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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Samsung to pay $300 million fine for price fixing

Associated Press

WASHINGTON — Samsung, the world’s largest maker of memory chips for computers and other electronic gadgets, has agreed to plea guilty to price fixing and pay a $300 million fine, U.S. officials said Thursday.

The penalty is the second-largest criminal antitrust fine ever and caps a three-year investigation into the largest makers of dynamic random access memory computer chips, a $7.7 billion market in the United States.

The guilty plea to the single felony charge by South Korea-based Samsung Electronics Co. Ltd. and its U.S. subsidiary, Samsung Semiconductor Inc., was to be entered Thursday in U.S. District Court in San Francisco.

The government’s acting antitrust chief, Thomas O. Barnett, said seven Samsung employees were not protected by the guilty plea, an indication they may individually face criminal antitrust charges.

“That’s a decision for us to make moving forward,” Barnett said. He added that prosecuting individuals — not just companies — in price-fixing cases is an important deterrent against similar abuses.

The Justice Department already has secured similar guilty pleas from two other companies and collected more than $345 million in fines.

“Price-fixing threatens our free market system, stifles innovation and robs American consumers of the benefit of competitive prices,” Attorney General Alberto Gonzales said.

A Samsung spokesman declined to comment immediately.

Samsung received grand jury subpoenas in connection with the investigation during 2002, and put aside $100 million late last year to pay potential criminal penalties.

Samsung’s top competitor, Seoul-based Hynix, agreed earlier this year to plead guilty to price fixing and pay a $185 million fine. Last September, rival Infineon Technologies AG of Germany agreed to a $160 million fine. Another competitor, Micron Technology Inc. of Boise, Idaho, has been cooperating with prosecutors and was not expected to face charges.

The government accused the companies of conspiring in e-mails, telephone calls and face-to-face meetings to fix prices of memory chips between April 1999 and June 2002. The chips are used in digital recorders, personal computers, printers, video recorders, mobile phones and many other electronics.