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The Almighty Buck United States Hardware

DRAM Price Fixing Investigations 246

An anonymous reader writes "A few days ago after FTC antitrust charges against Rambus were thrown out, the U.S. Department of Justice and EU have both begun probes against the 4 largest memory makers in accusation of price fixing during 2001/2002. News.com.com has information regarding the pending EU investigation. Anandtech and Silcon.com both have primers on the U.S. investigation. If you thought you paid too much for RAM in 2002, chances are you may have been more right than you originally thought."
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DRAM Price Fixing Investigations

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  • by numbski ( 515011 ) * <[numbski] [at] [hksilver.net]> on Wednesday March 03, 2004 @12:11PM (#8452454) Homepage Journal
    I don't like paying high prices any more than anyone else, however I have to wonder...

    Let's say I have a monopoly on widgets, or myself and my compeptitors agree to keep the price of widgets artificially high.

    At what point are we no longer allowed to sell our widgets at whatever price we see fit? When do we cross over into breaking the law for price fixing?
    • by thelasttemptation ( 703311 ) on Wednesday March 03, 2004 @12:12PM (#8452466) Journal
      myself and my compeptitors agree to keep the price of widgets artificially high.

      That is where you cross the line
      • by numbski ( 515011 ) * <[numbski] [at] [hksilver.net]> on Wednesday March 03, 2004 @12:14PM (#8452494) Homepage Journal
        So I can go sue Gillette for price fixing on razor blade refills?

        Or the printer manufacturers for price fixing on toner cartriges?

        You see what I'm getting at? When is it illegal?
        • by hc00jw ( 655349 ) on Wednesday March 03, 2004 @12:18PM (#8452550)

          When you agree with another company to both keep the prices high. This stops one of the companies in the agreement from undercutting the other to achieve more sells, and keeps the profit margins for both in the agreement (artificially) high.

          What you choose to do within your own company (razors, cartridges) is entirely up to you...

          • by Shakrai ( 717556 ) * on Wednesday March 03, 2004 @12:23PM (#8452597) Journal
            What you choose to do within your own company (razors, cartridges) is entirely up to you...

            Expect in those cases you have specifically designed a product that nobody else can make because if they do make it you'll sue them for copyright violation and/or DCMA violations. You don't have any motivation to lower your prices if nobody else has any motivation to make cartridges for your particular line of razors or printers -- mainly because they all have their own lines. If a third-party tries to make them you'll just sue them out of existence.

            This might not be illegal per say but it's just as bad imho. My ass it costs $35 to make a 15ml blank ink cartridge or $10 to make eight replacement cartridges for my Mach Three Turbo.

            • by hc00jw ( 655349 ) on Wednesday March 03, 2004 @12:27PM (#8452650)
              Expect in those cases you have specifically designed a product that nobody else can make because if they do make it you'll sue them for copyright violation and/or DCMA violations.

              Then that's a monopoly on that market... Which isn't in and of itself illegal. Prices couldn't be fixed in this case, because by definition, more than one party is required to fix the prices!

              • by jdifool ( 678774 ) on Wednesday March 03, 2004 @01:14PM (#8453080) Homepage Journal
                because by definition, more than one party is required to fix the prices!

                If I remember my economics correctly, this is not true.

                The competition between various economic entities just lower the prices, until reaching in perfect competition the cost of the last unit you will produce (marginal cost). But a monopoly can just fix the price, then swallowing a part of the customer saving, and wasting a part of the overall income (because fixing the price higher is just taking away some money the customer would have saved otherwise, and because raising the price automatically lower the quantities sold, thus triggering what has been called the Dead Weight Loss). It's really hard, actually, to determine how a price is fixed. From a neo-classissist point of view, which is probably one of the wrongest one, but probably the less disturbing one too, it is the value of how much work you put to produce that unit (FIXME if I'm wrong).

                So, indeed, competition is good for pricing, but monopolies and oligopolies (?) are present, and sometimes justified when they are selling public goods with strong scale savings, in economic sectors that require huge investments (plane construction, water, electricity, etc.).

                Monopoly isn't, as far as I know, forbidden in itself. This is preventing other companies from entering your market that is strictly forbidden (such as lowering the price so that new companies just can't bear the investment costs at such rates, or fusionning, or agreeing to keep prices high, or...)

                And the original question is well valid, because when examining the legislations, you just notice that public goods monopolies aside, trials were intented when companies infringed on the very interest of the government, and when the government *could* have a chance to make those suits become effective.

                Just to add my 0.002$, didn't you wonder why you just can't know how much you will pay your plane ticket, depending on when you buy it, from where (internet, phone, cashier) you buy it, and from which social class you belong ? It's just because those companies make their best to make you pay the max price for your ticket. Some very precise microeconomics studies are made to understand how much you are ready to pay for this seat on this plane. And this why, when you discuss, you can find people next seat who paid 30-50% more than you. For just the same crappy food, and tight seat...

