Wednesday, May 19th 2010

EU Slaps Chip Vendors with Penalties for Price-Fixing

As many as nine major chip vendors were fined a total of 331 million Euros (US $404.2 million) for participating in illegal price-fixing activities, by the European Union authorities. These include Samsung, Hynix, Nanya, Elpida, Infineon, NEC, Toshiba, Hitachi, and Mitsubishi. A 10th company in this price-fixing cartel was Micron Technology, which escaped the fine for exposing the malpractice to the EU authorities. Of these Samsung was given the single biggest fine of 146 million Euros, followed by Infineon at 57 million Euros. The fines were reduced by 10% because all companies extended cooperation in the investigations.

The price-fixing cartel mostly involved bad trade of DRAM chips, and was active between 1998 and 2002, operating with a network of contacts which secretly exchanged pricing information. They colluded to fix prices of DRAM chips sold to major PC and server manufacturers. Investigations in the scam began in 2002 when Micron blew the whistle on the cartel. "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," said EU's Competition Commissioner, Joaquin Almunia. "As the procedure is applied to new cases it is expected to speed up investigations significantly," he added.Source: BBC News
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46 Comments on EU Slaps Chip Vendors with Penalties for Price-Fixing

#1
Easy Rhino
Linux Advocate
back in 2001-2002 weren't DRAM chips quite cheap?
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#2
human_error
by: Easy Rhino
back in 2001-2002 weren't DRAM chips quite cheap?
that was probably the problem - the prices were getting too cheap so they agreed not to engage in a price war and to have a minimum price they would not charge below.

Price fixing does not always mean keeping the prices really high, it can just be preventing it going so low that you make a loss on sales, but either way it is still illegal.
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#3
NdMk2o1o
iirc I paid £20 for 512mb ddr400 in 2001, not exactly cheap though memory capacity was lower than todays standards so its hard to tell if that was cheap or not, an other thing is around that time hdd's were around £1 per Gb!!! compare that to a 1tb hdd that can be found for £60 today and thats 16p per Gb, though ram prices are crazy high atm :(
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#4
TVman
ddr prices are ~ double what they were year ago,another pricing fix!? who knows :ohwell:
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#5
NdMk2o1o
by: TVman
ddr prices are ~ double what they were year ago,another pricing fix!? who knows :ohwell:
Exactly my thoughts, ok I can understand ddr2 going up as there are less supplies with ddr3 quickly becoming standard though ddr3 shouldnt have doubled in the last year as there is now more demand for it and more and more of it readily available :( I paid £90 for 4gb ram this year, thats ridiculous, last year I could of grabbed the same or equivalent specs wise for half of that price and thats when ddr3 wasnt as widely available :shadedshu
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#6
LAN_deRf_HA
More than double. The same kit that was $40 a year ago is now $100.
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#7
DrPepper
The Doctor is in the house
by: NdMk2o1o
:( I paid £90 for 4gb ram this year, thats ridiculous, last year I could of grabbed the same or equivalent specs wise for half of that price and thats when ddr3 wasnt as widely available :shadedshu
Interesting last year I got 6gb 1600mhz ram for the same price. Prices should be going down or at least the same.
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#8
cadaveca
My name is Dave
prices have gone up due to OEMs(dell, HP, ACER) now also putting DDR3 in thier boxes, whereas when it was cheap, only really some of us, with i7 boxes, got DDR3(plus the odd 775 DDR3 board).

Supply and demand...

What i can say is that I got my 4GB Dominator Gt's for the smae price I paid for my 2GB GSKill HZ($249)
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#9
DrPepper
The Doctor is in the house
by: cadaveca
prices have gone up due to OEMs(dell, HP, ACER) now also putting DDR3 in thier boxes, whereas when it was cheap, only really some of us, with i7 boxes, got DDR3(plus the odd 775 DDR3 board).

Supply and demand...
That only makes sense if they don't have a high enough supply to fill the demand. I'd imagine they do by now.
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#10
cadaveca
My name is Dave
They don't have the supply...that's the issue. with every OEM and thier dog now on the DDR3 bandwagon, these guys need time to move capacity from the older DDR2, and at the same time, we are also seeing them move to smaller processes, so there really isn't alot of capacity for these new IC's...the low-volt stuff(1.35v) just came out a few months ago, and now they've also moved on to 4GB per DIMM...

Prices are a bit high, IMHO, for only select sticks. the actual price per IC hasn't changed much though. It's the DIMM makers that are at fault here, for our purposes, IMHO. We are opaying more, not due to IC costs, but due to DIMM makers not being able to assemble sticks fast enough. Took me a long time to get my second set of GT's...in the end, I got a set from teh same batch as my first, but from the other side of the continent.
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#11
cadaveca
My name is Dave
I hate to double post, but we have the perfect example of OEMs not being asble to keep up with demand; I was posting in a thread earlier today where a pc maker couldn't get enough Corsair sticks, so replaced them with GSKill( in teh UK, if I got he poster's location right). Locally, Corsair sticks are hard to get too...


So obviously, there is some supply issues, on both sides of the pond.

However, as I mentioned, IC pricing hasn't changed much in the past 2 years, and it's the IC makers that are the focus of this "fine".

