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Hitachi-LG Fined $21M For Price-Fixing Optical Drives
wiredmikey writes "Hitachi-LG Data Storage, a joint venture between Hitachi and LG Electronics, has agreed to plead guilty and to pay a $21.1 million criminal fine for its part in a scheme to rig bids and fix prices of optical disk drives. According to the Department of Justice, the company had conspired with others to rig the bidding process on optical disk drives sold to Dell, HP, and Microsoft. Court documents show that Dell and HP hosted optical disk drive procurement events in which bidders would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked."
and the (LG's) drives are utter shit failing in months after buying.
double guilty!
You mean there is actually someone (or something, must be careful about calling them people...) AT FAULT at the end of a justice department investigation?
Last I checked you can get a DVD-RW for $19.98 and go Blu-ray for $10 more.
Now, I suppose I'll have to RTFA to find out which CEOs or mid-level executives are going to prison in addition to the fine. I mean, 15 felony charges, there's gotta be a list of names, right?
Price-fixing on RAM, price-fixing on optical drives... next you'll be telling me Intel and AMD are conspiring to keep their prices higher too!
You can't price-fix without at least two parties. Anyone know who the co-conspirator(s) are?
When you're fixing prices
Huge multinational corporations fixing prices? How shocking
That's like 30 minutes of turnover right? On par with a slightly risky investment, if they got away with it sure would have been worth more. Statutory punishment is only meant to deter criminality for the ordinary man, but somehow corps and jobs are more important than the people behind them.
This reminds me an episode of the Simpsons where Mr Burns is found guilty of some crime and asked to pay some "huge" amount, and he asks Smithers to get him his wallet and pays the fine cash as if nothing happened.
I'm wondering where the money goes. I could use another optical drive right now. Or does Hitachi-LG just pay it and then raise prices to compensate? That would make the score something like Hitachi-LG 0, government 1, users -1.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
when it came out that they paid pc manufacturers to not use its competitor's cpus. or, when it came out that flat-panel lcd manufacturers fixed prices in usa.
all they got was a small 'fine' compared to the profits they made from the deal. aaaaand - voila - other companies did similar things too. why not just pay $21 million fine, making hundreds of millions or even billions in the process ?
if intel got a major hit, other companies would not dare doing the same. but see, they made PROFIT out of their bastardry, and voila - there are others doing that too !
Read radical news here
Adam Smith, who made the case for market economies creating public good without meaning to, also worried about businessmen conspiring to gouge the public. At a guess, he would have approved of antitrust laws.
Of course this doesn't happen in practice which is why we should have a communist state.
We know they have been doing this shit for so god damn long now it hurts.
Why aren't they fixing that crap already?
Just for shits and giggles: how would you ensure that something like this emphatically won't happen? No, you can't use the government for this, because that will be an expansion of government.
Those who can, do. Those who can't, sue.
It must be nice to be part of a huge corporation where no one has to worry about going to prison when they rip off a few million dollars from the public.
Yeah, like that works in practice... Communism can't work as long as desire, and ambition are human characteristics.. i.e. never.
Michael J. Ryan - tracker1.info
20 million dollars is pocket change for these companies.
Let's start with 20 BILLION dollars and see how many companies try something like this again...
In order to be a "free" market, the market must not be controlled by any governing body.
If a cartel takes control of a market, then it is "controlled," and the cartel is the governing body.
So, allowing companies to combine into cartels destroys a free market, and the result is the opposite of the capitalistic ideal.
That shouldn't be hard to understand, even to people who have never heard of Adam Smith.
There are objectively defined cases of price fixing, and this particular case seems to fit the definition. I'm not particularly trying to take heat off Hitachi in what follows, but it needs to be pointed out:
Whenever a tech industry member gets charged with price fixing, anti-trust, violating export restrictions, or similar, remember, the way the US government calculates the inflation rate, they include an adjustment to new tech for the new features. The way the formula works, if a basic laptop computer sells for, say, $499, and two years later, one still sells for $499, but the DVD reader has been upgraded to a Blue Ray reader for entry level models, the formula counts that as deflation, making the overall inflation rate lower. Pushing tech companies to stop price fixing, while ignoring price fixing by, say, kid's cereal makers, will make the inflation rate look a little better, while the reverse isn't usually true with the formula adjustments now used. Many parts of the financial sector benefit from the claim that inflation is low, as do those political factions that don't want COLAs for social security. If you really tally up just who would prefer the government investigate Microsoft, Sony, Hitachi or AMD, vrs. investigating, say, Caterpillar Tractor, Tesla Motors, General Mills, Walmart or Archer Daniels Midland, you can see some real pressure to pursue some investigations thoroughly and drop others quickly.
Who is John Cabal?
No one forces them to compete in this market if they don't like it let them stop making them. I will not feel bad for someone who tried to ripoff consumers to make a quick buck.
well I have no problem with cartels as long as it is not a 'natural monopoly' like telecom.