                This is the power of business ! :)

                My economics english is bad, I know it. I never used such terms. Sorry...

                Regards,
                jdif

            • by tsunamifirestorm ( 729508 ) on Wednesday March 03, 2004 @12:31PM (#8452685) Homepage
              companies are given patents or copyrights for products that involve huge costs to develop. If it wasn't for copyrights, these companies would not make the initial investment because it would be significantly harder to earn back the cost if everyone could just copy your product.
              • by Anonymous Coward
                So to apply this to the printer cartridge example, the company designs and manufactures printer cartridges in order to recover the cost of designing and manufacturing a printer cartridge? Thats circular logic, if they created a standard printer cartridge that worked across all brands of similar printers they wouldn't need to design new cartridges and there would be a competive market manufacturing them, something which the companies will strive to avoid where possible, hence the current system. From a bus
              • slight flaw... (Score:4, Insightful)

                I see a problem with this:
                companies are given patents or copyrights for products that involve huge costs to develop.
                I'm gonna have to disagree with this...at least for the copyright part.

                A creator is granted copyright on something the moment that it is created regardless of whether the creator is a company or an individual or whether it took lots of money/effort or almost none to create.

                Copyright is granted to give the creator a chance to make money from a creation, but the lack of such "return on investment" does not necessarily stifle creation..."Art for art's sake" and all that...

                A bit more to the topic at hand, it does sometimes seem quite wrong that a copyright/patent holder can simultaneously price gouge the customer and prevent others from sometimes even mimicking the product and sell it at a lower price...I can understand patents on products that are quite expensive to develop, but as the grand-parent post said, razor refills and ink cartridges?...c'mon.

                Actually...I guess I am somewhat split on the topic. On the one hand, as a creator (photographs and sometimes music) I can understand the desire to control how a creation is used, but on the other hand, as a consumer I would really like a cheaper product. There must be some kind of balance in there, right? Or must everyone be a profiteering glutton?

              • wrongo (Score:3, Informative)

                by gosand ( 234100 )
                companies are given patents or copyrights for products that involve huge costs to develop. If it wasn't for copyrights, these companies would not make the initial investment because it would be significantly harder to earn back the cost if everyone could just copy your product.

                Wrongo. They are given patents because they apply for them, regardless of what it costs to make said product. Even if there IS no product. Or if it is just an idea.

                Copyrights are something inherent, you don't have to be assigned


              • companies are given patents or copyrights for products that involve huge costs to develop. If it wasn't for copyrights, these companies would not make the initial investment because it would be significantly harder to earn back the cost if everyone could just copy your product.

                And yet it is still not clear from a quantative standpoint exactly how much of a term of exclusivity is optimal for patent protection and for copyright.

                You're right: if the term is too short or non-existent, you'll get less new pr

              • by microbox ( 704317 ) on Wednesday March 03, 2004 @01:48PM (#8453507)
                We all understand why patents are necessary... so you're 100% correect but there's a big problem with the law

                If you don't believe me, then look at the profits HP makes on selling printer refills compared to _all_ of it's other business wings combined. (over half the total revenue). The fact that all printer manufactors engage in the same policy can be regarded as a new way around the price fixing problem.

                Lets face it, the industry is deliberately vendor locking their customers and then charging ridiculous prices. Mum and Dad get sold on a wonderful printer that costs only $150, but then sigh in resignation when the salesman tells them that _all_ the ink cartridges are very expensive.

                So they get around price fixing charges by all producing different (but functionally identical) components and over charging for them. Seems like the price fixing laws need to be fixed.
                • "So they get around price fixing charges by all producing different (but functionally identical) components and over charging for them. Seems like the price fixing laws need to be fixed."

                  Companies shouldn't be punished for poor consumer choices. A customer who buys an ink jet printer should know that ink cartridges are expensive. There is an option to buy a laser printer, which has a higher initial price, but longer lasting cartridges. Quit micro-legislating businesses. Instead, get consumers to make more
            • you have specifically designed a product that nobody else can make

              While nobody else can make "Gillete Ultra Mach3 Turbo Platinum Edition refil blades", many other companies can and do make razor blades, not to mention a number of companies making electric razors. This effectively caps what Gillette can charge for its refils, there is some premium folks will pay for what they perceive brands name quality and superior product is worth, after which they will opt for the Schick Quattro, or maybe the Safeway d

            • My ass it costs $35 to make a 15ml blank ink cartridge or $10 to make eight replacement cartridges for my Mach Three Turbo.