We really need to seperate how we look at things like this...each and every level of the industry is stuck by different issues. What we pay, isn't the level that is being looked at here...it's not OCZ/GSkill/Kingston/Corsair getting fined...
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#12
dustyshiv
If such kinda thing can happen among companies manufacturing DRAM chips, only time can tell whts happening between AMD/ INTEL, AMD/ NVIDIA. Back in those days, who ever could have dreamed such a thing was happening??
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#13
cadaveca
My name is Dave
this is not the first time mem makers have been in this situation, there's a reason we didn't see many Samsung DDR2 sticks in North America...becuase there was a tariff imposed on thier stuff, due to a judgement on price fixing. Now we are on DDR3, adn the same thing is happening...

This is common practice...even after paying fines, they will still have made a profit any way. Same with LCD panels...why do you think prices are so cheap now for monitors/TVs...price fixing judgements.


EDIT, FYI, after digging into this a bit more, these fines are from 1999-2002...all these companies were already fined for this in the US, as I mention in this post. For something that happened almost 10 years ago, this really is a cash grab by EU.
The cartel, in operation between 1998 and 2002, involved a "network of contacts" who shared secret information. They colluded to set prices for DRAM chips sold to major PC makers and server manufacturers, the commission said.
If they had done this back when the US did, it wouldn't seem so out of place. Maybe thier investigation took longer...possible, I suppose...
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#14
FreedomEclipse
Crazy Dogmatic Bullsh!t!
reminds me of the days I payed £120 for a 2-2-2-5 matching 1gb set of OCZ PC3200 Platinum Rev.2's

did they REALLY need to cost that much?? because I later perchased a Elixer ram PC3200 2Gb Value set that would do something like 480mhz+ on relaxed timings of 3-3-3-8 at almost no increase to voltage for £40. I never could really overclock that OCZ set.

:EDIT:

but its great their cracking down on it now...but its a little too late aint it?? they could have done something when the price fixing scheme was in full swing but they just sat there & watched until now?? shit. 10years just to fine them when they were taking us for a ride.
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#15
AsRock
TPU addict
Funny that no one owes us money like after all we payed for the stuff. Only thing this does is make the prices higher than they were before.
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#16
FreedomEclipse
Crazy Dogmatic Bullsh!t!
by: AsRock
Funny that no one owes us money like after all we payed for the stuff. Only thing this does is make the prices higher than they were before.
QFT

nobody puts the money back into the consumers pocket - the real victims. especially for us Brits....everything is so unbelievably expensive here (=__=)
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#17
cadaveca
My name is Dave
If ya guys think you were screwed, you need to do what Dell et al did...sue the chip makers.

Notice that ATI paid out customers and sent video cards in lieu of payment...for those that actually registered a complaint. Noet that this was also for a "price fixing" suit. I'm sure more than me on this forum got a card...I got cash back from Rockstar for GTA SanAndreas too...

Sit back do nothing, you can only expect nothing. Start making waves, and maybe the boat will rock a bit...


:shadedshu
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#18
Easy Rhino
Linux Advocate
i do not have a problem with companies coming together to keep prices at a steady low price. think about it... a price war would have put a lot of these companies in a financial bind and would have stopped producing the chips all together. that would have increased demand and skyrocketed prices. as a consumer i would rather have low prices than high prices.
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#19
FordGT90Concept
"I go fast!1!11!1!"
by: Easy Rhino
back in 2001-2002 weren't DRAM chips quite cheap?
I don't think so. It seems like PC133 was hella expensive as was DDR and RDRAM. Basically, there was no such thing as cheap RAM back then.


by: cadaveca
Notice that ATI paid out customers and sent video cards in lieu of payment...for those that actually registered a complaint. Noet that this was also for a "price fixing" suit. I'm sure more than me on this forum got a card...I got cash back from Rockstar for GTA SanAndreas too...
That's the result of the FTC or lawsuit on behalf of a group of people effected by the illegal practice. EU only cares about money in their coffers.
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#20
cadaveca
My name is Dave
by: FordGT90Concept
That's the result of the FTC or lawsuit on behalf of a group of people effected by the illegal practice. EU only cares about money in their coffers.
I know, and that is PRECISELY my point.
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#21
Easy Rhino
Linux Advocate
by: FordGT90Concept
I don't think so. It seems like PC133 was hella expensive as was DDR and RDRAM. Basically, there was no such thing as cheap RAM back then.
i remember it differently. these companies had to defend themselves in court to i wonder what their numbers look like. i also wonder if this really had any impact on the market.
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#22
cadaveca
My name is Dave
Well, it was bad enough that many IC makers paid quite a bit to the US, and pre-DDR2, too, so there HAS to be something to this to begin with...
Samsung received the biggest single fine of 146m euros. The second biggest was 57m euros, which was levied on Germany's Infineon.
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#23
tigger
I'm the only one
The ram in my machine is actually worth more secondhand now than what i paid for it new.
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#24
FordGT90Concept
"I go fast!1!11!1!"
Samsung was about the only supplier of RDRAM (might have something to do with them getting the largest fine). I remember 512 MiB (2 x 256 MiB) sticks of RDRAM cost $100.
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#25
cadaveca
My name is Dave
Wasn't it RAMBUS that started all of this though, really?
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