Print 39 comment(s) - last by tastyratz.. on May 25 at 11:36 AM

The EU has fined DRAM manufacturers $420M USD for price fixing. The fines follow $1B USD fines against DRAM manufacturers by U.S. regulators (plus jail time) over the past decade.  (Source: Silicon Valley Blog)

Samsung received the biggest fine -- $185M USD.  (Source: Ubergizmo)

U.S. Firm Micron escaped being fined by sharing dirt on its fellow DRAM manufacturers.  (Source: Maximum PC)
EU is back at it with antitrust regulation

The European Union and its regulatory arm the European Commission have had a pretty active antitrust record of late.  First it slapped Microsoft with a pair of fines for a total of $1.4B USD.  Then it hit Intel with a single fine of $1.45B USD.  In both cases, one of the chief accusations that the American tech firms were found guilty of was price fixing -- allegedly using underhanded pricing techniques such as offering a discount to retailers who refuse to carry competitors products.

Now nine American, European, and Asian DRAM producers have been slapped collectively with $420M USD (€331M , £283.1M) in fines for allegedly engaging in price fixing.  The fine against Samsung, Hynix, Infineon, NEC, Hitachi, Mitsubishi, Toshiba, Elpida and Nanya was announced yesterday.

Of the manufacturers, Samsung received the biggest fine -- $185.4M USD (€146M).  Germany's Infineon was fined the second most, ordered to pay $72.4M USD (€57M).

According to the EU investigation, the companies engaged in a seek collusion, fixing prices of DRAM between 1998 and 2002.  A "network of contacts" carried out the pricing scheme.

All companies cooperated with the investigation, thus their total fines were reduced 10 percent.  One company -- Boise, ID-based Micron Technology -- was implicated in the investigation, but cut a deal providing information to EU investigators on the deals it and its competitors cut almost a decade before.

Micron began to provide the EU with information in 2002, but it took several years to substantiate the claims and reach a decision on fines.  EU's Competition Commissioner, Joaquin Almunia comments on Micron's cooperation, "By acknowledging their participation in a cartel the companies have allowed the Commission to bring this long-running investigation to a close and to free up resources to investigate other suspected cartels."

EU law offers among the strictest bans on business practices that inhibit competition of any industrialized nation.  Almunia says he expects the number of EU filings to rise in the near future and the process be expedited.  He states, "As the procedure is applied to new cases it is expected to speed up investigations significantly."

Samsung has been fined $90M USD by U.S. regulators for price fixing, previously.  The U.S. has aggressively pursued DRAM manufacturers, too, handing out close to $1B USD in fines over the last decade.  Some DRAM executives have also served jail time related to price fixing.

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By B3an on 5/20/2010 10:27:38 AM , Rating: 4
I've always agreed with the EU fines. The companies broke the law, they were fined, simple as that. It's only americans that moan about it because it's often an american company that does something like this, and the fine money does not go the the U.S.
When the same thing happens to the same companies in the U.S it's suddenly ok.

I'd just like to see Apple nailed next for one of many things.

RE: Good
By metaltoiletry on 5/20/2010 10:39:33 AM , Rating: 2
I know many Europeans who complain about the EU often, it's not just Americans; however, I do agree with the EU on this.

RE: Good
By AssBall on 5/20/2010 10:40:55 AM , Rating: 2
One thing I wonder about the ligitimacy of this particular one though is that the E.U. was not formed until late 2001, but they are suing over stuff that somehow was infringing on their "laws" since 1998. Sounds fishy.

RE: Good
By monkeh624 on 5/20/2010 10:52:25 AM , Rating: 3
The EU was formed in 1993, not 2001. Perhaps you are thinking of the introduction of the single currency (€), which I believe was in late 2001, early 2002.

RE: Good
By AssBall on 5/20/2010 11:40:30 AM , Rating: 3
Ahh yeah, got my facts wrong. Thanks

RE: Good
By Xavi3n on 5/20/2010 12:22:16 PM , Rating: 2
The EU as it is now was formed in 1992 with the Maastricht Treaty (the Lisbon treaty essentially combined the "three pillars" of the E.U into one cohesive whole), before that it was the EEC which was mostly a trade body i have no idea where you got 2001 from.

RE: Good
By Reclaimer77 on 5/20/2010 10:50:03 AM , Rating: 3
So when is your vaunted EU going to fine OPEC for price fixing oil???

Yeah that's what I thought...

RE: Good
By Taft12 on 5/20/2010 10:57:04 AM , Rating: 2
OPEC isn't a group of companies.

RE: Good
By lightfoot on 5/20/10, Rating: 0
RE: Good
By lightfoot on 5/20/2010 11:25:34 AM , Rating: 2
Nix on that 'C' in OPEC thing... OPEC is a Cartel, but 'C' stands for Countries. My apologies for not having an 'Edit' button.