              Soetimes you're caught in a monopoly, and sometimes you aren't. For example, if you go with the leading edge razors, they seem to have some legal protection in the design of their replacement blades. This would be supported by the fact that they usually release 2 blade types for each handle (usually adding a lubricating strip in the second generation replacement). If you buy the ne
        • by thelasttemptation ( 703311 ) on Wednesday March 03, 2004 @12:19PM (#8452562) Journal
          Lets say there is a wendys and a burger king in the mall, bout 4 stores down from each other
          They are allowed to set the prices as they wish, and hence get into price wars from time to time
          This is all fine and dandy, until the two managers get together and say, 'You know what, if we agree to keep our prices at $2.00 per burger, we both will make more money.' At that point it's illegal.

          Gillette is not going with razorx and making deals nor printer manufactures.

          understand?
          • by LostCluster ( 625375 ) * on Wednesday March 03, 2004 @12:51PM (#8452862)
            This is also why airline prices move in some strange waves.

            When there's going to be a price increase, one airline has to announce its increase to the world, they can't tell the competition first. Now, for a few hour, that airline is $20 higher than everybody flying the same route... who's going to buy tickets that route from that airline? Nobody. The ball is now in the court of all of the other airlines that fly that route... if they agree it's time for a price increase, they'll move their prices up to match. However, if a major player disagrees, they'll keep their prices where they are, and eventually everybody who raised their prices will realize this isn't going to stick, and the company that originally stated the fare hike will retract it.

            Fare cuts move the same way. Once somebody announces a cut, everybody else has to either match it or wait for the airline who made the cut to get locked out of the market by filling up their planes.

            That's how fair play happens without collusion. Those in charge of the prices have to guess what they other guys are going to do in the future, but once it's public information, everybody can use that info.
            • Actually, price-fixing and collaboration happens fairly often in the gas industry... it's just not caught/deal-with as often. However, the concept of price-fixing Vs price-ways happens quite often at the pumps.

              Locally, we had some of the cheapest gas in probably the entire province (Canada). Longtime gas-stations kept trying to raise the price, bumping to the 70-80c range. However, two of the newer stations in town - both attached to grocery outlets - consistently stayed 8-10c+ under the competetion.

              Lea
              • The "new station in town" will usually operate at a loss for its first few weeks to establish themselves. Selling below cost is legal, it's only illegal if you are using the profits from a monopoly in another market to try to move into a market where there's competition.

                Again, so long as the mutually-profitable prices come as a result of reading each other signs, it's legal. It's only illegal if they start spreading their price information to competitors before offering it to the public.
        • by Pope ( 17780 ) on Wednesday March 03, 2004 @12:21PM (#8452584)
          No, because in both cases, the company supplies both the product (razor, printer) and the refill (blades, ink cratridges). There's no collusion, since it's one company doing it to their own product, and therefore not illegal since there's no cartel or monopoly abuse, since there are plenty of razor and printer manufacturers to choose from.
        • by nelsonal ( 549144 ) on Wednesday March 03, 2004 @12:23PM (#8452601) Journal
          IANAL, I am an economist who enjoyed industrial organization a bit too much for my own good. It is only when you have meetings or evidence of collusion that you begin breaking the price fixing portions of anti-trust law in such a way as to invite prosecution. As long as your monopoly arises as a result of a competitive market (for handles and printers) you are not violating the law.
          The justice department generally tries to avoid procecutions for anti-trust violations, which are very expensive and prefers to regulate the market by barring mergers which would reduce competition. However there was a ton of case law generated on these subjects from the turn of the century through the 1970s when suits were more common.
        • So I can go sue Gillette for price fixing on razor blade refills?
          I see only one company in this question so the answer is no.

          Or the printer manufacturers for price fixing on toner cartriges?
          If you found out that Epson, HP, Lexmark, etc. all agreed on the price of toner cartriges you would have a case. HP could charge $1000 for toner and it would not be illegal unless they had a deal with Epson, Lexmark, etc. to keep the price high.
        • It becomes illegal when people use their positions to actively inflate (or try to inflate) prices for goods, instead of letting the market decide. The whos, whys and whatnots don't come into it - that's the single act that is illegal. Breaking a price-fixing agreement isn't illegal, in fact it's possibly the only legal thing you can do in such a situation.
      • myself and my compeptitors agree to keep the price of widgets artificially high.

        That is where you cross the line


        The legal term is price collusion. I'd really like of someone could investigate gas prices. That's who I think is artificially keeping prices high.
        • Speaking of gas prices,

          I live in Columbus Ohio. On the off chance that I need gas, it's a given that the price will be anywhere from 1.89/gal to 1.99/gal (for the 87 octane style...)

          Now, on the days I DON'T need gas, the price has been as low as 1.59/gal. Why is there such variation? Also, if I go about 20 minutes out of town (to the truck stops) it's pretty steady at about 1.59/gal. What gives with the ups and downs?
          • I used to work for a guy here in the UK that would put a penny on a litre of gas (petrol) (5 pennies a gallon, roughly, but we sold by the litre) whenever he wanted to go on holiday.

