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© tom schmucker / dreamstime.com Components | January 24, 2012

AG reaches USD 175'000 settlement with DRAM makers

The settlement was reached with Elpida Memory, Inc. (Japan); Hynix Semiconductor Inc. (South Korea); Infineon Technologies AG (Germany) and Micron Technology, Inc. (USA).
Attorney General George Jepsen announced a USD 175'000 settlement with four manufacturers of dynamic random access memory (DRAM), resolving state claims that they conspired with one another to illegally fix and artificially inflate prices in violation of the Connecticut Antitrust Act.

Under terms of the settlement, the companies did not admit liability, but agreed to pay the State USD 43'750 each by March 31, 2012 to resolve the state’s claims.

Micron, Hynix and Infineon are three of the four largest DRAM manufacturers in the world and together with Samsung Electronics Company Ltd., controlled approximately 70% of DRAM sales in the United States between 1998 and 2002, when the conspiracy to fix prices is alleged, the press release from the Attorney General's office.

Manufacturers of computers, printers and networking equipment purchase DRAM either from the manufacturers or from wholesale distributors who have purchased DRAM from manufacturers. An estimated 75 to 80 percent of DRAM memory is sold through this “contract” market to manufacturers of computer equipment and other memory-equipped devices.

The Attorney General alleged, as part of his investigation, that overcharges paid by these manufacturers and distributors for DRAM were likely passed on to consumers directly in the form of higher prices for computers, printers, networking equipment and other electronic devices.

The DRAM manufacturers were charged with coordinating prices they charged to contract and other customers and with reducing supply in order to artificially raise prices.

In June, 2002, the U.S. Department of Justice launched a criminal investigation. To date, four manufacturers, Samsung, Hynix, Infineon and Elpida, and 12 individuals have pleaded guilty to criminal price fixing as a result of the investigation and have paid fines in excess of USD 730 million. Micron also admitted its role in the conspiracy and received amnesty from the DOJ for cooperating with the investigation.

Connecticut settled a similar civil complaint against Samsung and Winbond Electronics Corp. in 2007 as part of a larger multistate group of Attorneys General and is still awaiting distribution of its share of the states’ USD 10 million settlement. Private class-action lawsuits have also been resolved with Samsung, Winbond, Elpida, Hynix, Infineon, Micron and others, providing restitution to consumers.

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