OPEC - Organization of Petroleum-Exporting Countries

RE: Good
By leuNam on 5/20/10, Rating: -1
RE: Good
By BZDTemp on 5/20/2010 12:05:10 PM , Rating: 1
Care to document the two problems you mention?

Just because such claims have been made many times by people here it does not make it so.

RE: Good
By lightfoot on 5/20/2010 12:52:59 PM , Rating: 2
According to the New York Times:
The commission can levy fines of up to 10 percent of a company’s annual global sales.

Companies that have been investigated or fined by the European Union for anti-trust:
Microsoft (US)
Intel (US)
Google (US)
Boeing (US)
Les Laboratoires Servier (France)
Anchor Steuerberatungsgesellschaft (German)
British Airways (UK)
Lear Corp (US)
Teva Pharmaceutical (Israel)

The majority of companies investigated are not based in the EU. This may simply be media bias, or simply the fact that the largest corporations are US based. But it appears to be discriminatory, even if it isn't.

RE: Good
By Strunf on 5/20/2010 12:09:38 PM , Rating: 1
Americans have problems with everyone else and vice-versa...

RE: Good
By aguilpa1 on 5/20/2010 12:30:34 PM , Rating: 2
In the US, OPEC is not the problem. OPEC generally keeps a steady supply at fairly consistent prices. The US commodities market is what screws the consumers but raising the price of oil whenever a timber wolf pisses on a pipeline or a single oil well gets knocked out for any reason regardless of it actually effects supplies.

RE: Good
By lightfoot on 5/20/2010 12:57:20 PM , Rating: 2
I didn't say that OPEC was a problem, but if the EU is going to investigate cartels for price fixing, why wouldn't they investigate the Mother of all Cartels, OPEC?

RE: Good
By knutjb on 5/20/2010 7:17:01 PM , Rating: 2
OPEC is the problem. They have their meetings where they set THEIR production levels. Those levels set the market price. They keep production at a rate to keep their profits up, just like the DRAM market getting hammered by the EU.

Speculators do get a little carried away but with the supply, during good economic times, kept at 99% or less of world demand prices go up. So when a hurricane, mechanical failure, et al, occurs speculators know that the slow logistics in oil supply could cause a temporary shortages. If they buy before the prices go up too high there is room for significant profit. Supply and demand.

To simply blame speculators and absolve OPEC is naive.

RE: Good
By Murloc on 5/20/2010 12:07:35 PM , Rating: 2
that's the typical example you can cite if someone say that the world is not hypocrital.

RE: Good
By Yawgm0th on 5/20/2010 11:04:43 AM , Rating: 5
I've always agreed with the EU fines. The companies broke the law, they were fined, simple as that.
Microsoft didn't break any laws by including a free web browser and a free media player with an operating system by any reasonable interpretation of the law.

I don't disagree with this decision, but it's not unreasonable for Americans to be perturbed by the EU excessively fining our largest software company for including the absolute basics in its product.

RE: Good
By ktcrow on 5/20/2010 1:21:59 PM , Rating: 3
What law was actually broken? Another difference between the EU and the US is that the EU fines companies for hurting competition whereas the US laws are focusing on what is best for the consumer.

SO if a company offers volume discounts, and it hurts comp, they could be eligible for a fine. Should Intel have taken higher profit margins per unit (thus hurting the consumer) so AMD and other comp that typically price below Intel can have a more sustainable business?

I think the EU, US, Japan, whomeever, should synch on what the law should be so it can be consistent. Right now it is a double standard, actually punishing businesses that have the most success in the market.

RE: Good
By alanore on 5/21/2010 3:28:03 AM , Rating: 3
It did hurt the customer, the 'volume discounts' were linked to keeping AMD CPUs out of the product line. At the time Pentium 4 vs Athlon 64, AMD had the best CPU at a cheaper price and better power consumption.

Volume discount is, and are allowed.

The EU Competition laws are customer-centric.

RE: Good
By afkrotch on 5/20/2010 8:02:54 PM , Rating: 2
"Samsung, Hynix, Infineon, NEC, Hitachi, Mitsubishi, Toshiba, Elpida and Nanya"

See a lot of American companies in there?

Anyways, I don't have a problem with the government fining these companies. The problem I see is that all these different governments can. Can they not create some kind of world organization for these things?

It's like committing one crime, but getting punished 2-3 times for it.

RE: Good
By tastyratz on 5/25/2010 11:36:39 AM , Rating: 2
I believe the term best describing what your looking for is "double jeopardy". This would make sense even if just treated as a gentleman's agreement among members of united nations. Certainly would be a step forward

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