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RealTime IT News

Samsung Pleads Guilty to Price Fixing

Samsung officially entered its guilty plea to global price-fixing charges yesterday and agreed to pay a $300 million fine, the second-largest criminal antitrust fine in United States history.

Wednesday's court appearance in San Francisco follows an October plea deal by the Korean electronics giant that it and other dynamic random access memory (DRAM) chipmakers conspired to fix prices from 1999 to 2002.

In a statement, Samsung said there had been no changes in the October deal with the DoJ and that the formal entry of a guilty plea "represents the final resolution of the federal DRAM investigation for Samsung."

While the company has concluded its legal battle with the DoJ, individual Samsung officials still might face charges. In October the DoJ said seven Samsung officials had been "carved out" of the plea deal.

The DoJ noted that "punishment and deterrence" of individuals is also an important part of enforcing antitrust laws.

According to the one-count felony charge, Samsung and its U.S. subsidiary, Samsumg semiconductor, conspired with Korean rival Hynix, German chipmaker Infineon and Idaho-based Micron to fix the prices of DRAM chips sold to Dell , Compaq, HP , Apple Computer , IBM and Gateway.

The DoJ, in its three-year investigation, charged that Samsung carried out the conspiracy by participating in a series of meetings with competitors to discuss the prices to charge to certain customers.

In addition, the DoJ said Samsung issued price quotations in accordance with the secret price-fixing agreement and exchanged information on sales of DRAM chips for the purpose of monitoring and enforcing the scheme.

Infineon and Hynix have already accepted guilty pleas in the investigation. In September 2004, Infineon paid a $160 million fine and Hynix accepted a $185 million fine.

Micron avoided a criminal fine by agreeing to participate in the DoJ's Corporate Leniency Policy. The deal provides that, in exchange for Micron's complete cooperation in the still on-going investigation, Micron will not be subject to prosecution, fines or other penalties.

The DRAM price-fixing probe first came to light in December when Alfred Censullo, a regional sales manager for Micron, was charged with obstruction of justice.

On Jan. 21, Censullo pleaded guilty and admitted to having withheld and altered documents requested by a grand jury subpoena. Censullo is scheduled to be sentenced later this year.

DRAM is the most commonly used semiconductor memory product, providing high-speed storage and retrieval of electronic information for a wide variety of computer, telecommunication, and consumer electronic products.

It's used in personal computers, laptops, workstations, servers, printers, hard-disk drives, PDAs, modems, mobile phones, telecommunications hubs and routers, digital cameras, video recorders and televisions, digital set-top boxes, game consoles, and MP3 digital music players.