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RAM Manufacturers Fined for Price Fixing 216

Posted by Zonk
from the coincidences-pile-up dept.
TufelKinder writes "From Law.com: 'In the largest fine ever obtained by San Francisco antitrust prosecutors, a Korean company has agreed to plead guilty and pay $185 million for its role in a conspiracy to drive up the price of computer chips.' Micron and Infineon have also been fined for their role in the scheme." From the article: "It's the third-largest fine of its kind in the United States, and it could be just a preview of even bigger penalties. The far-reaching computer chip investigation, which alleges wrongdoing from 1999 through 2002, affects thousands of consumers."
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RAM Manufacturers Fined for Price Fixing

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  • by ishmalius (153450) on Friday April 22, 2005 @04:45PM (#12317402)
    Honest
    • Prosecutor: "Did you, at any moment, raise your RAM prices?"

      Defendant: "I do not recall, sir."

      Prosecutor: "So you're a memory company and you don't remem--"

      Attorney: "Objection!"

      Judge: "What grounds?"

      Attorney: "Argumentative."

      Judge: "Overruled. You run a memory company, at least buy some of your product, dammit."

      Defendant: "Understood, Your Hon--"

      Judge: "You, just shut up."
  • Thanks a lot.... (Score:5, Insightful)

    by Solder Fumes (797270) on Friday April 22, 2005 @04:47PM (#12317425)
    So the money goes to who, instead of the customers?
    • by michael path (94586) on Friday April 22, 2005 @04:54PM (#12317537) Homepage Journal
      No, no, no. This money goes to WHOM.
    • by VivianC (206472) <internet_update@ya[ ].com ['hoo' in gap]> on Friday April 22, 2005 @05:06PM (#12317668) Homepage Journal
      The Lawyers. It always goes to the lawyers. We'll get stupid coupons or something.
    • by Sheepdot (211478) on Friday April 22, 2005 @05:12PM (#12317737) Journal
      Enforcing DMCA litigation in San Francisco. What?!? Did you really think the government would give it back to you?

      Of the 185 million, half goes to the court costs on the part of the government (92.5 million). Half of that goes to lawyers (46 million). Half of that goes to the expert witnesses (23 million). Half of that goes to the "betterment of society" committee, that takes a look at how RAM prices affect San Francisco's children (11 million).

      Another half gets lost in the bureaucratic mix (6 million). Half of that goes to fun a failed municipal wireless project (3 million). And the other 3 million goes back to the good citizen's of San Francisco in the form of a park or statue or something else people can look at and talk proudly of how their government provides them with so much.

      Just makes you damn proud to be an American, doesn't it? I know I am!
  • Wow (Score:3, Interesting)

    by koreaman (835838) <uman@umanwizard.com> on Friday April 22, 2005 @04:47PM (#12317435)
    Ram is pretty cheap as it is, it's gonna be awesome if somehow prices drop even more because of this.
    • Re:Wow (Score:3, Interesting)

      by Hatta (162192)
      Ram is pretty cheap as it is, it's gonna be awesome if somehow prices drop even more because of this.

      I have plenty of ram as it is. What the hell am I gonna do with 2gigs?

      Anyway, what I'm wondering is if this company made more from the price fixing than it lost from the fine. Somehow I suspect it did.
      • Re:Wow (Score:5, Insightful)

        by Archon (13753) on Friday April 22, 2005 @05:38PM (#12318012)
        I have plenty of ram as it is. What the hell am I gonna do with 2gigs?

        I'm old enough to remember a Radio Shack employee telling me that I'd never need more than 4K of RAM. Or of an Apple employee telling me some years later that I'd never need more than a 5 MB HD. Or now of you, asking what they'd ever do with 2 GB of RAM.

        The more RAM, the less has to be done in a HD. I don't ever turn my computers off as it is and leave as many apps running as possible. Things are always just a click away and my access to things is nearly instantaneous. This is what I want, and I always want more.
        • you would be in Radio shack, and that old guy would be talking about how he remember when you had to wait for everything to warm up because of tubes and you would roll your eyes?

          Your being that old guy.
        • I do work with music synthesis and man, can that shit eat RAM. I have a sample DVD of a drumkit, just a normal trap set with 5 toms, a selection of cymbals and so on. It's 2.4GB, oh and it's the small one. Their full one, with all different styles of kits (like using brushes instead of sticks) is 35GB (comes on 4 DVDs). The same company makes an orchestral sample set with basically all instruments from an orchestra in 3 different mic positons. 68GB.

          Now the sampler technology is advanced enough that it can
      • Re:Wow (Score:3, Funny)

        by Jorkapp (684095)
        2 gigs? You can do amazing things with 2 gigs.

        To start, you can cache Windows to a ramdrive to speed things up a little, or if you're a linux zealot, you can cache an entire Knoppix LiveCD to a ramdrive, and have all the more space on your HD.

