RAM Manufacturers Fined for Price Fixing

TufelKinder writes "From Law.com: 'In the largest fine ever obtained by San Francisco antitrust prosecutors, a Korean company has agreed to plead guilty and pay $185 million for its role in a conspiracy to drive up the price of computer chips.' Micron and Infineon have also been fined for their role in the scheme." From the article: "It's the third-largest fine of its kind in the United States, and it could be just a preview of even bigger penalties. The far-reaching computer chip investigation, which alleges wrongdoing from 1999 through 2002, affects thousands of consumers."

Comments

Your honor, I don't have that memory

[ishmalius]

Honest

Thanks a lot....

[Solder Fumes]

So the money goes to who, instead of the customers?

Re:Thanks a lot....

[michael path]

No, no, no. This money goes to WHOM.

Re:Thanks a lot....

[VivianC]

The Lawyers. It always goes to the lawyers. We'll get stupid coupons or something.

Re:Thanks a lot....

[Sheepdot]

Enforcing DMCA litigation in San Francisco. What?!? Did you really think the government would give it back to you?

Of the 185 million, half goes to the court costs on the part of the government (92.5 million). Half of that goes to lawyers (46 million). Half of that goes to the expert witnesses (23 million). Half of that goes to the "betterment of society" committee, that takes a look at how RAM prices affect San Francisco's children (11 million).

Another half gets lost in the bureaucratic mix (6 million). Half of that goes to fun a failed municipal wireless project (3 million). And the other 3 million goes back to the good citizen's of San Francisco in the form of a park or statue or something else people can look at and talk proudly of how their government provides them with so much.

Just makes you damn proud to be an American, doesn't it? I know I am!

Wow

[koreaman]

Ram is pretty cheap as it is, it's gonna be awesome if somehow prices drop even more because of this.

Re:Wow

[timeOday]

Eh? My perception is the opposite. RAM prices seem to have hardly budged in a year, which is strange.

Re:Wow

[Archon]

I have plenty of ram as it is. What the hell am I gonna do with 2gigs?

I'm old enough to remember a Radio Shack employee telling me that I'd never need more than 4K of RAM. Or of an Apple employee telling me some years later that I'd never need more than a 5 MB HD. Or now of you, asking what they'd ever do with 2 GB of RAM.

The more RAM, the less has to be done in a HD. I don't ever turn my computers off as it is and leave as many apps running as possible. Things are always just a click away and my access to things is nearly instantaneous. This is what I want, and I always want more.

So

[Neil Blender]

Will they pass the cost onto the consumer?

US retailers

[Isopropyl]

"Last year, nearly $8 billion worth of DRAM was sold in the United States. Customers touched by Hynix's illegal activities include Dell Inc., Compaq Computer Corp., Hewlett-Packard Co., Apple Computer Inc., International Business Machines Corp. and Gateway Inc., according to the Justice Department."

This affects a lot of consumers. I wonder what the involvement of each individual retailer was?

Well done, lads.

[blueadept1]

This has got to be a wake-up call to major corporations. This goes to show that price-fixing will not be tolerated in the tech industry. Now perhaps we could get this to extend to other industries such as DVD's/CD's, and maybe even OIL!

Okay, okay, I admit it, I'm drunk.

Re:Well done, lads.

[StratoChief66]

No, they probably made ten times that from the price fixing, so the cost of doing the price fixing is still less than the benifits, so it was still worth it. Corporations don't have morals, they have cost/benifit analysis depts.

well thats just great

[1evilmonkey]

Yay so I can use the money I will save on RAM and put it towards high gas prices.

I'm waiting

[waldoiverson]

*looks at $2.00 per meg PC-133 chips* ... ... ... *waits for class action lawsuit notification*

$185M sounds like a lot, but...

[pr0t0]

How much did they make during that time?

