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HP Sues Seven Optical Drive Makers Over Price-Fixing
Lucas123 writes "HP has filed a lawsuit against seven makers of optical disk drive technology, claiming the companies engaged in widespread price fixing in order to drive up the cost of Blu-ray, DVD and CD drives for PC and peripheral equipment makers. The suit was filed Thursday at the district court in Houston against Toshiba, Samsung, Sony, Panasonic, NEC, TEAC and Quanta Storage. The lawsuit claims the conspiracy to drive up prices took place from at least Jan. 1, 2004 through Jan. 1, 2010, when "almost all forms of home entertainment and data storage were on optical discs" and the companies controlled 90% of the optical disk market. HP alleges the companies used industry events, such as CES, as cover to communicate competitive information and hammer out anticompetitive agreements."
It could still be legit though. Weren't a lot of those listed companies found guilty of price fixing CRT displays?
It seems suspicious that optical drives are so expensive despite being such old technology.
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Not only that, but it has taken an awfully long time for the price of Blu-Ray drives to really drop... maybe there was some fixing going on. I wouldn't be shocked.
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Because they ship, for example, laptops with these optical drives?
Isn't the refrain - borne out by numerous financial statements by the sued companies and others besides - that optical drives are pricing themselves into extinction with razor-thin margins due to fierce competition and decreasing demand? It's possible HP has a valid point or has stumbled onto evidence, but this sounds more like flailing before declaring that optical drives will be an optional feature going forward...
here we have another dying company trying to sue others to keep themselves afloat.
wouldn't be suprised if HP is dead in 2 years...
Thank Meg.
Maybe she could revive them by rolling out an online auction service. eBay sucks now.
A feeling of having made the same mistake before: Deja Foobar
The 405nm blue lasers in Blu-ray drives were covered by Nichia patents until the expired recently, and Nichia does sue to protect it's patents. Single source, patent-protected lasers were part of the reason it took so long for the prices to drop.
maybe because between the period of 2004-2010 it wasn't $15? (heck did a 32gb stick even exist in 2004?)
FTFA:
There was already a criminal investigation and the folks HP is suing pled guilty in a plea deal. Now HP is making the equivalent of a civil case.
American legal systems allow civil suits to follow criminal suits. And the defenders were already found criminally guilty, although they pled to some unknown settlement.
$150 or more? I picked up an ASUS from Newegg around 6 months ago for $35 or so. It's an internal model and has SATA connections. It works great and appears to be as high quality as my other ASUS gear (I've found their components to be very reliable). The software needed to play a Blu-Ray movie was much more expensive than the drive itself.
Hang on, no groklaw.
Damn
Curiosity was framed; ignorance killed the cat. -- Author unknown
Replying to myself, because on further review, HP does still make optical drives. You can get an HP CD-R/DVD-R from Newegg for ~$100, comparable to ones from other manufacturers which cost $20.
And HP is saying the competition is overpriced? WTF?
Or do they just badge engineer theirs these days, and the ~5x markup isn't enough for them?
"National Security is the chief cause of national insecurity." - Celine's First Law
I am making the assumption that nobody was stupid enough to create a PowerPoint deck labeled "How to price fix optical drives." Given that the article summary says that the accused went so far as to conceal their interactions under the guise of regular industry events like CES, I doubt they are going to find any sort of smoking gun during discovery.
Without information or evidence, there is nothing to compel the testimony or prove perjury.
HP Lawyer, "Did you collude with others to fix the prices on optical drives at CES?"
Sony Executive, "No I did not."
HP Laywer, "Well, in absence of evidence or testimony showing otherwise, I suppose we have to believe you."
Not only that, but it has taken an awfully long time for the price of Blu-Ray drives to really drop... maybe there was some fixing going on. I wouldn't be shocked.
The 405nm blue lasers in Blu-ray drives were covered by Nichia patents until the expired recently, and Nichia does sue to protect it's patents. Single source, patent-protected lasers were part of the reason it took so long for the prices to drop.
If this is true, it might explain a lot.
If it's not true (or not the main reason), then- as the GP suggested- it's the main story that would explain it. I'd been ready to say *exactly*.
Matter of fact, I'd say that the prices- of burners at least- haven't even dropped noticeably in recent years. Some time ago they gradually fell from around UK £150 to circa £70 (maybe £60-something on a good day) for the cheapest- and have been stuck there for several years now.
Looking at EBuyer, they appear to have a couple of slimlines in the £50-something range (why are those cheaper?!) but their cheapest desktop model is still £65 (inc VAT/tax).
Obviously that's burners- readers are cheaper and Blu-Ray video players appear to have become quite affordable a while back (like DVD players did in the early noughties).
But as for burners... while £65 is easily cheap enough for most computer geeks remotely bothered to be able to afford one, it's still nowhere near cheap enough to be a "no brainer" alternative to a DVD writer in a commodity PC for Joe Public (in the way that DVD writers replaced CD drives and DVD readers because the price difference was so minor). And that's what is needed- or *would* have been needed- for it to repeat the success of DVD-R.
To be honest, I already came to the conclusion some time back that BD-R had missed the boat. If it hasn't happened by now, it's not going to. While the DVD-R market is clearly declining, it's not being replaced by BD-R drives and discs, which never seemed to have achieved the same momentum. Solid state, HDD and online storage appear to be taking DVDs' place, not BD-R.
The question is, did the industry ever want it to?
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You sure showed me. They were $22, with free shipping, in 2009.
"National Security is the chief cause of national insecurity." - Celine's First Law
Actually older technology is only cheap if it's still widespread. The more esoteric a technology becomes, the less price pressure there is, largely because fewer and fewer companies are willing to make the investments in the factories necessary to produce the product. Case in point, floppy disks. Floppies are actually more expensive now then they were back in 1994, largely because almost nobody is using them. The few companies still making them can charge more for them because there is no competition. The people that are left with floppies are pretty much left with them out of necessity, because they are tied to legacy equipment that only accepts them etc.
While optical media isn't quite there yet, I wouldn't expect optical drives to fall much farther in price. More and more companies are going to drop out(or barring that, collude with the other manufacturers to fix the prices, as we are seeing here). Eventually causing the price of optical media and drives to bottom out then start creeping upward.
Monstar L
What about Betamax, Minidisc, and MemoryStick? Sony has been trying to force everyone onto a Sony-controlled format for many years, Bluray was merely their first success.
Except that HP did innovate; HP developed core standards essential IP for everything DVD+R and on. You can't build a BluRay burner without using HP's innovations. HP didn't decide to go it alone and build a whole optical drive ecosystem by themselves, but instead licensed their innovations to others.
Of course, since the IP is standards essential, it is 99% certain to be licensed on fixed-fee-per-unit FRAND terms. So if a monopolist or a cartel decide to sell fewer units at a higher price, the people who actually did the hard development work get shafted. Nevermind that the HP is also one of the biggest sellers of optical drives to end users.
So, yeah, if you can't innovate, go ahead and litigate. But if you do innovate, give a fair license, and then get cheated, well, I'd advise litigation in that case as well.
HP is a dying company. This is a SCO type move to bring in some revenue and/or negotiate favorable settlements in the form of discounts and cheap patent licenses.
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