            The guy in the fuel station up the road I could plainly see was a penny cheaper, yet still punters came in and bought gas (petrol) from us like they always did.

            Now I drive for a living and the money for my fuel comes out of my pocket. You can believe that I shop at Tesco fro my fuel. They guarantee to be cheaper than anywher
            • Do you get the same fuel efficiency from Tesco's petrol as from other brands? I have seen it claimed that the quality of supermarket petrol tends to be lower (sufficiently lower to outweigh the price difference) but I don't know what the reality is.
          • Clearly it's your use of gas that causes the fluctuations. Bastard.

            Seriously though, for the in town prices being higher there are a couple reasons. The cost of operating on more expensive land works its way into the price. There may also be city taxes involved as well.

            As far as why it fluctuates from week to week, you should view the gas station as a very small futures market. They don't price the gas they have now based upon how much they paid for it. They price it based upon how much it will cost
        • Gasoline is a loss leader in most places these days. A "Super America" can make a penny a gallon, or even take a small loss, and make it up by selling you a $0.50 snickers bar for a $1.00, and a "Big Gulp" cup of inexpensive sugar-water for $1.49. Their "Supermom" bakery products are also a huge cash-cow for them.

          Other gas stations make their money from maintenence and parts, or cigarettes, or deluxe car washes... you get the idea. Ever notice how few gas stations that only sell gas are left? That's be

          • That's because there's no money in retailing the gas itself anymore.

            Yet we see more and more stations with debit/credit card payments right at the pump.

            Ahh.. paradox..

            • Not really (Score:4, Informative)

              by bluGill ( 862 ) on Wednesday March 03, 2004 @02:51PM (#8454209)

              Stations have looked at it. Turns out the people who use the pay at the pump are the people who would only buy gas anyway (often with the same credit /debit card that skims ~3% off the sale price), while those who buy the stuff inside go inside and buy it anyway.

              With pay at the pump the don't need a clerk ($) to ring up sales for those who are only buying gas. Clerks costs money, if you can get by on one less clerk because of pay at the pump you are saving 5 bucks and hour. That adds up fast.

      • myself and my compeptitors agree to keep the price of widgets artificially high.

        That is where you cross the line

        I'd like to point out exactly where "that" is in the sentence:

        myself and my compeptitors agree to keep the price of widgets artificially high.

        Some people seem to be missing the part about there needing to be two parties in collusion.

    • ..I have a monopoly on widgets, or myself and my compeptitors agree to keep the price.."

      This would not be a monopoly but a cartel.
    • by JayBlalock ( 635935 ) on Wednesday March 03, 2004 @12:17PM (#8452532)
      Basically, at the point it could be shown that you all sat down together and decided, "Screw competition, we'll all sell the widget at price X."

      If you all independently arrived at price X as being the point you can reasonably profit when taken against manufacturing costs, it's legal.

  • by Anonymous Coward on Wednesday March 03, 2004 @12:11PM (#8452457)
    ...for ~$5.48, from some RAM manufacturer. In 2007.

    Man, I just deposited my $13.86 RIAA check yesterday.

    If the money keeps rolling in like this from Big Greedy/Evil Organizations, I may quit my day job.
  • by 0x0d0a ( 568518 ) on Wednesday March 03, 2004 @12:12PM (#8452462) Journal
    Man, memory seems so cheap these days. If it was being fixed before, I can't imagine what it'd be like without price fixing.
  • by Anonymous Coward on Wednesday March 03, 2004 @12:12PM (#8452467)
    Will this lead to cheaper RAM? I hope so, because I really need more... um, what's it called?
  • Uhh...no (Score:5, Interesting)

    by Pingular ( 670773 ) on Wednesday March 03, 2004 @12:13PM (#8452477)
    If you thought you paid too much for RAM in 2002
    I paid 70 for a stick of 512mb in 2002. That may be expensive compared to now, but with my first 486 I paid the same price for a 4mb stick. Unless you own a server farm, what's 10 per half a gig or ram?
    • Re:Uhh...no (Score:3, Interesting)

      by Fjord ( 99230 )
      I paid $54 for a 512MB 400Mhz DDR stick last year. The weird thing is that two months later, the same stick from the same retailer was up to $80 (I was going to get antoehr one) and it was the same elsewhere. I thought a fatory had blown up or something because all the RAM had gone up.
  • Price Fixing? (Score:3, Informative)

    by FrostedWheat ( 172733 ) on Wednesday March 03, 2004 @12:14PM (#8452483)
    Price Fixing? Are they sure? In 2002, they where practically giving them away.
  • by Anonymous Coward
    Let's get a class action going. A voucher for a single chip from a DRAM bank would surely make up for this affront. That and millions for the lawyers.
  • by ghettoboy22 ( 723339 ) * <scott.a.johnson@gmail.com> on Wednesday March 03, 2004 @12:14PM (#8452486) Homepage
    Saving my mod points....