I'm often dissappointed in fines like this when I find out that the execs did a little jail time, paid a fine, but still have 6 Lamborghinis in the garage. It's important to implement fines that are severely punishing...like the people involved would have been WAY better off not pulling this kind of crap. The should be destitute. I can't stomach the wealth accumulated on the backs of the bruised.

I'm not saying that's what is going on here, I don't know. It just makes me sick when most people involved still come out ahead, and there is maybe one or two sacrificial lambs.

Re:Price Fixing...

[gunnk]

The cost of gas is shooting up to sky-high levels for many reasons:

a) OPEC has too much pricing power over crude oil
b) available supply is falling (it's finite)
c) demand is climbing (China, anyone?)
d) it's REALLY hard to get permission to build refineries in the U.S.

If seems to me that claiming "price fixing!" in this case is perfect example of the H.L. Mencken quote:

For every complex problem, there is a solution that is simple, neat, and wrong.

Clever move by Micron

[ctk76]

After joining/initiating price fixing with its competitors and making good profits, you rat out on your competitors without paying the fines.

heh

[Renraku]

Actually, the price of RAM will probably go up after this so said companies can afford to pay off their fines without reaching into their own pockets.

When a telephone company gets fined, where does the money come from? Increased prices/fees.

When an energy company gets fined, where does the money come from? Increased prices/fees.

When a car maker gets fined, where does the money come from? Increased prices/fees.

Why do you think this will be any different? They're just going to do it again, and not get caught.

Re:Price Fixing...

[mbourgon]

Allow me to add another Mencken quote:
The American public knows what it wants, and deserves to get it. Good and hard.

this wasn't a class action

[hawk]

This was the government. It's a fine. Fines go to the government.

There have been additional claass action suits filed, which will make the ambulance chasers, err, plaintiff's lawyers, wealthy while producing almost nothing for the customers.

hawk

You know...

[rootedgimp]

this stuff happens all the time. its just usually there isnt enough hard evidence to do anything about it. as scary as it sounds, though, in big business nothing is a mistake. i bet you 186 million that that money is going to end up back in the hands of the people that started this price fix to begin with. anyway, maybe im over paranoid when it comes to money. perhaps it has something to do with the fact that the federal reserve isnt owned by the usa, and every president that attempted to change that died under odd circumstances or was assassinated. anyway, nothing to see here, go back to earning your ink'd papers. god help us all.

As settlement, each San Fran resident...

[Anonymous Coward]

...will receive a 32MB stick of PC 66 memory.

How much profit?

[ehiris]

I wonder how much they profited. The fine for the top music industry companies was about $143 million but due to price fixing consumers were overcharged $480 million. That's a profit of about $337 million.

Re:Price Fixing...

[timeOday]

What evidence do you have that the gas companies are price fixing? That gas is expensive? It's a finite resource in high demand. Welcome to the way economics works.

By "the way economics works," I hope you don't just mean fair market forces like supply and demand.

First, a lot of oil comes from OPEC, which is (openly) a cartel. They have well-publicized meetings every few months to fix oil prices.

Then there are the brokers and refiners. We have audio tapes of Enron execs laughing as they caused California's energy crisis of a few years ago by needlessly shutting down suppliers, in order to drive prices through the roof.

Then there's geopolitics. i.e. invading Iraq and then declaring Frace won't be getting any of the oil because they're uncooperative, then getting mad when we discover they weren't obeying our Oil For Food program.

I'm not saying basic economics is irrelevant, but let's not pretend Econ 101 is the real world either.

Awesome!

[ryanw]

So now they have a REAL reason to charge more for the memory. Sounds like a solution to benifit the consumers for sure! How much of the $185 million went to lawyers and lawfirms and how much of that is going back to the consumers? $0.18 checks aren't worth crap to the consumer that bought the memory at the 'fixed rate'. Cause in the end, the consumers get nothing back from a suit like this except paying more for the memory in the future because of the impact of the lawsuit. The lawyers make out like a bandit! Why else do imagine these lawsuits exist?

What the hell am I gonna do with 2gigs?

[nurb432]

Boot longhorn?