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.

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