going off on a 'government is anti-business' crusade.
The price fixing that Rambus alleged was a conspiracy to charge much more for Rambus memory than a competitive market would. Since the same group of companies controlled the supply of both types of memory, they could do this. Rambus claimed that Rambus memory should be about ten percent (IIRC) more expensive than SDR DRAM due to higher manufacturing costs and Rambus IP licensing. The DRAM manufacturers sold it for twice the price of SDR DRAM. If Rambus is correct about the costs, then their claim that the high price of Rambus memory was due to price fixing is plausible.
Whoever corrects a mocker invites insult;
whoever rebukes a wicked man incurs abuse.
--Proverbs 9:7
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
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.