AG Coakley Announces Settlement with Leading Computer Chip Manufacturers for Price-Fixing
Massachusetts Consumers Harmed by Inflated Prices of Computer Memory Chips
The manufacturers involved in the settlement are: Infineon Technologies AG and its domestic subsidiary, Infineon Technologies North America Corp.; Hynix Semiconductor, Inc. and its domestic subsidiary, Hynix Semiconductor America, Inc.; Micron Technology, Inc. and Micron Semiconductor Products, Inc.; Mosel Vitelic Inc. and its domestic subsidiary Mosel Vitelic Corp.; Elpida Memory, Inc. and its domestic subsidiary, Elpida Memory (USA) Inc.; and NEC Electronics America, Inc., presently known as Renesas Electronics America ("NEC"). The domestic subsidiaries of foreign corporations sold and distributed DRAM chips in the United States.
"Consumers have a right to a competitive marketplace, and today's settlement is another step toward ensuring that manufacturers are held accountable when they choose to cheat their customers rather than to compete fairly for their business," AG Coakley said.
Massachusetts and 32 other states filed a lawsuit in U.S. District Court for the Northern District of California in San Francisco in 2006, where private class action lawsuits have been consolidated before a federal judge. The states sought damages, civil penalties and other relief on behalf of consumers and government purchasers who paid inflated prices for computers and other electronics as a result of the conspiracy among at least seven manufacturers of DRAM.
The states' suit is a result of a coordinated, multi-state investigation that began in 2004, as well as a federal investigation that exposed a scheme where DRAM manufacturers profited at the expense of consumers. The lawsuit stemmed from a criminal antitrust case brought by the U.S. Department of Justice (DOJ) against what officials have called "one of the largest cartels ever discovered." After the DOJ launched its investigation in June 2002, Micron agreed to cooperate with investigators in exchange for amnesty from federal criminal charges. Several defendants and twelve individuals have since pleaded guilty to criminal price-fixing and collectively paid more than $730 million in fines.
The states' complaint lays out details of the conspiracy, including an agreement by industry leaders to fix prices and to reduce supply of DRAM by lowering production in order to artificially raise prices. The defendants' unlawful conduct, the complaint alleges, harmed computer makers and buyers of computers because they were unable to purchase DRAM or DRAM-containing products at competitive prices and they paid more for such products than they would have paid "in a free and open competitive market."
Besides Massachusetts, states participating in the settlement include Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wisconsin.
This case was handled by Assistant Attorney General Mary Freeley of Attorney General Martha Coakley's Antitrust Division, with the assistance of paralegal Keith McWhorter.