    While I'm willing to give any company the benefit of the doubt, it does seem rather suspicious that Micron chose to sell off their PC arm and focus instead on, the implied, more lucrative memory manufacturing business line. Circumstantial yes, but it never made sense why Micron would sell of a business line that was the only good alternative to Dell.

    That being said, it's really hard for the DoJ to prove a conspiracy existed to fix prices of memory between manufactures. IANAL, however from my understanding basically a "smoking gun" would be the only way a conviction could be had - some emails between companies discussing price or marketing strategies perhaps. Other than that, it's almost impossible to get a price-fixing case with a favorable outcome for the prosecution.
    • by PalmerEldritch42 ( 754411 ) on Wednesday March 03, 2004 @12:21PM (#8452582)
      it never made sense why Micron would sell of a business line that was the only good alternative to Dell.
      Um, maybe because they were not a good alternative. My company used to use all Microns for a few years. They all sucked when we bought them, and very few of them are still in use now because they have crashed, and it was cheaper to replace them then it would be to repair.

      We have since gone to Dell, which are admittedly more expensive, but they work properly and have good support (though lately G'nesh Singh Bhudanaramading keeps answering the phone when we call- we never know what he is talking about, but when a new network card appears the next day, it usually fixes the problem...)

      • All I ever see is el cheapo not worth the silicon & metal their made from Dell's. I don't see how you think Dell is better than Micron was back then, from my view of fixing their 'consumer grade' machines they are equally bad, with only the specialty PC companies making a good reliable product...
    • I'd agree with that. But. you'd have to admit - an internal email by a Micron executive saying:

      "The consensus from all suppliers is that if Micron makes the move all of them will do the same and make it stick."

      smells of gunpowder.
    • If Micron has been price fixing, they havent done a very good job of it.

      They lost $521 million [micron.com] in 2001
      They lost $1025 Million [micron.com] in 2002
      They lost $1273 million [micron.com] in 2003

    • by HardCase ( 14757 ) on Wednesday March 03, 2004 @01:34PM (#8453308)
      While I'm willing to give any company the benefit of the doubt, it does seem rather suspicious that Micron chose to sell off their PC arm and focus instead on, the implied, more lucrative memory manufacturing business line. Circumstantial yes, but it never made sense why Micron would sell of a business line that was the only good alternative to Dell.


      Micron owned ~60% of MicronPC. The business was losing money at a fantastic rate and shareholder pressure was on Micron to divest itself of businesses that were not part of its core competency. MicronPC itself was straying well out of its own core business by operating a rather poorly-run Internet services company, as well as making a huge departure from its niche of being a no-compromise performance PC company. MicronPC was a terribly mismanaged company.


      Micron either sold or closed a number of other businesses as well. The company used to be in the construction management business, RFID business, flat panel display business and property management business. They even manufactured semiconductor processing equipment. The problem was, though, that the company was a semiconductor manufacturer. During the dot bomb days, that was well and good, but, like many other companies that strayed from what they did best, when the bubble burst, Micron was stretched a little thin.


      But, to the point, Micron did not sell MicronPC. They donated their entire holdings to the Micron Foundation. MicronPC "sold" (and by "sell" I mean that they paid Gores to take the business) the computer business to a turnaround company and merged with Interland to further its ISP business.


      It's possible that 6 or 7 years ago MicronPC was a good alternative to Dell, but, up until a year or so ago, that certainly wasn't the case. As soon as MicronPC started trying to directly compete with Dell, the company began tanking. The product quality suffered tremendously and the company simply didn't have the management quality necessary to make the jump from a niche manufacturer to an industry giant. It's interesting that in the past year, MPC is now making a profit and building a focused range of no-compromise systems...much as it did in the early days.


      Micron Technology recognized what was happening at MicronPC years ago and pretty much turned its back on MicronPC quite a while before the company split up.


      -h-

  • Toner and Ink (Score:5, Interesting)

    by nycsubway ( 79012 ) on Wednesday March 03, 2004 @12:14PM (#8452487) Homepage
    I'd like to see the price of toner and ink cartridges go down. Those things seem so simple, I wonder why they are so expensive. A memory chip seems slightly more expensive to produce than an ink cartridge. Yet the prices are very similar.

    • Re:Toner and Ink (Score:3, Informative)

      by shystershep ( 643874 ) *
      It's because that's how they make their money. They sell the printers at cost or even a loss, and then make you pay out your nose for proprietary ink. Much, much more profitable in the long run (i.e., one-time greater profit of $100 from one printer versus greater yearly profit of $100-$200 from ink for that printer).
      • My answer (Score:3, Interesting)

        I buy a new printer whenever I need ink again, and donate the old one to a school or charity as a tax write off. Thus far, it has been a much cheaper per page cost, not counting the tax value. Remember, many organizations let you say how much the item is worth on donation.

