February 7, 2007 in Business

Samsung will pay $90 million to settle price-fixing suit

Associated Press The Spokesman-Review
 

Washington and Idaho were among the states that participated in the lawsuit.

ALBANY, N.Y. — Samsung Electronics Co., the world’s largest memory chip maker, agreed to pay $90 million to settle a lawsuit charging the company and others with price-fixing, New York Attorney General Andrew Cuomo said Tuesday.

The suit, filed in July, claimed Korean-based Samsung and numerous other companies made secret arrangements to raise the prices of dynamic random access memory, or DRAM, chips. The memory chips are the most commonly used product for storing and retrieving information in computers and electronic devices.

About $80 million of the settlement will go to consumers nationwide while $10 million will cover losses suffered by states and local governments, Cuomo’s office said.

Washington and Idaho were among the states that participated in the lawsuit.

The settlement, which also includes numerous private class-action suits, is subject to approval in federal court in San Francisco. New York, California and Illinois were the lead plaintiffs in the case.

The settlement “puts the DRAM antitrust matter behind us,” said Chris Goodhart, a spokeswoman for Samsung, a top producer of flat-screen televisions, mobile phones, MP3 players and laptop computers. “Samsung is strongly committed to legal and ethical business practices and is moving forward with its aggressive compliance program.”

The lawsuit was one of several filed following a U.S. Justice Department investigation that began in 2002 into whether computer chip companies conspired to manipulate the number of DRAM chips released to market in a scheme to inflate prices. The investigation resulted in more than $730 million in fines and guilty pleas from four companies — Samsung, Elpida Memory Inc., Infineon Technologies AG and Hynix Semiconductor Inc.

In December, Young Hwan Park — president of Samsung Semiconductor Inc., the company’s San Jose-based U.S. subsidiary — agreed to plead guilty and serve 10 months in prison for his role in the global price-fixing scheme. He was the fifth Samsung executive to agree to a prison sentence in the federal case.

Companies such as Dell Inc., Hewlett-Packard Co., Apple Computer Inc., International Business Machines Corp. and Gateway Inc. had to raise PC prices or reduce the amount of memory installed on their systems to compensate for the higher costs, prosecutors said.

Global sales of DRAM reached about $24.8 billion in 2005, according to market researcher iSuppli Corp.


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