TALLAHASSEE – LAWFUEL – Press Release Service – Attorney General Charlie Crist announced that tomorrow he will sue seven foreign and domestic firms that manufacture computer memory chips, as well as their U.S. subsidiaries, alleging the firms conspired to fix the prices of dynamic random access memory (DRAM) chips.
Crist and 33 other state attorneys general will file the case, claiming multi-million dollar damages to private citizens and governmental agencies that purchased DRAM chips and equipment that contained the chips over a four-year period.
Companies named as defendants include Micron Technology, Inc.; Infineon Technologies AG; Hynix Semiconductor, Inc.; Elpida Memory, Inc.; Mosel Vitelic Corp.; Nanya Technology Corp. and NEC Electronics America, Inc. The largest four of the DRAM manufacturers and their U.S. subsidiaries control roughly 70 percent of the U.S. market, which in 2003 was approximately $5 billion of the $17 billion in worldwide sales.
The main allegations in the complaint focus on the defendants’
conspiracy to fix DRAM chip prices from 1998 through 2002. The price fixing allowed them to artificially restrain supply, allocate the production and markets for DRAM chips among themselves and rig bids for DRAM chip contracts. DRAM chips are semiconductors that hold temporary instructions and data, making the data available for quick access when computers and other electronic devices are in use.
“These companies conspired to rig the market, working together to keep prices artificially high,” said Crist. “In the process, they hurt individual consumers, government agencies and taxpayers.”
According to the states’ complaint, the firms began to coordinate prices as early as 1998, when there was an excess of DRAM chips in the market. As a result, computer manufacturers paid more for DRAM than they would have paid “in a free and competitive market.” The affected computer manufacturers included Apple Computer, Inc., Compaq Computer Corp., Dell, Inc., Gateway, Inc., Hewlett-Packard Co., and IBM. The computer manufacturers passed along these overcharges to Florida consumers and Florida public entity computer purchasers.
The case follows a federal antitrust investigation by the US Department of Justice. After the DOJ launched its investigation in June 2002, Micron agreed to cooperate with investigators in exchange for amnesty from federal criminal charges. Four firms, as well as 12 corporate individuals, pled guilty to criminal price-fixing and paid more than $730 million in fines.
The complaint, to be filed in U.S. District Court for the Northern District of California, asks the court to order the defendants to pay three times the amount of damages for which the court finds them liable. Florida is one of the lead states in the case.