    • That's because the competition is all in selling the printer. People are too stupid to look at the printer price AND the consumeables price when they buy, so they buy the cheapest printer. I have a friend who is replacing her new printer because she didn't realize how much the toner cartridges cost when she bought it. (HP chip-enhanced, of course)

    • I'd like to see the price of coffee makers go down. Those things seem so simple, I wonder why they are so expensive. A clock radio seems slightly more expensive to produce than coffee maker. Yet the prices are very similar.

      I'd like to see the price of a good steak go down. Cows seem so simple, I wonder why meat costs so much. A cheap calculator is far more complicated to manufacture. Yet the prices are very similar.

      [insert your nonsensical comparison here]

    • Sod the cartridges. They are cheap and easy to manufacture. The ink itself though, is expensive. A while ago I had to undergo so HP presentations for retailers ( Think of a peptalk... I did leave with a rocking HP mug btw :) ) and part of the whole talk included as to why the prices on all equipment is to be considered decent, despite the public's idea of ink being ridiculously expensive. The reasons given were vague, partly marketing speak, partly due to the fact we had a shipment arriving at the same time

      • Uh huh... (Score:3, Interesting)

        by jridley ( 9305 )
        Is that why to refill the cart Canon charges $10 for, I can buy ink from a 3rd party for about a buck a refill, and that's in small quantities? If I buy by the gallon it's even better; $85 per gallon, 15ml per cart, that's 252 refills, or 33 cents per refill. If I wanted to buy by the drum it'd probably get a little better.

        Similar economics exist for the HP and Epson printers I've owned.

        And, the ink is just as good, if not better. I've done both color comparisons and long-term (2 years in sunlight) fad
  • by stevens ( 84346 ) on Wednesday March 03, 2004 @12:15PM (#8452502) Homepage

    I've read cases where the same laws have been used to prosecute companies no matter what they do:

    • If you set a price lower than your competitor, you can be accused of "predatory pricing"
    • If you set a price higer than a competitor, it is used as evidence of an "abusive monopoly position"
    • If you set the same price as a competitor, it is evidence of "price fixing"

    A law that you can't know you're breaking in advance is no law: it's a license for prosecutors to go after anybody.

    • Everyone of your scenarios requires said company to be a monopoly. There are enough memory manufacturers (each with enough market share) so that that is not the case. Now, if they get together and do those things, that is a cartel and thus illegal.
    • by JayBlalock ( 635935 ) on Wednesday March 03, 2004 @12:26PM (#8452635)
      If you set a price lower than your competitor, you can be accused of "predatory pricing"

      If you price your product BELOW COST, you can be accused of predatory pricing. Without this rule, no small manufacturer could ever reasonable compete against an established one. The one with the large market share would simply undercut the competition by selling at a loss and ride on its existing resources until the competition went under. If you set a price higer than a competitor, it is used as evidence of an "abusive monopoly position" Only if coupled with other factors, such as anti-competitive \ exclusive contracts with related parties. Case in point, Microsoft's contracts with computer OEMs preventing them from bundling other OSes on the same computer as Windows. BeOS - overall, a superior product - went under because of precisely this. They had no chance to compete and prove themselves on an open market because of Microsoft's restrictive contracts. (which, in turn, no OEM would break because of Microsoft's ownership of the home market)

      If you set the same price as a competitor, it is evidence of "price fixing"

      CAN be, but only very rarely. As was pointed out in another post above, price-fixing \ cartel cases are spectacularly difficult to prove and usually require a "smoking gun" as evidence. The government even launching such a case is itself evidence that they have a load of proof on their side. Otherwise, it's assumed to be the result of normal market pressures. (why, for example, all the major computer brands cost about the same - prices have trended downwards since the 80s until it's hit a point that it's extremely difficult to get any cheaper and still profit. That's not price-fixing, it's the Free Market actually working as it's supposed to.)

      • Ok, I coulda sworn I had more paragraph breaks in there. Sorry about the formatting.
      • Well, since you say if you price your product below cost you can be accused of predatory pricing, the memory makers price fixing would be predatory price fixing since they were all still losing $$$ hand over fist even with this supposed price fixing. It might be against the law, but seems to me companies should be allowed to say, "hey, why don't we stop giving our product away with a dollar bill wrapped around each one..."
        • Well, since you say if you price your product below cost you can be accused of predatory pricing, the memory makers price fixing would be predatory price fixing since they were all still losing $$$ hand over fist even with this supposed price fixing.

          Um... How can it be "predatory" if everyone is engaging in the practice? By definition, predators require prey.

          Anyway, I was responding with general arguments against the equally general arguments of the parent. I didn't mention the specific RAM case once

    • Usual disclaimer - IANACL (I Am Not A Competition Lawyer.

      However, I have been involved in training and training others on competition and competition law.

