Infineon, Six Chip Makers Face Price-Fixing Suit by 34 States
July 13 (Bloomberg) -- California and 33 other states plan to file a price-fixing lawsuit seeking ``hundreds of millions of dollars'' from Infineon Technologies AG, Hynix Semiconductor Inc., and five other computer memory-chip makers.
The lawsuit, to be filed tomorrow in San Francisco federal court, claims consumers and state governments overpaid for computers, servers and other electronic products from 1998 to 2002 because the chip makers artificially inflated prices. Samsung Electronics Co., the No. 1 memory-chip maker, won't be sued ``to foster a potential settlement,'', said Tom Dressler, a spokesman for California Attorney General Bill Lockyer.
``The defendants in this case conspired to rig the market for this essential computer product, working together to keep prices artificially high,'' Lockyer said today in a statement, which didn't identify the 33 other states. ``They victimized individual consumers, governmental agencies, schools and taxpayers.''
The lawsuit opens a new chapter of antitrust claims against memory-chip makers, which have been fined $731 million in a four- year-old U.S. probe. The states are seeking reimbursement for the overcharges, which Lockyer estimated at ``hundreds of millions of dollars'' nationwide. Antitrust law allows plaintiffs to seek triple-damages.
The complaint will name Infineon, Hynix and Boise, Idaho- based Micron Technology Inc., the world's second, third and fourth-largest computer memory-chip makers, as well as No. 5 Elpida Memory Inc., No. 6 Nanya Technology Corp., NEC Electronics America Inc. and Mosel Vitelic Inc. Micron is the biggest memory- chip maker in the U.S.
Conspired
Lockyer said that the companies conspired to limit chip supplies and agreed on what to charge customers in an effort to artificially drive up prices.
The lawsuit grew out of a global price fixing conspiracy investigation by the U.S. Justice Department. Suwon, South Korea- based Samsung, Ichon, South Korea-based Hynix, Neubiberg, Germany-based Infineon, Tokyo-based Elpida and 12 individuals have pleaded guilty and paid $731 million in fines in that probe.
U.S. prosecutors have said the leading victims of the conspiracy include computer makers such as Dell Inc., Hewlett- Packard Co. and International Business Machines Corp., which use dynamic random access memory, or DRAM, chips, in their products. U.S. sales of DRAM chips total $5 billion annually, Lockyer said.
Samsung, Hynix, Micron and other chip companies face similar claims in a civil lawsuit pending in San Francisco federal court on behalf of companies representing computer-repair shops and manufacturers that purchased chips from 1999 to 2002.
Samsung, Hynix and Micron agreed to pay $160 million in May to resolve claims in those suits.
To contact the reporter on this story:
Karen Gullo in San Francisco at kgullo@bloomberg.net.
Last Updated: July 13, 2006 13:07 EDT
