SAMSUNG PAYS $300ML FINE….PRICE FIXING

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SAMSUNG PAYS $300ML FINE….PRICE FIXING

 user 2005-10-14 at 10:57:00 am Views: 120
  • #14016

    Samsung to Pay $300 Million Fine for Price Fixing
    (Oct. 05) – Samsung, the
    world’s largest maker of memory chips for computers and other
    electronic gadgets, has agreed to plead guilty to price fixing and pay
    a $300 million fine, U.S. officials said Thursday.
    The penalty is the second-largest criminal antitrust fine ever and caps
    a three-year investigation into the largest makers of dynamic random
    access memory computer chips, a $7.7 billion market in the United
    States.
    The guilty plea to the single felony charge by South Korea-based
    Samsung Electronics Co. Ltd. and its U.S. subsidiary, Samsung
    Semiconductor Inc., was to be entered Thursday in U.S. District Court
    in San Francisco.
    The government’s acting antitrust chief, Thomas O. Barnett, said seven
    Samsung employees were not protected by the guilty plea, an indication
    they may individually face criminal antitrust charges.
    “That’s a decision for us to make moving forward,” Barnett said. He
    added that prosecuting individuals – not just companies – in
    price-fixing cases is an important deterrent against similar abuses.
    The Justice Department already has secured similar guilty pleas from
    two other companies and collected more than $345 million in fines.
    “Price-fixing threatens our free market system, stifles innovation and
    robs American consumers of the benefit of competitive prices,” Attorney
    General Alberto Gonzales said.
    Samsung said in a statement the company “strongly supports fair
    competition and ethical practices and forbids anti-competitive
    behavior.” A spokeswoman, Chris Goodhart, declined to identify the
    seven employees or say whether they still worked for Samsung.
    Samsung received grand jury subpoenas in connection with the
    investigation during 2002, and put aside $100 million late last year to
    pay potential criminal penalties.
    Samsung’s top competitor, Seoul-based Hynix, agreed earlier this year
    to plead guilty to price fixing and pay a $185 million fine. Last
    September, rival Infineon Technologies AG of Germany agreed to a $160
    million fine. Another competitor, Micron Technology Inc. of Boise,
    Idaho, has been cooperating with prosecutors and was not expected to
    face charges.
    The government accused the companies of conspiring in e-mails,
    telephone calls and face-to-face meetings to fix prices of memory chips
    between April 1999 and June 2002. The chips are used in digital
    recorders, personal computers, printers, video recorders, mobile phones
    and many other electronics.
    The government said the victims of the alleged price-fixing were Dell
    Inc., Compaq Computer Corp., Hewlett-Packard Co., Apple Computer Inc.,
    International Business Machines Corp. and Gateway Inc.
    Barrett said Apple and Dell raised computer prices to compensate, and
    other companies responded by reducing the amount of memory installed in
    computers they sold but kept consumer prices the same.
    The investigation started in 2002, a year after memory chip prices
    began to climb even though the high-tech industry was in a tailspin. At
    the time, the hikes were attributed to tight supplies, although
    then-Dell Computer CEO Michael Dell blamed them on cartel-like behavior
    by chip makers