      You're not quite right in saying the same laws are being used - it's the same overall competition legislation, but the three cases you've mentioned relate to very different clauses and laws within that legislation.

      I can't speak for the US, but in the UK it's basically like this. . .

      1. You can only be accused of predatory pricing in a specific circumst
      • For example, a software monopoly would be breaching this if they sold their office suite for next to nothing. Often, the key is whether the company has sold for below their cost.

        How is a "loss" for software calculted? If you sell 1 copy for $10 million or 10 copies for a $1 million, the result is the same (assuming the physical media and distribution price is zero). What if they sell it for $1 and sell 10 million copies? How can software really be sold for a loss? It is not a physical product that nee
    • by LostCluster ( 625375 ) * on Wednesday March 03, 2004 @01:04PM (#8452977)
      Say what?

      If you set a price lower than your competitor, you can be accused of "predatory pricing"
      Only if you enter a market with a price that's below cost with the intent of raising your prices once you've knocked out your competitors.

      If you set a price higer than a competitor, it is used as evidence of an "abusive monopoly position"
      Huh? If you have a competitor, you can't abuse your monopoly because you don't have one.

      If you set the same price as a competitor, it is evidence of "price fixing"
      Price fixing can't happen if the prices aren't even, but there's still more that needs to be proven. Is there an under the table agreement to keep the prices where they are? If so, that's price fixing, if not, then that's just the free market having agreed on a price... any player can try to deviate from that price if they want to, but moving up would mean less market share, and moving down would lower profits in a way that wouldn't be made up by the volume.
  • by Anonymous Coward
    DRAM?!!!! You benighted savages are still using DRAM?!!!!
  • Interesting (Score:2, Funny)

    by JLSigman ( 699615 )
    I bought a Dell in 2002, I may have to dig up the papers to see what brand of RAM is in there. Not that it'd make any difference, we wouldn't see our checks for 2 or 3 years, and it'd be just enough to buy half a stick. ;-)
  • by Brahmastra ( 685988 ) on Wednesday March 03, 2004 @12:16PM (#8452520)
    In April 2002, Michael Dell said that his company, PC maker Dell, began to buy memory from second-tier manufacturers to avoid cartel-like behavior of some memory makers. Why is price fixing by a few manufacturers a concern when alternate vendors are available? It's a problem only if the price fixers are the only vendors. The market is fixing itself. If Dell buys from the 2nd tier vendors, the price fixers have to ultimately lower their prices.
    • by JayBlalock ( 635935 ) on Wednesday March 03, 2004 @12:37PM (#8452736)
      Well, that brings up the larger issue of whether 'no harm, no foul' is a valid legal concept. And we've been wrangling over that one for millenia.

      The alternative point of view would be to say, at the time they (allegedly) did this, they obviously felt that this illegal act would bring them higher profits. That the market would shift to deny them their profits could not be forseen. So at the time, it was an illegal act with the intention of garnering ill-gotten gains. (allegedly)

      While I can see your position, from a larger societal standpoint, I can't support only prosecuting cases of illegal acts in the event that they succeed. Taking that standpoint would, in some ways, encourage illegal (AKA antisocial) actions, since the odds of being caught and punished suddenly go down.

      • Prosecuters can't charge somebody with murder if they fail to actually kill the person. That's why there's another crime called "attempted murder' to cover the failed attempt.

        This is in part why some business people would be able to get off the hook if they just cooperated with the investigations, but instead overcompensate and get charged for covering up the crime they thought they comitted even though they didn't quite make it.
  • Now that the FTC antitrust case against Rambus has been dropped, Rambus is gearing up to independently sue Infineon, Hynix and Micron whom it claims artificially lowered prices of DRAM to corner RDRAM out of the market.

    When rambus hit the streets it was way too expensive, incompatible and a one man show. The price was only one factor, and allthough a major one, I think many regarded rambus like people regard intel itanium. An incompatible architecture that is way too expensive comparing to the competitors

  • by WIAKywbfatw ( 307557 ) on Wednesday March 03, 2004 @12:16PM (#8452526) Journal
    ...when I saw this. I paid 200 Pounds for 1MB of RAM (two 512KB SIMMs) in 1990. I just paid 105 Pounds for 1GB of RAM (two 512MB DIMMs) a couple of weeks ago.

    I'm not saying that price fixing shouldn't be punished but that comparison pretty much puts things in context. When it comes to putting together a PC, getting a decent amount of memory isn't as financially crippling as it once was.
  • by DangerSteel ( 749051 ) on Wednesday March 03, 2004 @12:18PM (#8452553)
    Compared to say about 1994-1995 I believe. I clearly remember paying $308.00 for an 8 meg simm. That was 8 times more memory than my first pc had so it was worth it !
  • Too Bad About Rambus (Score:5, Interesting)

    by stevesliva ( 648202 ) on Wednesday March 03, 2004 @12:19PM (#8452560) Journal
    I thought the FTC complaint against Rambus would have set a great precident. Basically Rambus participated in standards development for DRAM technology and ensured that the standards would include technology infringing on Rambus patents without disclosing those patents. Rambus then withdrew and began suing every DRAM maker in sight.