If Hitachi and LG rig their prices too high, all their buyers (HP, Dell...) will take note. If the price gets too high, they will setup their own optical manufacturing.
At a guess, he would have approved of antitrust laws.
But I'm not so sure he would agree that they should be modeled as they are currently.
It's silly to me that when corporations are found guilty of stuff like this that they simply receive a fine.
If this were a person, they would receive the fine as well as possible prison time.
Where is the corporate prison time? I'm not so sure large corporations would be as interested in breaking the law if they knew it was going to cost them 18 months of lost sales.
Someone flopped a steamer in the gene pool.
That was the monorail episode. The government quickly wasted the fine money on a faulty monorail. Most people overlooked Lisa's wise question of why a small town needed mass transit. sad.
So HP & Dell team together and let everyone know how much they are going to pay. Hitachi and friends get together to determine how much they are going to charge. I fail to see the difference in the behavior.
Unless you're willing to ban patents, they may not be able to set up their own manufacturing without the cooperation of the companies that are already conspiring against them.
When I look at the prices of the items I think to myself, WOW how much cheaper can this crap get?!? My first CPU was an 8080 and I paid over $300, my first LCD was $3300 and my first read only caddy 1x cd drive was $400. I paid $1000 for 48k of ram for my Apple II. I am old :-/
So in that case why did Russia have a leader? Why did their army have a command structure? How did they get into space without desire and ambition. In other words, you don't know what you're talking about.
The market will magically create competitors out of nothing and the cartel/monopoly will do nothing to prevent it.
Smith wrote a book prior to the Wealth of Nations advocating a better morality for dealings in this world. Smith if anything would have advocated for a harsher fine & perhaps forfeiture of property or profit.
Because Soviet Union was not a communist state. It never even claimed that it was one, in fact. It was the Union of Soviet Socialist Republics.
Now, I suppose I'll have to RTFA to find out which CEOs or mid-level executives are going to prison in addition to the fine. I mean, 15 felony charges, there's gotta be a list of names, right?
CEO's and executives are disposable. What absolutely must not happen is that the corporation be held liable (i.e. corporate charter suspension). That corporations are afforded the benefits of personhood but never* incur the risks (jail time, execution) is evidence enough that the government is a corporatocracy.
* I did once see a restaurant with a sign in the window noticing that it was shut down under order of the Sheriff's department for employing illegal dishwashers. Too small to pay to play, I guess.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
More like $19 more. The cheapest Bluray drive on Pricewatch is $39.
How does that apply here?
Patents aside, optical drives use ultra-precise elements, blue light laser that is capable of picking data 0.0003 millimeters apart, 400,000,000 times per second.
It's not like once the few competing firms fix price at $20, a garage competitor is gonna jump in and offer their blu-ray drives at $15, coming ahead of the price-fixing cartel.
Free market requires the law of big numbers to work. Say, one in 100 competitors decides to break out of a price fixing scheme, gets desperate and sells at a lower price.
Statistically, among 100,000 competitors who make shoes there will be 1000 rogue ones who oppose price fixing by others, come ahead of the rest in pricing, attract most customers and force others to drop their prices, for profit of the customer.
But here we don't have 100,000 competitors who make shoes. We have 10 competitors who make a highly specialized equipment. So statistically, there will be 0,1 rogue competitors who would break out of the price fixing agreement... which means none. Too few specimens for the law of big numbers to work, and free market fails. And no, deregulating the market won't suddenly create another 100 companies capable of manufacturing blue light laser that is capable of picking data 0.0003 millimeters apart, 400,000,000 times per second.
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This is what happens to rogue competitors.
The problem is that "criminal" is a meaningless term when it comes to corporations. Or have you ever heard of a corporation being put in jail?
No, a corporation will pay a fine. "Criminal" carries a much higher threat value for real persons, who can be put away.
Assorted stuff I do sometimes: Lemuria.org
Life's Greed
You are just plain wrong in many ways. So wrong, that it is amazing your large intestine didn't detach itself and thrust through your torso to impact your brain stem at supersonic speeds. But let me address one point in particular, a point so simple it is hoped that even someone of your anti-intellect may be able to grasp it.
It was the Union of Soviet Socialist Republics.
That is what it called itself, yes (more specifically, it called itself ÐоÑZÌÐ ÐоÐÐÌÑÑÐÐÑ... ÐоÑÐÐÐÐÑÑÐÌÑÐÑÐÐÑ... ÐÐÑÐÑfÌбÐÐÐ, but lets leave that detail aside). So what? In practice it was communist.
How do we know this? Well, for starters, it was a single party state ruled by the communist party. The economy was fully state managed, just like a communist state. Human freedom was substantially curtailed, just like a communist state.
Most importantly, like many communist states, it names itself something that doesn't include the word "communist." See Democratic People's Republic of Korea, People's Republic of China, and so forth.
Are you honestly so feeble-minded that you conclude that the Soviet Union wasn't communist because of it's name? The mountain of facts to the contrary notwithstanding? Seriously? Here is some advice: Give up on being a pseudo-intellectual and go get a job at McDonalds. At least pseudo-intellectuals sound smart. You can't even reach that level.