        Of course, you could always cache pr0n videos to a ramdrive for uber-smooth playback.
        • Or you could actually let the kernel do a reasonable amount of disk caching and not manually copy anything to a ramdisk and get better performance on -everything-.

      • by nurb432 (527695) on Friday April 22, 2005 @07:16PM (#12318860) Homepage Journal
        Boot longhorn?
    • Re:Wow (Score:5, Insightful)

      by timeOday (582209) on Friday April 22, 2005 @05:24PM (#12317867)
      Eh? My perception is the opposite. RAM prices seem to have hardly budged in a year, which is strange.
    • Yeah, Ram prices will be going down, sure...

      But if I don't want to buy ram from Price Fixers, and I don't want to buy untested ram, what the heck am I supposed to do?

      --LWM

    • Ram is pretty cheap as it is, it's gonna be awesome if somehow prices drop even more because of this.

      I bought 4 x 512 GB PC133 RAM 4 years ago for $42 apiece (including shipping).

      Pricewatch now has them at $40. I haven't checked in the interim, but they basically haven't budged, judging solely from these two data points.

      My though is actually the opposite: this fine will increase the cost of doing business to the suppliers. The coming class-action suits will add to their expenses. I wouldn't be

  • So (Score:5, Funny)

    by Neil Blender (555885) <neilblender@gmail.com> on Friday April 22, 2005 @04:48PM (#12317453)
    Will they pass the cost onto the consumer?
    • You didn't think this huge judgement was to protect consumers did you? It's to punish people who sell products to consumers at unfairly low prices. So that does mean that any RAM you buy from them in the next year will be more expensive than it would have been without this fine.
  • US retailers (Score:4, Insightful)

    by Isopropyl (730365) on Friday April 22, 2005 @04:49PM (#12317456)
    "Last year, nearly $8 billion worth of DRAM was sold in the United States. Customers touched by Hynix's illegal activities include Dell Inc., Compaq Computer Corp., Hewlett-Packard Co., Apple Computer Inc., International Business Machines Corp. and Gateway Inc., according to the Justice Department."
    This affects a lot of consumers. I wonder what the involvement of each individual retailer was?
    • Re:US retailers (Score:3, Insightful)

      by hawk (1151)
      Pretty much the same: paying too much for RAM.

      hawk
    • Re:US retailers (Score:3, Informative)

      by Sheepdot (211478)
      This affects a lot of consumers. I wonder what the involvement of each individual retailer was?
      Well, here's what Dell did [tinyurl.com]. My guess is that most just paid up, or took Dell's route and closed certain models and re-released. It looks like Apple actually raised the price of a few models to compensate.

      A good deal of them actually just side-stepped the companies altogether after some time. A few million is pocket change to a company like Hynix with a market cap of 5.8 billion. They'll just release a few hundre
  • by blueadept1 (844312) on Friday April 22, 2005 @04:49PM (#12317460)
    This has got to be a wake-up call to major corporations. This goes to show that price-fixing will not be tolerated in the tech industry. Now perhaps we could get this to extend to other industries such as DVD's/CD's, and maybe even OIL!

    Okay, okay, I admit it, I'm drunk.
    • No, they probably made ten times that from the price fixing, so the cost of doing the price fixing is still less than the benifits, so it was still worth it. Corporations don't have morals, they have cost/benifit analysis depts.
      • by Intron (870560)
        The next generation wafer fab lines will cost ~$10B. All of which has to be paid off out of the sales of RAM chips. Since memory is a commodity part, buyers will always go to the cheapest source, so whoever is willing to accept the lowest margins wins. Unless everyone agrees to a minimum price.

        This isn't a cost/benefit argument, its a life or death decision to the manufacturers.
        • The next generation wafer fab lines will cost ~$10B. All of which has to be paid off out of the sales of RAM chips. Since memory is a commodity part, buyers will always go to the cheapest source, so whoever is willing to accept the lowest margins wins. Unless everyone agrees to a minimum price.

          This isn't a cost/benefit argument, its a life or death decision to the manufacturers.


          Well, if not everyone is buying a new fab, then some memory will be better than others, and therefore fetch a premium price. I

    • by Anonymous Coward
      Except it's only illegal in the US because collusion is illegal. OPEC isn't subject to our laws.
  • Comparatively, I thought even high-quality memory was cheap compared to other components of a computer, especially since they usually run at higher clock speeds than the processor. That they were price-fixed comes at a bit of a surprise to me.

    What does this mean for RAM prices in the near and far future?

    Will OEMs keep prices where they are now and pocket the difference? Or will they lower prices?

    • Let's be serious. DDR400 means 200MHz.

      Memory is so slow these days, that the cost of an L2 miss for can be as high as 400 cycles. Basically, a load that hits in the L1 can be as fast as 2-3 cycles of latency. If it misses all the way to the main memory, it's ~400cycles. Two orders of magnitude.

