Samsung Faces $300M DoJ Fine for Price Fixing

Online staff -- 10/13/2005

Samsung Electronics has agreed to plead guilty to charges of participating in an international conspiracy to fix prices in the DRAM market, settling with the U. S. Department of Justice Antitrust Division (DoJ) to the tune of $300 million.

The $300 million fine is the second largest criminal antitrust fine in United States history and the largest criminal fine since 1999.

The DoJ’s ongoing industry-wide investigation has also seen Samsung competitor Hynix settle. That agreement, which came in April, cost Korea-based Hynix $185 million. German’s Infineon also faced a DoJ fine of $160 million in 2004.

In Infineon’s case, four executives pleaded guilty to the DRAM price-fixing conspiracy, and all served prison terms ranging from four to six months and each paid a $250,000 fine.

Micron, based here in the United States, also has its DoJ scars. The Boise, Idaho-based DRAM maker faced  DoJ charges of obstruction of justice when one of its sales managers admitted to having withheld and altered documents responsive to a grand jury subpoena served on Micron in June 2002. The manger was sentenced to serve six months of home detention.

Together, the four companies make up nearly all of the $7.7 billion in estimated DRAM sales to the United States in 2004.

According to the one-count felony charge filed today in the U.S. District Court in San Francisco, from April 1, 1999 to June 15, 2002, Samsung and its U.S. subsidiary, Samsung Semiconductor Inc., conspired with other DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers. The DoJ found that the computer makers directly affected by the price-fixing conspiracy were Dell, Compaq, Hewlett-Packard, Apple, IBM and Gateway.

Under the plea agreement, which must be approved by the court, Samsung has agreed to cooperate with the government in its ongoing investigation of other DRAM producers.

Samsung said today that the single charge against it by the DoJ is now fully resolved.

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