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The Honolulu Advertiser
Posted on: Friday, October 14, 2005

Samsung to pay $300 million fine

By Jayne O'Donnell
USA Today

Samsung, the world's largest maker of computer memory chips, pleaded guilty to criminal price fixing and agreed to pay a $300 million fine, the Justice Department announced yesterday.

Justice says South Korea-based Samsung Electronics and its U.S. subsidiary, Samsung Semiconductor, were leaders in an international conspiracy to fix the prices in the market for dynamic random access memory. DRAM provides high-speed storage and retrieval of electronic information for computers, phones and other electronics.

Justice officials obtained e-mails that confirmed price fixing occurred in phone calls and meetings.

Justice antitrust chief Thomas Barnett said the price fixing forced consumers to pay more for products that use DRAM. He noted both Dell and Apple raised prices for their computers during the period of the conspiracy and cited the increasing price of DRAM as the reason. Some companies also cut the amount of DRAM in their products.

Samsung is the third of the four major chipmakers to plead guilty in the conspiracy. Infineon Technology and Hynix Semiconductor pleaded guilty in the past 12 months and together paid nearly $350 million in fines. Micron Technology was the first to cooperate with Justice officials and received amnesty from prosecution.

Former Federal Trade Commission antitrust chief Molly Boast says Samsung was in a tough spot: "When you're the last man standing, you get circled by the wagons of the co-conspirators."

Barnett said seven Samsung executives could still face prosecution. Four Infineon executives have served prison time.