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Nine Chip Makers Fined $400M In EU For Price Fixing
eldavojohn writes "In a disturbing case for average consumers, nine DRAM chip manufacturers have been fined more than $400 million for price fixing. The named companies are Samsung, Hynix, Infineon, NEC, Hitachi, Mitsubishi, Toshiba, Elpida, and Nanya. A tenth company, Micron, avoided fines by reporting the other nine to the authorities. Since all companies cooperated with the probe, they received a 10% reduction in fines, so it could have been worse. The US DoJ has had its own history with chip makers and LCD makers in price fixing scandals."
Is it the fine that is disturbing?
The thing that was disturbing to me is that the consumer lost out here and the government is pulling in $400 million. When will the actual victim (people who made DRAM purchases) receive restitution? Never.
My work here is dung.
Looks like those fine capitalist companies don't like the competition part of capitalism either. They want protected profits too and screw the free market if that's what it takes.
Of course, the gov't will reduce our taxes by the $400 million...
Hahaha, I knew I couldn't write that with a straight face!
Sleep your way to a whiter smile...date a dentist!
So they were all fined a combined 402 million.
They made that, and then some so it's a cost of doing business.
Corporate fines are laughable... they factor it in these days.
Fine the shareholders. They'd find the people responsible.
404: sig not found.
What I found interesting was the amount: an average of about $44 million per corporation ($400M / 9). Contrast that with the profits each one made on this scheme.
The difference between spam and poop is that you don't have to dig through septic tanks looking for real food. -- Me
Fines are supposed to be a punishment so that companies avoid anti-competitive behavior in the future. You're right, however: the companies either have already made enough money from their unethical behavior, or they will roll it into the cost of future products. The punishment is not nearly severe enough.
Repeat offenders should be fined in the billions of dollars as a warning to other companies. The only thing that will keep shareholders interested in executives who obey the law are a few cases where companies are fined into bankruptcy and then broken up and sold off.
What I found interesting was the amount: an average of about $44 million per corporation ($400M / 9). Contrast that with the profits each one made on this scheme.
What annoys me is that a lot of this stuff is so pervasive that I cannot in anyway knowingly boycott any purchases of DRAM from these companies. There's probably DRAM in any piece of electronics you buy whether it be Sony, Nintendo or an actual Samsung product.
And then what happens to the companies who take a $44 million hit? You think their CEOs just sit down and eat that? They don't take their medicine, they slightly markup their product and again the consumer loses! This sort of price fixing fixed by fining model is just not working.
What I think should happen is that all the products that were price fixed should be entered into the public domain in the country where the price fixing was conducted and the company was found guilty. Meaning all patents and designs of those products are now owned by the public. The public overpaid for them so force the companies to give something back to the public. The manufacturing processes and techniques can be kept secret but all the chip design and patents should be open for competitors to step in and make a better cheaper product. I know a lot of people will think that's overly harsh but frankly the DRAM manufacturers should have thought of that before they started price fixing. You think times were tough when you tried to turn some illegal profit? Try now when everyone knows everything about your product. Really, that's the only way to 1) make them think twice about price fixing and 2) actually give something valuable to the victim that has a positive result instead of a negative result.
If that's the way business works in Korea, Taiwan and China then I don't care. But they need to learn that price fixing is not acceptable when they do business in the US and the EU. It blows my mind but it seems to happen everywhere in the world of circuitry and electronics. Since the companies just seem to be taking these fines in step and repeating or continuing with their practices, you have only one option: up the stakes.
My work here is dung.
Lets
The nine companies mentioned in the fine summary.
Towards the services provided by the EU.
CORRECTION: Consumers around the world have already paid for it.
No it isn't, it's a punishment for a group of corporations for breaking the law. You clearly haven't thought about it very much and have just been scared by the "T" word, the alternative to fines is to permit them to get away with collusion, and that will just raise prices, no. BTW I like paying the T word as it provides me with many services, not the least of which is a cheap world class medical system (Shamelessly borrowed from Shutdown -p and slightly altered).
I'm just saying you're an idiot, OK, that's a bit harsh. Perhaps you are a really intelligent person but you've just had a brain failure during that post.
Please think a bit more critically. This isn't a "tax" (gasp, shock horror) it's punishment for something they've already done. First this will end up coming out of the companies bottom line because 1. after being convicted of collusion they will be watched like a hawk and 2. now their cartel is being broken up actual competition will ensue (with all the price cutting benefits therein). I'm sick of people assuming this is a zero sum game, that prices will rise because it costs them more in fines. This thinking ignores the fact that the market will only pay for what it will bare and ultimately raising prices to cover a loss from a fine will attract more attention from the authorities as well as reduce the amount of product they can sell. The market will not automatically accept the rise of all RAM prices unless they all raise the price at once and well that's collusion, which what got them into trouble in the first place.
Calling someone a "hater" only means you can not rationally rebut their argument.
price fixing is not free market, nub.
Say what ? Price fixing is *absolutely* "free market". Huge cartels (if not just one big monopoly) is exactly where the "free market" would end up without this sort of regulation.
Call me cynical, but semiconductor is one of the few industries where heavy competition happens and prices fall down quickly. I dont mind price-fixing if it saves an industry (and I am talking as someone currently unemployed and having difficulties making a semiconductor start-up mainly due to the current state of the industry). Compared to other professions, when will Lawyers be fined for price fixing??? When will hospitals and medical insurance companies be?? This is mainly the case because it's easier to get into Engineering than it is to get into Law or Medicine. People at the top in Law and Medicine make sure to limit the number of professionals getting into their ecosystem each year so they can justify their high salaries. Then you keep hearing (at least here in the UK) from all of these people/government official the old cliche of: "We need more doctors to solve the health issue!" - and all I see around me is an abundance of people wanting to be medical doctors but not being able to become one.
Agree - I think price-fixing is acceptable to me if it saves this over-competitive industry.
You have it backwards. The European markets are "golden geese" to the chip makers! There will always be yet another competitor that would happily sell and profit in the European market(s) should the competition die off. This is basic economics, but I don't expect more on Slashdot.
And what tax revenue are you referring to? These companies sell their products in Europe, but the profits are sent back home. The majority of the companies mentioned are not European. The only tax revenue Europe sees in this case is sales tax on the items and a limited tax on the profits, after deductions, of the European branches.
The real issue is abusing the markets you operate in, if you want do business in Europe or the US you have to follow the local rules. I really hate the way ignorant Slashdotters rant when they talk about the EU and fines! Never mind that the US does exactly the same thing, however when Europe and the EU decides to act according to our identical laws "you" dare criticize and pass judgment on matters you have no understanding of!
The EU is acting to regulate markets in accordance with law, the motive is clearly to keep markets healthy for producers and buyers alike. The guilty parties are the chip makers!
I don't think most Americans understand how fervently nationalist they sound on the web.
That's how they catch them. It creates a nice Prisioner's Dilema where the first to break ranks get's away with it.
Countries that have laws for this experience much higher rates of catching price-fixing cartels than those who don't.
After they have proven themselves as snitches, who exactly would trust them and get in a price fixing cartel with them?