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Samsung to Pay $90 Million in Price-Fixing Lawsuit [By Kenneth Davis] Samsung Electronics Co., the world’s largest memory-chip maker, has agreed to pay $90 million to settle a lawsuit filed by a coalition of state attorneys general who say that it used illegal price-fixing tactics to drive up the cost of computer memory chips.
The suit, filed in July, claimed that Samsung
containing DRAM chips, the prices of which
Inc., had to raise PC prices or reduce the
and numerous other companies made secret
were illegally set by Samsung and other
amounts of memory installed on their
arrangements to raise the prices of dynamic
major chip manufacturers.
systems on account of the higher costs, prosecutors said.
random access memory (DRAM) chips. The memory chips are the most commonly
About $80 million of the settlement will go
used products for storing and retrieving
to consumers nationwide, while $10 million
Cuomo said the case is continuing against
information in computers and electronic
will cover losses suffered by state and local
Infineon, Elpida, and Hynix as well as Micron
devices.
governments, Cuomo’s office said.
Technology, Inc., Mosel Vitelic Corp., Nanya
The complaint alleged that during a roughly
The settlement, which also includes
four-year period, the conspirators restrained
numerous private class-action suits, is
The settlement “puts the DRAM antitrust
competition for DRAM chips by exchanging
subject to approval in federal court in San
matter behind us,” said Chris Goodhart,
price and other confidential competitive
Francisco. New York, California, and Illinois
a spokesman for Samsung. “Samsung is
information, thereby inflating prices. The
were the lead plaintiffs in the case.
strongly committed to legal and ethical
Technology Corp., and NEC Electronics, Inc.
business practices and is moving forward
illegal activity continued until the U.S. Department of Justice began a criminal
The lawsuit was one of several filed
price-fixing investigation in June of 2002.
following a U.S. Justice Department
with its aggressive compliance program.”
investigation, which began in 2002, into
Cuomo said the state’s specific share of the
Samsung, which is based in Korea, has
whether computer-chip companies
settlement will be determined in the future.
also agreed to assist the states with
conspired to manipulate the number of
resolving price-fixing charges against other
DRAM chips released to market in a scheme
defendants named in the suit, New York
to inflate prices. The investigation resulted
Attorney General Andrew Cuomo said in a
in more than $730 million in fines and guilty
Samsung Electronics
statement last week.
pleas from four companies: Samsung,
www.samsung.com
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Elpida Memory, Inc., Infineon Technologies “Consumers, states, and localities were
AG, and Hynix Semiconductor, Inc.
victims of an international conspiracy that
Elpida Memory www.elpida.com/en/index.html
artificially raised the price of memory chips,”
In December, Young Hwan Park-President of
he said, “and thus illegally boosted the
Samsung Semiconductor, Inc., the company’s
Infineon Technologies AG
price of computers and popular high-tech
San Jose-based U.S. subsidiary-agreed to
www.infineon.com/cgi-bin/ifx/portal/ep/
products. This settlement is a major step in
plead guilty and serve 10 months in prison
home.do?tabId=0
recovering the overcharges that Samsung
for his role in the global price-fixing scheme.
and its co-conspirators illegally foisted on
He was the fifth Samsung executive to agree
consumers and taxpayers.”
to a prison sentence in the federal case.
The settlement covers consumers and
Companies such as Dell, Inc., Hewlett-
state and local governments nationwide
Packard Co., Apple, Inc., International
that overpaid on purchases of equipment
Business Machines Corp., and Gateway,
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