Thursday, June 21st 2018
Samsung, Micron, and Hynix Reportedly Slapped with Colossal Antitrust Fines
China's Anti-Monopoly Bureau of Ministry of Commerce visited Samsung Electronics, SK Hynix, and Micron Technology last year to express its concerns over the high prices of DRAM. Unfortunately, these meetings yielded no results as DRAM prices continued to skyrocket in the first quarter of this year. With their patience exhausted, Chinese antitrust regulators finally launched an investigation into Samsung, Micron, and Hynix, which collectively owns 90% of the global DRAM pie. The three DRAM vendors are allegedly cooperating with the Chinese authorities to shed some light into the whole DRAM price fixing matter. If found guilty, they could face fines between $800 million to $8 billion. The estimated fines were calculated based on the companies' DRAM sales in China between 2016 and 2017.
Whether you believe in coincidence or not, Samsung, Micron, and Hynix have a long history of being partners in crime. The trio, along with Infineon and Elpida Memory, conspired to fix prices on DRAM in the United States from April 1999 and June 2002. Infineon pleaded guilty in 2004 and was fined $160 million. Hynix cracked shortly afterwards and paid $185 million in fines. Elpida got off the hook easy with a $84 million fine, while Samsung took the biggest hit paying up to $300 million. Curiously, Infineon called it quits shortly after the incident, and Micron later acquired Elpida. In other news, China aims to become self-sufficient in the IC department by supporting local manufacturers like Yangtze Memory Technologies (YMTC).
Source:
DigiTimes
Whether you believe in coincidence or not, Samsung, Micron, and Hynix have a long history of being partners in crime. The trio, along with Infineon and Elpida Memory, conspired to fix prices on DRAM in the United States from April 1999 and June 2002. Infineon pleaded guilty in 2004 and was fined $160 million. Hynix cracked shortly afterwards and paid $185 million in fines. Elpida got off the hook easy with a $84 million fine, while Samsung took the biggest hit paying up to $300 million. Curiously, Infineon called it quits shortly after the incident, and Micron later acquired Elpida. In other news, China aims to become self-sufficient in the IC department by supporting local manufacturers like Yangtze Memory Technologies (YMTC).
26 Comments on Samsung, Micron, and Hynix Reportedly Slapped with Colossal Antitrust Fines
Now, will prices fall?
Journalism these days...
And now we want bigger fines? Only if we keep them from merging after this down to 1 or 2 companies. If there's only 1 company, they can't really collude to price fix, can they?
To be honest, we need trust busting here, not fines. The companies should be split in two which means six DRAM suppliers.
Also why doesn't the Chinese government enact some anti-price fixing laws that say if you are caught doing this crime, you WILL be put out of business forever ?
As for the lower prices question, HAHAHAHA, dream on....who do you think is gonna be picking up the tab for those fines? It sure as HELL won't be the mfgr's........
The best we can hope for is for them to forcibly split the companies up.
The companies will simply pass the cost of the fines onto the end-consumer.
Even if the companies were made to rebate a large percentage (50% or more) of the purchase price to consumers who purchased the products during the period when the price fixing occurred, the cost would still be passed on.
Rather than monetary punishment, those responsible for the crime should be imprisoned, and not in one of those 'country-club' prisons, either. Hard-labor.
The way i see it, the monetary punishment should be severe enough to "persuade" all companies to follow the rules AND those in charge @ the time of the crime should be imprisoned for it.
If @ all possible (via legislation, perhaps), a good chunk of such fines should be distributed to those that applied for it, via proof they were among the victims (invoices).
The fines are a decent compromise. It takes away the thing that is currently most important to these people, their money.
However, the fines are not high enough, IMO. Samsung alone makes almost $225 Billion a year, so even if they get the maximum of $8 Billion in fines, it doesn't really deter them from continuing the practice of price fixing(obviously since this is like the 2nd or 3rd time they've been caught doing it). They need to be fined in the $100s of Billions against the company, as well as personal fines against the management people involved that is proportional to their yearly income, ~50% of their yearly income. The tiny monetary slaps on the wrist that they do right now does nothing to deter price fixing.
*The argument can be made that essentially every tax payer is a victim here, since anyone with an any modern electronic device is effectively a victim. And there likely aren't a lot of tax payers that have no modern electronic device.
I think the fine should be adjusted proportionally to the infringing company, but severe enough to deter anyone from attempting to do it. Thinking along the lines of 30+% of annual income which, for Samsung's case, would be $67.5+ billion. I'm sure that amount of money would make them think allot more before attempting these kind of practices.
I agree that repaying those actually wronged would be the fairest solution.How many white collar criminals are we talking about, a few dozen? A mere drop in the bucket, and, any fines would more than pay for their incarceration anyway.
You would suggest crippling fines that could potentially cause many, many workers to lose their jobs, because the company may no longer have the resources to effectively maintain their workforce?