Samsung, the world's largest maker of memory chips for computers and other gadgets, will pay a $300 million fine to settle accusations it...
WASHINGTON — Samsung, the world’s largest maker of memory chips for computers and other gadgets, will pay a $300 million fine to settle accusations it secretly conspired with industry rivals to fix prices and cheat customers, federal officials said yesterday.
Samsung’s guilty plea to a felony price-fixing charge caps a three-year investigation by the Justice Department into makers of the chips, a $7.7 billion market in the United States. Two of Samsung’s leading rivals earlier paid fines totaling $345 million and pleaded guilty to involvement in a scheme the government said boosted prices consumers paid for computers between 1999 and 2002.
The Justice Department’s acting antitrust chief, Thomas Barnett, said seven Samsung employees are not legally protected from further prosecution under the plea agreement, an indication they may individually face criminal charges.
“That’s a decision for us to make moving forward,” Barnett said. He added that prosecuting executives in price-fixing cases — not just the companies where they work — is an important deterrent against similar crimes.
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The guilty plea by South Korea-based Samsung Electronics and its U.S. subsidiary, Samsung Semiconductor, was announced at Justice Department headquarters. The court papers are expected to be filed within 30 days in U.S. District Court in San Francisco.
Samsung said in a statement the company “strongly supports fair competition and ethical practices and forbids anti-competitive behavior.” A spokeswoman, Chris Goodhart, declined to identify the seven employees or say whether they still worked for Samsung.
The $300 million penalty is the second-largest criminal antitrust fine ever, behind the $500 million fine by Hoffmann-La Roche in a 1999 vitamins-related case.
Samsung’s top competitor — South Korea’s Hynix — pleaded guilty this year to price-fixing and paid a $185 million fine. Last September, rival Infineon Technologies of Germany agreed to a $160 million fine. Another competitor, Micron Technology of Boise, Idaho, has been cooperating with prosecutors and was not expected to face charges.
The government accused the companies of conspiring in e-mails, telephone calls and face-to-face meetings to fix prices of memory chips between April 1999 and June 2002. The chips are used in digital recorders, personal computers, printers, video recorders, mobile phones and many other electronics.
The government said victims of the price-fixing were Dell, Compaq, Hewlett-Packard, Apple, IBM and Gateway.
The investigation started in 2002, a year after memory-chip prices began to climb even though the high-tech industry was in a tailspin. At the time, the increases were attributed to tight supplies, although then-Dell Chief Executive Michael Dell blamed them on cartellike behavior by chip makers.