EU Slaps Chip Vendors with Penalties for Price-Fixing
As many as nine major chip vendors were fined a total of 331 million Euros (US $404.2 million) for participating in illegal price-fixing activities, by the European Union authorities. These include Samsung, Hynix, Nanya, Elpida, Infineon, NEC, Toshiba, Hitachi, and Mitsubishi. A 10th company in this price-fixing cartel was Micron Technology, which escaped the fine for exposing the malpractice to the EU authorities. Of these Samsung was given the single biggest fine of 146 million Euros, followed by Infineon at 57 million Euros. The fines were reduced by 10% because all companies extended cooperation in the investigations.
The price-fixing cartel mostly involved bad trade of DRAM chips, and was active between 1998 and 2002, operating with a network of contacts which secretly exchanged pricing information. They colluded to fix prices of DRAM chips sold to major PC and server manufacturers. Investigations in the scam began in 2002 when Micron blew the whistle on the cartel. "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," said EU's Competition Commissioner, Joaquin Almunia. "As the procedure is applied to new cases it is expected to speed up investigations significantly," he added.
The price-fixing cartel mostly involved bad trade of DRAM chips, and was active between 1998 and 2002, operating with a network of contacts which secretly exchanged pricing information. They colluded to fix prices of DRAM chips sold to major PC and server manufacturers. Investigations in the scam began in 2002 when Micron blew the whistle on the cartel. "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," said EU's Competition Commissioner, Joaquin Almunia. "As the procedure is applied to new cases it is expected to speed up investigations significantly," he added.