Broken unicode! My well-laid plans are foiled again!
So what? In practice it was communist.
How do we know this? Well, for starters, it was a single party state ruled by the communist party. The economy was fully state managed, just like a communist state. Human freedom was substantially curtailed, just like a communist state.
Soviet Union was ruled by a Communist party, because the official goal of the state (which was "guided" by the Party) was to build communism - eventually. It was always some time in the future, just around the corner - usually in about 20-30 years or so.
However, the state itself was socialist, and that is how it always described it. That is precisely why it had government, courts, laws etc. It's also why it had money. "From each according to his abilities, to each according to his contribution" was the principle of the state - that is unabashed socialism; communism would be "to each according to his need".
Communism is defined as a classless, stateless, moneyless society. No country in the world ever reached that state. Most people believe that it is not a state that can be ever reached, or at least not until the scarcity problem is universally solved. Communists believed that the problem could be solved by breeding a new kind of people, and to do so they had established socialist states with "dictatorship of the proletariat" which were supposed to work towards that goal.
All traits that you list are either socialist (state-managed economy), or are completely orthogonal to the whole thing (single party, human rights etc) - socialism is an economic system, not a political one. It doesn't have to be democratic to be counted as socialism.
It's all Marxism-Leninism 101.
Western states have had their own peculiar definition of "communism", which was ill-defined, but in practice simply meant "USSR and all countries following the same model", and made no distinction between economic and political systems. Even if using that definition, the economic part of Soviet "communism" is still statist socialism.
Most importantly, like many communist states, it names itself something that doesn't include the word "communist." See Democratic People's Republic of Korea, People's Republic of China, and so forth.
That's because none of those countries were communist or even claimed to be such. All being Marxist, they all subscribed to the same basic principle - socialism today, communism tomorrow.
Well, DPRK and PRC not so much these days. But then DPRK has moved from Marxism to its own leader-as-a-God ideology, and PRC is not even socialist anymore, much less "communist".
Are you honestly so feeble-minded that you conclude that the Soviet Union wasn't communist because of it's name?
No, I conclude that Soviet Union wasn't communist because I actually know what "communism" means, and what the actual life in the USSR was (being born there and all kinda helps). The fact that it was also honest in not describing itself as communist is helpful, but it's not why it wasn't communist.
All the recent burners I've bought list super-helicopter-ready speeds... Can I have one that is silent?
I don't fscking care if it's 2X read, I don't want to have to listen to it on a take off. (yes, I know, Nero Speed and some other software might take care of that, but I don't need/want them)
Anyways, burning at those speeds will only introduce more errors....
I've got better things to do tonight than die.
Let this slap on the wrist be a lesson to you, Hitachi-LG!
Oh, dear!
Being European, let me tell you how political beliefs are classified:
Those who call themselves "right-wingers", are actually far-right nationalists.
Those who call themselves "christian democrats" are actually neo-libertarians right-wingers.
Those who call themselves "socialists" or "social democrats" are actually right-wingers
Those who call themselves "left-wingers" are opportunistic parties, hoping to catch some votes here and there.
Those who call themselves "communists" are communists who want socialism.
Those who call themselves "revolutionaries" or "anarchists" or "anti-authoritarians" are radical left-wingers.
You might find it insane, but people like Dominique Strauss Kahn, who spent $3000 per day on his hotel at NY, are indeed called "socialists" in Europe.
I really don't know why.
When we say "socialism" here, it has NOTHING to do with Marxism-Lenninism or the socialism of the USSR or the Maoism of PRC.
We call that "communism" here.
Human freedom was substantially curtailed, just like a communist state
That actually reminds me of American foreign policy of the past decades on Latin America...
Here's hoping they make a sequel to "The Informant" with Matt Damon playing the part of some wacky Japanese nerd...
It's little wonder HP wanted to charge me nearly $500 for a replacement laptop DVD burner (for me to install myself) when one alone can't be more than $75 in total manufacturing costs (including profit).
Can't happen if there's 100 or more of them. But one... can be dealt with.
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Initially there were more than 100 regional cellular phone companies. How many are there today? Unless you are in some place like Wyoming they do not exist. Merger after merger left us with basically four shitty choices.
Hitachi-LG's fines are a drop in the bucket. I was surprised not to find Samsung on the list (yet, but they are being investigated) . I'm only assuming they'd be into price fixing optical drives, like they were happy to do with their RAM. As optical media increasingly becomes more rare and irrelevant, it'll be nice to think of this partnership in the past tense.
What are we, really, supposed to do about this? Hitachi was recently fined for LCD fixing,too. This type of behavior is rampant globally, and it's not as if consumers are readily aware. And even of those who are aware--its not like we can go "well, I don't need a computer."
Lets stop trading with these companies and make our own technology powerhouses stateside!
Just kidding, It's all manufactured in China, anyway.
Oh gracious asian overlords of the electronic markets, please have mercy on your loyal subjects.