Korean memory chip maker Hynix Semiconductor yesterday pled guilty to breaching US antitrust laws for price fixing in its dynamic random access memory (or DRAM) chip business. The fine of $185 million is the third 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 has now followed suit, pleading guilty to a felony charge relating to a violation of US Sherman Act in connection with the pricing in its DRAM chip business from 1st April 1999 to 15th June 2002.The Sherman Act carries a maximum fine of $10 million for corporations and a maximum penalty of three years imprisonment and a $350,000 fine for individuals for violations occurring before 22nd June 2004. However, this maximum fine may be increased to twice the gain the conspirators derived from the crime or twice the loss suffered by the victims of the crime, if either sum greater than the statutory maximum.According to the charge filed yesterday, Hynix conspired with unnamed DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers, including Dell, Hewlett-Packard, IBM and Apple.Under the plea agreement, which awaits approval by the court, Hynix has agreed to cooperate with the government in its ongoing investigation of other DRAM producers."Price fixing imperils free markets, impairs innovation, and harms American consumers," said Attorney General Alberto R Gonzales. "This case shows that high-tech price-fixing cartels will not be tolerated."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 are now serving jail terms of between four and six months. Each executive has also paid a fine of $250,000.
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