Computer chip makers agree to pay $173 million to settle antitrust case

Virginia Attorney General Ken Cuccinelli announced today that six computer chip companies have agreed to a $173 million settlement with 33 states over antitrust allegations that they conspired in a price-fixing scheme to overcharge consumers.

Agreeing to the settlement are American companies, Micron Technology Inc. and NEC Electronics America Inc; Infineon Technologies A.G of Germany; Hynix Semiconductor Inc. of South Korea; Elpida Memory Inc. of Japan and Mosel-Vitelic Corp. of Taiwan. The states previously settled with Samsung Semiconductor Inc. of South Korea for $10 million and with Winbond Electronics Corp. of Taiwan for $2 million. Micron could be reached immediately for comment.

In an emailed statement to Consumer Ally, NEC Electronics America, now Renesas Electronics America after a merger in April, says it "has always disputed and continues to dispute any liability or responsibility for the alleged antitrust acts. The company exited the DRAM market in March 2001, and while the settlement is not final until approved by the court, the decision to settle this lengthy and costly disputed claim now allows the company to completely focus on the merger and future business."

"Price-fixing strikes at the heart of a free market economy and injures the interests of consumers, business, and government agencies," Cuccinelli said in a statement. The companies agreed to pay over two years, plus interest. The cash will be divided among the affected consumers, including government purchasers.

In a 2006 federal lawsuit, the states alleged the companies agreed to inflate prices of dynamic random access memory chips from 1998 to 2002, during which the companies sold about $20 billion in DRAM chips in the United States. DRAM sales to major U.S. electronics manufacturers like Apple, Dell, IBM and Hewlett-Packard exceed $5 billion a year. The settlement is subject to court approval.

In a related federal case, 12 people and four companies -- Samsung, Hynix, Infineon and Elpida -- pleaded guilty to criminal price-fixing charges and paid fines of more than $730 million, according to the court papers filed in the state case.

Just last month, European Union regulators fined those same four companies and five others about $409 million over price fixing, Reuters is reporting.

Besides Virginia, the other states participating in the settlement are: Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Washington, West Virginia, and Wisconsin.
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