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February 6, 2007

States Obtain $90 Million for Consumers Harmed by Alleged Semiconductor Price-Fixing Conspiracy

Des Moines. Attorney General Tom Miller said Tuesday that Iowa is among a group of states that have reached a $90 million nationwide settlement with Samsung Semiconductor, Inc., and Samsung Electronics Company Ltd., resolving allegations that Samsung illegally fixed prices with other major computer chip manufacturers of Dynamic Random Access Memory (DRAM).

The settlement, which requires court approval, will provide restitution to consumers and certain governmental agencies that paid more for computers, servers and other electronic devices because of alleged price-fixing. Decisions on how the settlement money will be distributed will be made later when continuing litigation against other DRAM manufacturers is resolved.

Samsung also has agreed to strong injunctive relief that will require the company to refrain from conduct that could substantially lessen competition, and Samsung must cooperate with the states in continuing litigation against other companies alleged to have participated in the illegal activity. Samsung admits no violation in the settlement.

The states’ suit arose from a multi-state investigation that began in 2004, following a federal criminal investigation. The investigations exposed a scheme in which several DRAM manufacturers profited at the expense of consumers in the computer and electronics industry. The states’ complaint alleged details of the conspiracy, including an agreement by industry leaders to trim production in order to artificially raise prices.

“The states alleged that consumers and government agencies across the country paid inflated prices for computers and other high-tech products containing DRAM as a result of the alleged illegal activity,” Miller said.

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More information:

The states and private classes continue to pursue their lawsuit in U.S. District Court in San Francisco. The states’ action seeks damages, restitution, civil penalties and injunctive relief for consumers and governmental agencies who paid higher prices for electronics from 1998 to 2002 as a result of alleged price-fixing by at least seven more companies, including Elpida, Hynix, Infineon, Micron, Mosel Vitelic, Nanya and NEC.

According to the states’ complaint, the defendants violated federal and state antitrust laws by coordinating prices they charged for DRAM. Employees of Samsung, Hynix, Infineon, Elpida have pleaded guilty to federal criminal price-fixing charges and collectively have already paid more than $730 million in fines. The states’ case against the remaining defendants seeks restitution for consumers to repay at least some of the harm caused by the conspiracy.

States participating in the lawsuit include AK, AR, AZ, CA, CO, DE, FL, HI, ID, IL, IA, KY, LA, ME, MD, MA, MI, MN, MS, NE, NV, NH, NM, NC, ND, OH, OK, OR, PA, RI, SC, TN, TX, UT, VT, VA, WA, WV, WI, and the Northern Mariana Islands.


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