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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."
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.
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.
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.
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.
So you're saying they have to step up their price fixing efforts?
Of course, the way it actually works is that they made more than the amount of the fines by price fixing in the first place, so they just write it off as a cost of doing business.
Maybe they rigged it with fake bidders.