      Small is fast; large is slow.

  • by 1evilmonkey (837713) on Friday April 22, 2005 @04:51PM (#12317484)
    Yay so I can use the money I will save on RAM and put it towards high gas prices.
  • It was like RAM was a commodity. I was buying RAM on huge price drops on Pricewatch and selling a few sticks a couple months later when the price ran back up on Ebay. It was great. I wasn't aware that it was just a Korean issue though, I thought some Hong Kong and Taiwan companies were involved.

    Following links have more info:
    http://tinyurl.com/8umy3 [tinyurl.com]
    http://tinyurl.com/b4k7m [tinyurl.com]
    • Re:I remember this (Score:3, Interesting)

      by mikael (484)
      RAM is a commodity [reference.com], much like LCD displays, CPU's, and GPU's.

      By itself, it isn't very useful, but when combined with other systems (desktops, laptops, PDA's, mobile phones, handheld consoles), it becomes a very useful item.

      As with all commodities, the price will always go up whenever demand exceeds supply. And the suppliers will always try to achieve this; either by sophisticated marketing to boost demand (eg. the diamond market, the power generators warning of a shortage of electricity) or by matching re
  • I'm waiting (Score:3, Funny)

    by waldoiverson (608278) on Friday April 22, 2005 @04:51PM (#12317497) Homepage
    *looks at $2.00 per meg PC-133 chips* ... ... ... *waits for class action lawsuit notification*
    • Interesting you mention PC-133 in specific. It was extremely expensive to begin with, but then all the sudden the market tanked and RAM was at an all time low. I think that was back when Hynix was recieving their illegal subsidies from the Korean government and were underselling everyone else. I remember buying 128MB of Micron/Crucial memory for about $35. They posted huge losses and cut thousands of jobs.

      Now DRAM prices seem to have stablized. If the manufacturers haven't learned their lessons by now to k
  • by pr0t0 (216378) on Friday April 22, 2005 @04:53PM (#12317529)
    How much did they make during that time?

    I'm often dissappointed in fines like this when I find out that the execs did a little jail time, paid a fine, but still have 6 Lamborghinis in the garage. It's important to implement fines that are severely punishing...like the people involved would have been WAY better off not pulling this kind of crap. The should be destitute. I can't stomach the wealth accumulated on the backs of the bruised.

    I'm not saying that's what is going on here, I don't know. It just makes me sick when most people involved still come out ahead, and there is maybe one or two sacrificial lambs.
    • Corporations should be subject to potentially having their corporate charter revoked. Theoretically corporations are people -- so why should "they" not be subject to the equivalent of life imprisonment (or the death penalty, depending on the jurisdiction)?
      • Theoretically corporations are people -- so why should "they" not be subject to the equivalent of life imprisonment (or the death penalty, depending on the jurisdiction)?

        The intention is good, but IMHO the Corporate Death Penalty is based on a false assumption - that corporations really are people. They aren't, regardless of the law. Corporations don't have feelings or free will, so putting them to death is no deterrent if all the principals just move on to other opportunities (while the lower level wo

    • How much did they make during that time?

      Hynix: lost $7.5 billion
      Micron: lost $2.8 billion
      Infineon: lost $2 billion
      Elpida: no net profit data available
      Samsung: who knows? They make every dang thing in the world. They don't lose money, but I'd bet that they didn't make any from memory back then.

      Anyway, draw your own conclusions...
  • by Sheepdot (211478)
    $185 bucks says that $185 million will go towards funding DMCA litigation in San Francisco.
  • by ctk76 (531418) on Friday April 22, 2005 @04:58PM (#12317591)
    After joining/initiating price fixing with its competitors and making good profits, you rat out on your competitors without paying the fines.
  • heh (Score:5, Insightful)

    by Renraku (518261) on Friday April 22, 2005 @04:59PM (#12317606) Homepage
    Actually, the price of RAM will probably go up after this so said companies can afford to pay off their fines without reaching into their own pockets.

    When a telephone company gets fined, where does the money come from? Increased prices/fees.

    When an energy company gets fined, where does the money come from? Increased prices/fees.

    When a car maker gets fined, where does the money come from? Increased prices/fees.

    Why do you think this will be any different? They're just going to do it again, and not get caught.
    • Re:heh (Score:3, Insightful)

      by Jeff DeMaagd (2015)
      It depends. Telephone companies are still somewhat regulated in many areas. Same with energy companies. Among those regulations are price regulations.

      If one carmaker gets fined, and they raise their prices, that makes the competitor's cars more attractive.
    • by jafac (1449)
      So what's your solution?

      Just not punish price-fixing?
  • They have agreed, but as we all know, there could be some other conditionalities to be met in the "lawyer language". Besides, I wonder whether there will be a mechanism put in place to prevent this from ever happening again. What those companies will do [down the raod], is to hike the price of chips in some way in order to cover these fines.

