Samsung admits to price-fixing; pays £171m fine

Samsung admits to price-fixing; pays £171m fine

	Published : Fri, 14 Oct 2005 16:05 By : Andrew Stead Print this Story

WASHINGTON: Samsung Electronics Co. Ltd., the world’s largest manufacturer of memory chips, yesterday agreed to pay a $300m (£171m) fine to the US Justice Department. The company pleaded guilty to charges that it conspired with other chip makers to drive up the prices of memory chips that they supplied to computer and server manufacturers.

As part of the plea agreement, the South Korean company has also agreed to cooperate in the ongoing investigations whereby individual Samsung employees could be later implicated. Seven of their employees are not protected under the plea agreement and are likely to face criminal charges in the coming mnonths. The $300m fine is the second largest in the history of criminal anti-trust fine paid in the US.

Guilty pleas were obtained earlier from two other leading chip makers Hynix Semiconductor Inc., also of South Korea and Infineon AG of Germany. These companies manufacture the DRAM (Dynamic Random Access Memory) chips - a key component in computers, servers, game consoles, cell phones and cameras – products that are widely used in the US. These two companies had pleaded guilty and paid antitrust fines of $185m (£106m) and $160m (£91m) respectively.

The US Department’s antitrust division’s acting chief Thomas Barnett said that American consumers were harmed by the price fixing. Between April 1999 and June 2002 consumers had to pay more for computers and servers as a result of this price manipulation by these companies. A fourth player was also involved – Idaho-based Micron Technology; but this company does not expect to face charges because they cooperated with the prosecutors.

Samsung’s admission of guilt and fine ends a three-year-long investigation by the Justice Department.

The company has issued a statement claiming that it “strongly supports fair competition and ethical practices and forbids anti-competitive behaviour” and that the charges against it have been “fully resolved”.