Korean memory chip maker Samsung Electronics and its US subsidiary have agreed to pay a $300 million fine to settle an antitrust investigation into price fixing in its dynamic random access memory (or DRAM chip) business.
It is the second largest criminal antitrust fine in US history.
The US Department of Justice launched an investigation into DRAM price fixing in 2002, concerned by dramatic price rises in the market that took place in 2001. The investigation, which is ongoing, targeted DRAM makers Micron Technology, Samsung, Hynix Semiconductor, Nanya Technologies and Infineon.
Infineon was the first company to admit wrongdoing and, in September last year, was fined $160 million. Hynix followed suit in April, receiving a fine of $185 million, and Samsung, which holds the largest share in the DRAM market, has now agreed to settle its part of the investigation.
According to the charges filed yesterday in the US District Court in San Francisco, between 1st April 1999 and 15th June 2002, Samsung and its US subsidiary Samsung Semiconductor Inc, conspired with other DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers, including Dell, HP, IBM and Apple.
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.
“Price fixing threatens our free market system, stifles innovation, and robs American consumers of the benefit of competitive prices,” said Attorney General Alberto R Gonzales. “Today’s guilty plea is evidence of the Department’s ongoing commitment to protect consumers from corporations that engage in illegal conduct.”
According to the BBC, Samsung described the charges as now being “fully resolved”.
"Samsung strongly supports fair competition and ethical practices and forbids anti-competitive behaviour," it said in a statement.
But the Justice Department is not only targeting the companies involved in the cartels. In December last year, four Infineon executives pleaded guilty to the DRAM price-fixing conspiracy and served jail terms of between four and six months. Each has also paid a $250,000 fine.
In December 2003, the Department charged Alfred P Censullo, a Regional Sales Manager for Micron Technology Inc, with obstruction of justice. He pleaded guilty and admitted to having withheld and altered documents responsive to a grand jury subpoena served on Micron in June 2002. Censullo was sentenced to serve six months of home detention, says the Department.
According to reports, the recently announced Samsung settlement does not extend to cover seven employees of the firm, who may face prosecution in the future.