    I am sure there is gonna be an individual hired to do precisely this. These companies NEVER lose...after all where else will we get RAM from?

  • You know... (Score:3, Insightful)

    by rootedgimp (523254) on Friday April 22, 2005 @05:12PM (#12317731)
    this stuff happens all the time. its just usually there isnt enough hard evidence to do anything about it. as scary as it sounds, though, in big business nothing is a mistake. i bet you 186 million that that money is going to end up back in the hands of the people that started this price fix to begin with. anyway, maybe im over paranoid when it comes to money. perhaps it has something to do with the fact that the federal reserve isnt owned by the usa, and every president that attempted to change that died under odd circumstances or was assassinated. anyway, nothing to see here, go back to earning your ink'd papers. god help us all.
    • " the fact that the federal reserve isnt owned by the usa, and every president that attempted to change that died under odd circumstances or was assassinated"

      Someone forgot their foil hat today..
      • " the fact that the federal reserve isnt owned by the usa, and every president that attempted to change that died under odd circumstances or was assassinated"

        Someone forgot their foil hat today.

        Why?

        Federal Reserve is not owned by the USA Government (nor is majority owned by US banks). It is, basically, privately owned company (which earns money; well, taxpayers' money).

        You didn't know it?
    • http://www.abs-cbnnews.com/topofthehour.aspx?Stor y Id=3274

      he National Bureau of Investigation (NBI) on Thursday said it has arrested two British nationals with $3 trillion fake US federal bank notes in their possession, DZMM reported.

      NBI Director Reynaldo Wycoco identified the suspects as Paul Edward John Flavell and Sam Beany. The two listed their address as Unit 305 CEO Apartments in Jupiter Street, Makati City.

      The suspects were not physically present during the press conference called by Wycoco at th
  • by Anonymous Coward on Friday April 22, 2005 @05:14PM (#12317759)
    ...will receive a 32MB stick of PC 66 memory.
  • How much profit? (Score:5, Insightful)

    by ehiris (214677) on Friday April 22, 2005 @05:17PM (#12317781) Homepage
    I wonder how much they profited. The fine for the top music industry companies [usatoday.com] was about $143 million but due to price fixing consumers were overcharged $480 million. That's a profit of about $337 million [wikipedia.org].
    • Like $21.65 each.

      CD prices haven't gone down at all, and the music industry is back to claiming piracy & lost sales and suing customers.

      The price fixing lawsuit that they were slapped around with didn't phase them one bit.
  • Cartels (Score:2, Funny)

    by jeff_schiller (877821)
    "This case shows that high-tech price-fixing cartels will not be tolerated" But oil cartels? Bring it on...I'm paying $2.30/gallon out here in the midwest...
  • so we can each get a $2 off coupon for RAM from the offending companies.
  • by grumpyman (849537)
    de Beers has been doing that for years without getting sued.
    • Ahhhh no. Not really. de Beers is a monopoly. While that does require that they behave in certain ways, it makes it practically impossible for them to form a conspiricy to fix prices.

      There is no one to conspire with.

      De Beers keeps the price up not so much by artifically inflating the price (which would be illegal) but by actively choosing not to exploit their diamond mines (of which they own something like 90% in the world) This guarentees smaller supply, and they very cleverly manipulate media to keep de
  • Awesome! (Score:4, Informative)

    by ryanw (131814) on Friday April 22, 2005 @05:57PM (#12318176)
    So now they have a REAL reason to charge more for the memory. Sounds like a solution to benifit the consumers for sure! How much of the $185 million went to lawyers and lawfirms and how much of that is going back to the consumers? $0.18 checks aren't worth crap to the consumer that bought the memory at the 'fixed rate'. Cause in the end, the consumers get nothing back from a suit like this except paying more for the memory in the future because of the impact of the lawsuit. The lawyers make out like a bandit! Why else do imagine these lawsuits exist?
    • so Next time they think about doing it, they will think twice.
      • so Next time they think about doing it, they will think twice.

        Why would they think twice about it? In the end, the consumers pay back the money lost to lawsuits. Doesn't hurt the company in the end.

        When is Apple going to be stiffed with PRICE FIXING? I don't understand exactly what pricefixing is and what is illegal about it, but I do know that gasoline companies all agree on prices for gas all over the nation. Ever notice how the gas price goes up and down the exact same morning across all gass

  • And yet Microsoft (Score:3, Insightful)

    by gillbates (106458) on Friday April 22, 2005 @06:58PM (#12318707) Homepage Journal
    can put others out of business running an illegal monopoly, and get off scott free...

    Something tells me these folks didn't buy the right judges...

  • When I bought a gig PC-133 back in 2000 it cost me nearly $1024

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