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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."
You can't price-fix without at least two parties. Anyone know who the co-conspirator(s) are?
When you're fixing prices
When the punishment for the crime is far lower than the profit made from it, crime will be common. I wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
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 wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
How do you have government-mandated liabilitiy limits in a free market?
Ah, you can't.
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 !
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I doubt you have the Dell & HP price guides. You have no idea what they where charged and what they cost to make.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
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.
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.
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.
The surprise is not that there is criminal corporate behavior. The surprise is that the Department of Justice actually did their job and prosecuted it.
More like this, please. A lot more.
You are welcome on my lawn.
I wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
There is more than one aspect to limited liability. Limitations on liability for harm done to people who did not choose to involve themselves with your company is clearly a problem. If someone harms you, even by accident, you have a right to be "made whole", and in the case of a corporation you should be able to hold not just the organization but the people behind it responsible for the injury.
Fortunately, in the cases where monetary compensation is insufficient and/or the organization lacks the resources to pay compensation on behalf of its owners, it is generally possible to "pierce the corporate veil" and go after the owners directly. Ergo, this is rarely an issue as such. The bigger problem here is that there is a monopoly on justice in the form of the government-run court system, and these courts tend to favor those with the most to spend on legal representation. Justice should be blind to wealth, or lack thereof, but clearly that is not the case.
Moving on, the other aspect of limited liability is limitations on liability for debt to creditors. This is simply a matter of private contract wherein creditors agree to limit their claims to the assets of the organization, rather than the personal assets of the owners. This form of limited liability is perfectly compatible with an interference-free market.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
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 $1000 for 48k of ram for my Apple II. I am old :-/
So in that case why did Russia have a leader? Why did their army have a command structure? How did they get into space without desire and ambition. In other words, you don't know what you're talking about.
The market will magically create competitors out of nothing and the cartel/monopoly will do nothing to prevent it.
Sounds good to me. Hope you don't want to own any stock in those companies, because as an owner you will be liable for its losses.
Who enforces the contract?
The sooner optical disks drives go the way of the floppy, the better. The mechano-optical mechanism used in the damn things is just asking to break, and I have had to buy way too many drives over the years because of problems with them. Memory sticks and the internet can distribute anything that you might need to just as easily as a CD or DVD can. Software, music and movies should basically not be getting shipped on the damn things any more, so we can once and for all forget about having to build systems with optical drives without compromising the machine's utility.
Smith wrote a book prior to the Wealth of Nations advocating a better morality for dealings in this world. Smith if anything would have advocated for a harsher fine & perhaps forfeiture of property or profit.
Because Soviet Union was not a communist state. It never even claimed that it was one, in fact. It was the Union of Soviet Socialist Republics.
Sounds good to me. Hope you don't want to own any stock in those companies, because as an owner you will be liable for its losses.
Imagine that - incurring both the risks and rewards. It's almost like ... being an owner!
Oh, right, government exists to socialize the losses for corporation owners, I forgot.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
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)
Last I checked [pricewatch.com] you can get a DVD-RW for $19.98 and go Blu-ray for $10 more.
Wow, I see +$20, but yeah, that's worth it for my next drive purchase.
Is ripping all sorted out on linux at this point? I buy plenty of DVD's, but put them into storage once the data is safely on seekable storage. Might be time to step up to BluRay.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Yes, let's get rid of the last vestiges of our "ownership" of any kind of media.
My blog. Good stuff (when I remember to update it). Read it.
Not really. The only ripping I've had that is pretty solid is AnyDVDHD, and that's Windows-only AFAIK.
My blog. Good stuff (when I remember to update it). Read it.
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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I've had my fair share of optical devices fail, apparently with age. Perhaps it's down to the way in which they were used (sequential rather than random access) but in every case it's been the laser diode wearing out. Symptoms are usually a failure to write first, followed by a failure to read DVD media. I've never held on to one long enough for it to reject CDs, pressed or otherwise. Affected models are two Panasonics (including one slimline slot-loader), one Creative (re-badged I expect), one Pioneer, two Lite-Ons and most recently the one in my 360, which I think may have been a BenQ.
But, as it's been said, the plural of anecdote is not data.
If God forks the Universe every time you roll a die, he'd better have a damned good memory.
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
I think it's more to do the optics going out of alignment or something like that, which is why it starts failing on DVDs first.
In write-capable drives the first thing to go was the facility to write. In the two DVD-ROM drives I was able to extend - for a time - their lifespans with some tinkering with a little pot
If God forks the Universe every time you roll a die, he'd better have a damned good memory.
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...
So since they're OEM, without the overhead of retail sales and packaging, that means the prices are fixed at what, $15 per unit? God, and I thought Intel was bad at price-fixing!
My sister opened a computer store in Hawaii. She sells C shells by the seashore.
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.
Thanks for throwing your two cents in but regrettably I think you missed the point. The OP argues that the usual cause of failure is the mechano-optical system, by which I assumed he/she meant the laser positioning system. In my experience it's been the laser diode in most cases.
I'm quite aware of how much an optical drive costs, having bought a fair few to replace faulty ones, but I'm interested in how they fail. That's why I care. No-one mentioned cost before you came along.
If God forks the Universe every time you roll a die, he'd better have a damned good memory.
I think YOU missed the point friend, which is a hearty WHO GIVES A FUCK how it fails? do you sit there scratching your head on why that 89c Bic pen died? fuck no! its a $20 cheapo Chinese POS, why would anyone give a wet fart about WHY it failed? they use cheap parts, cheap parts die, period. As I said I got 7 years out of my 4x $189 DVD burner, but who would want to pay nearly ten times the current cost for reliable optical systems? Nobody that's who.
So if you really want to sit around and have a 4 hour discussion on why something that costs less than a pizza and a 6 pack died? Knock yourself out buddy. Seems stupid as fuck to waste your time. Hell in the time it took to type this I made more money than the fricking burner cost!
ACs don't waste your time replying, your posts are never seen by me.
My main point is that the god-damned things are flakey and unreliable due to their complexity compared to a memory stick. Perhaps it's the laser that dies, perhaps it's the mechanical parts going out of alignment - perhaps it's just dust building up on the optics - I don't really care, I just know that CD/DVD players just generally suck - and not just PC ones. I have had several stand-alone DVD players die too, as well as a few old school boom boxes that work fine except for the broken CD player. (ie. tape, radio amp and speakers work)
In comparison, there's relatively little to go wrong with a USB port / memory stick.