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Samsung to Pay $90 Million in Price-Fixing Lawsuit [By Kenneth Davis] Samsung Electronics Co., the world’s largest memory-chip maker, has agreed to pay $90 million to settle a lawsuit filed by a coalition of state attorneys general who say that it used illegal price-fixing tactics to drive up the cost of computer memory chips.

The suit, filed in July, claimed that Samsung

containing DRAM chips, the prices of which

Inc., had to raise PC prices or reduce the

and numerous other companies made secret

were illegally set by Samsung and other

amounts of memory installed on their

arrangements to raise the prices of dynamic

major chip manufacturers.

systems on account of the higher costs, prosecutors said.

random access memory (DRAM) chips. The memory chips are the most commonly

About $80 million of the settlement will go

used products for storing and retrieving

to consumers nationwide, while $10 million

Cuomo said the case is continuing against

information in computers and electronic

will cover losses suffered by state and local

Infineon, Elpida, and Hynix as well as Micron

devices.

governments, Cuomo’s office said.

Technology, Inc., Mosel Vitelic Corp., Nanya

The complaint alleged that during a roughly

The settlement, which also includes

four-year period, the conspirators restrained

numerous private class-action suits, is

The settlement “puts the DRAM antitrust

competition for DRAM chips by exchanging

subject to approval in federal court in San

matter behind us,” said Chris Goodhart,

price and other confidential competitive

Francisco. New York, California, and Illinois

a spokesman for Samsung. “Samsung is

information, thereby inflating prices. The

were the lead plaintiffs in the case.

strongly committed to legal and ethical

Technology Corp., and NEC Electronics, Inc.

business practices and is moving forward

illegal activity continued until the U.S. Department of Justice began a criminal

The lawsuit was one of several filed

price-fixing investigation in June of 2002.

following a U.S. Justice Department

with its aggressive compliance program.”

investigation, which began in 2002, into

Cuomo said the state’s specific share of the

Samsung, which is based in Korea, has

whether computer-chip companies

settlement will be determined in the future.

also agreed to assist the states with

conspired to manipulate the number of

resolving price-fixing charges against other

DRAM chips released to market in a scheme

defendants named in the suit, New York

to inflate prices. The investigation resulted

Attorney General Andrew Cuomo said in a

in more than $730 million in fines and guilty

Samsung Electronics

statement last week.

pleas from four companies: Samsung,

www.samsung.com

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Elpida Memory, Inc., Infineon Technologies “Consumers, states, and localities were

AG, and Hynix Semiconductor, Inc.

victims of an international conspiracy that

Elpida Memory www.elpida.com/en/index.html

artificially raised the price of memory chips,”

In December, Young Hwan Park-President of

he said, “and thus illegally boosted the

Samsung Semiconductor, Inc., the company’s

Infineon Technologies AG

price of computers and popular high-tech

San Jose-based U.S. subsidiary-agreed to

www.infineon.com/cgi-bin/ifx/portal/ep/

products. This settlement is a major step in

plead guilty and serve 10 months in prison

home.do?tabId=0

recovering the overcharges that Samsung

for his role in the global price-fixing scheme.

and its co-conspirators illegally foisted on

He was the fifth Samsung executive to agree

consumers and taxpayers.”

to a prison sentence in the federal case.

The settlement covers consumers and

Companies such as Dell, Inc., Hewlett-

state and local governments nationwide

Packard Co., Apple, Inc., International

that overpaid on purchases of equipment

Business Machines Corp., and Gateway,

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Samsung to Pay $90 Million in Price-Fixing Lawsuit