    SCO is doing just about the same thing as Rambus, but with much less success. Participate in Linux/UNIX standards groups, but later claim to own those standards and begin suing everyone.

  • by fireduck ( 197000 ) on Wednesday March 03, 2004 @12:20PM (#8452571)
    Class action lawsuits are becoming my new favorite pasttime. Consider:

    In the past month, apparently I've been involved in at least 3 class action lawsuits. Both my wife and I got checks for $13.86 from connecticut's part in suing the record labels over overpriced CDs. Both of us have gotten paperwork regarding whatever claims are against Microsoft and software purchased in the late 90s (couple window versions, offices, etc.). I just submitted something for a company who were apparently inflating their stock value (or something) while I owned a number of their shares. And I can't even recall doing anything to get involved in the lawsuit to begin with. That's the best part. Christmas in March. I love it.

    So, when are the consumers going to sue and and how do I convince the authorities to go after Corsair, as that's the only memory I purchased in that timeframe?
    • > So, when are the consumers going to sue and and how do I convince the authorities
      > to go after Corsair, as that's the only memory I purchased in that timeframe?

      You must have to rent storage space for all your receipts.
  • by ForestGrump ( 644805 ) on Wednesday March 03, 2004 @12:23PM (#8452599) Homepage Journal
    Back in the day when ram was little doughnuts, and it cost its weight in gold...

    Back in the day when punch cards were book marks...

    Back in the day when minimum wage actually kept you alive...

    Back in the day...

    -Grump
  • by peter303 ( 12292 ) on Wednesday March 03, 2004 @12:27PM (#8452645)
    Commodity DRAM memory has been around $0.10 / megabyte since 2002. I remember slashdot stories about $100 gigabytes at that time. Until Wintel breaks the 2GB/32-bit limit the core memory cost is not a major factor in personal computing. in contrast, flash memory has fallen from $1.00 to $0.25 that time period.

    The price plateaus when a chip generation matures. The next 4x generation seems a bit delayed.
  • and.. (Score:2, Interesting)

    by djupedal ( 584558 )
    ...this was back in 2001, and RAM is dirt cheap today. Win some, lose some - big deal.
  • by Anonymous Coward on Wednesday March 03, 2004 @12:38PM (#8452744)
    I'm no longer in the standalone DRAM business, but I did spend about 20 years, there.

    Much of the time, there's no money to be made. Much of the time, just about everyone runs at a loss. The industry is also cyclical, and sometimes there's good money to be made. It doesn't help that it takes serious time to build a chip, so build-to-order doesn't really work very well. There's also time involved in packaging chips into a usable form, especially because it may involve transportation to a remote site. This aspect may be key, later.

    IF there is price-fixing involved, and I suspect that there really isn't, it's the general idea of flattening out the bottom of the price curve a little in the cycle. I suspect it's far more likely that memory makers have decided, "It's just not worth bringing memory to market for less than $xx.xx." Remember the thing about packaging? At some price point, it may be better to not even bother packaging chips. It may even be better to grind them back into sand. Each manufacturer has different costs, but they're all doing the same thing. I suspect that they all have different, but similar package/hold/destroy price points for their chips.

    This might appear to be price-fixing, but isn't. It's simple economics.

    Years back, I bought my Mom a pair of earrings made from defective 4Mbit chips I had worked on for 6 or 7 dollars. At the time, perfect chips were selling on the open market for $4.50.
  • by Anonymous Coward
    the price fixing went on for a long time afterwards, long after the factories were rebuilt and at capacity. the ram was artificially stockpiled and the world was kept in a ram shortage = high prices.
    be thankful they dont limit the supply again, debeers style.
  • I know I paid too much for RAM in 2001-2002. But what can we do now?

    Even if the case went the way of the consumers two years later, the damage has already been done.
  • by jason.mitchell ( 711646 ) on Wednesday March 03, 2004 @01:03PM (#8452957) Homepage
    If you think maybe 200 dollars for a peice of actual hardware is bad, they might want to start looking into software like windows trying to sell $1,000 for microsoft windows xp. Atleast you can actually hold the ram in your hand and be like "yeah! I have ram in my hand."
  • by brucmack ( 572780 ) on Wednesday March 03, 2004 @02:18PM (#8453833)
    I bought DDR333 RAM in Jan last year, when it was significantly higher than it was in 2002, and it was back down below half that a few months later. Did they do the same thing here, or was that just bad luck for me?

Intel CPUs are not defective, they just act that way. -- Henry Spencer

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