EU fines 10 chip companies €331 million for cartel

The European Union has today fined 10 chip makers a total of €331 million ($403 million) for price-fixing.

The EU had been investigating these companies for rigging the DRAM market between 1998 and 2002 in what was considered a substantial price cartel.

The companies include South Korea’s Samsung, which received the biggest fine of €145 million ($177 million). Another South Korean firm, Hynix, was fined €51.5 million ($63 million).

A number of Japanese firms were part of the cartel. Hitachi was fined €20.4 million, while Toshiba and Mitsubishi received fines of €17.6 million ($21.6 million) and €16.6 million ($20.4 million) respectively. NEC was fined €10 million ($12.3 million), while Nanya received the lowest fine of 1.8 million. Extra fines were given to joint deals between Ellpida, NEC, and Hitachi, which combined added another €10 million ($12.3 million).

There was only one European company in the mix, Germany’s Infineon, which received a €56.7 million ($69.8 million) fine.

American firm Micron escaped a fine by blowing the whistle on the cartel to the European Union in the first place.

This was the first case where companies accused of price fixing co-operated with the EU, and so the fines were reduced by 10 percent due to saved money and time in the investigation.  Some of the companies also received an additional 18 to 45 percent off their fines as part of a leniency measure, which shows that the total fines would have been substantially higher. The Commission said the 10 companies “clearly and unequivocally acknowledged their respective liability”.

“This first settlement decision is another milestone in the Commission’s anti-cartel enforcement. By acknowledging their participation in a cartel the companies have allowed the Commission to bring this long-running investigation to a close and to free up resources to investigate other suspected cartels. As the procedure is applied to new cases it is expected to speed up investigations significantly,” said Commission Vice President and Competition Commissioner Joaquín Almunia.

TechEye previously covered EU investigations in this area back in February when the fines were first rumoured. Yesterday we announced that the EU had stepped up its plans to bring the matter to a close. Today the fines are even higher than anticipated, even with the substantial reductions the firms received for cooperation.

In many ways the reductions were probably a lot larger than necessary, considering they all still participated in illegal activity. Micron got off scot-free, which isn’t really fair to the others, even if it did rat them all out. The massive 55 percent reduction in Infineon’s fine could be seen as a little biased, considering the place Germany has within the European Union.

Regardless of what we might think about the extent of the fines, today brings to a close a long-standing case that has tarnished the names of some of the biggest companies in the DRAM business.