by Anton Shilov
05/19/2010 | 12:24 PM
The European Commission on Wednesday said that it had fined many makers of dynamic random access memory (DRAM) on $420 million (€331 million) for price-fixing practices in 1998 – 2002 timeframe. The vast majority of companies, who created a cartel, no longer produce memory. Moreover, considering that all the practices ended eight years ago, it does not look like the decision will have any effect on any companies nowadays.
The fine totalling €331 million ($420 million) includes a reduction of 10% for the companies' acknowledgement of the facts. The addressees of the decision are: Micron, Samsung, Hynix, Infineon, NEC, Hitachi, Mitsubishi, Toshiba, Elpida and Nanya. Micron, however, was not fined because it revealed the existence of the cartel to the commission back in 2002.
Between December 2003 and February 2006, Infineon, Hynix, Samsung, Elpida and NEC also applied for leniency under the EU's Leniency Notice. The Commission took account of their cooperation in the investigation and granted a reduction of respectively 45% (Infineon), 27% (Hynix) and 18% (Samsung, Elpida, NEC). Due to mitigating circumstances, the fine of Hynix was further reduced by 5% for Hynix and by 10% for Toshiba and Mitsubishi. Finally, all companies benefitted of a reduction of 10% for settling the case with the commission.
The overall cartel was in operation between 1 July 1998 and 15 June 2002. It involved a network of contacts and sharing of secret information, mostly on a bilateral basis, through which they coordinated the price levels and quotations for DRAMs, sold to major PC or server original equipment manufacturers (OEMs) in the European Economic Area (EEA).
"This first settlement decision is another milestone in the commission's anti-cartel enforcement. By acknowledging their participation in a cartel the companies have allowed the commission to bring this long-running investigation to a close and to free up resources to investigate other suspected cartels. As the procedure is applied to new cases it is expected to speed up investigations significantly, said the vice president of EC and competition commissioner Joaquín Almunia.
All the companies are non-European except for one (Infineon, Germany), but they sell their products in the EEA and, therefore, must also abide by EU law, in this case Art 101 of the EU Treaty, which bans practices restrictive of competition . The case was also investigated in the United States.
The fines take into account the sales of the companies involved in the EEA, the very serious nature of the infringement and its geographical scope.