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Samsung To Pay Out $300 Million In Anti-Trust Suit 227

Posted by Zonk from the that's-a-lot-of-ram dept.
infernalC writes "Reuters is reporting that Samsung has agreed to plea guilty to charges of price fixing in the memory market in a $300 million settlement." From the article: " Samsung would become the third chip maker to plead guilty in the wide-ranging probe of the prices of dynamic random access memory, or DRAM, chips. The Justice Department has blamed the price-fixing conspiracy for driving up the price of chips used in products ranging from personal computers and servers to cell phones, cameras and game consoles."
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Samsung To Pay Out $300 Million In Anti-Trust Suit More

Samsung To Pay Out $300 Million In Anti-Trust Suit

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  • So thats why I can never afford anything!
    • So Samsung pays a fine (to lawyers), this drives up their expenses, therefore their prices, so memory is now even MORE expensive. And I as a consumer gain.....what...exactly?

  • And How Does This Help Me? (Score:5, Insightful)

    by Nom du Keyboard ( 633989 ) on Thursday October 13, 2005 @03:19PM (#13784727)
    Samsung has agreed to plea guilty to charges of price fixing in the memory market in a $300 million settlement

    This may enrich the justice department, computer companies, and/or their shareholders, but how does it help me?

    • You can buy the $300 million memory! Going once... going ...

    • Exactly.

      are they planning on refunding each consumer of said chips a quarter each or something? or does it just mean Samsung loses money to greedy lawyers, so for the next 6 quarters Samsung will drive up the prices of the new chips (logally, maybel) to make up for it?

    • Re:And How Does This Help Me? (Score:5, Insightful)

      by nurb432 ( 527695 ) on Thursday October 13, 2005 @03:31PM (#13784887) Homepage Journal
      IT wasnt designed to help you, dear consumer. You have been screwed, and you must learn to accept that.

      The government gets the extra cash, and of course the lawyers.

      We the consumers, almost never get a break after its proven we overpaid.

      I bet prices wont even drop after this, 'due to inflation'.
      • I bet prices wont even drop after this, 'due to inflation'.Or, prices will stay the same/rise because of the whole having to pay $300 million. They get stung for overcharging us, so they'll have to pass the costs on. And they just blame the gov't. So we pay higher prices than we would have, and far higher than we should be paying. Anyone want to reconsider this?
        • Anyone want to reconsider this?

          I'd reconsider buying Samsung, personally. Then you don't have to pay the settlement-inflated costs for their RAM, nor reward them for paying their "cost of doing business" fine after using illegal business practices.

        • Actually, no. If that was the case, then the memory companies involved would have been passing on the costs of doing business during the time that they were losing money hand over fist (coincidentally, the time that they were also fixing prices, go figure). Memory chips are a commodity - the prices are set by the market and it's up to the manufacturers to figure out how to make them for less than the market price. It's not like a car, where the price is determined by the cost of manufacturing.

          So the memo
      • If they're lucky, the people who bought this overpriced RAM will get a coupon for $1 off their next Samsung purchase. With the lawyers getting millions in fees, of course.

      • Re:And How Does This Help Me? (Score:4, Informative)

        by kilgortrout ( 674919 ) on Thursday October 13, 2005 @07:33PM (#13786991)
        I know this is slashdot and no one reads the article but really. This was a criminal prosecution for price fixing brought by the US Dept of Justice and I can assure you those government attorneys will be getting their usual monthly slalary. The $300 million metioned in the article is a criminal fine to be paid to the government.
        And for the other legal retards out there, criminal fines are not normally divied up among members of the community; it goes into the treasury.
    • it punishes the "capitalist" corporations monetarily, the only kind of punishment they can understand.

      maybe next time, they'll learn to better hide their illegal ventures or not try it at all (nah!).
      • No, a real punishment for a corporation would be dissolution, or an injunction preventing business in the U.S. for a period of time with the threat of dissolution should it be found they were conducting business in violation of the injunction. *That* would hurt them. As it is, corporations aren't held to anything approaching responsibility. They have most of the rights of people, but almost none of the responsbilities. As long as it's cheaper to break the law, they will.
        • The government isn't going to hurt corporations for the same reason they'll never lower the price on cigarettes. The governemnt is there to help themselves. If they can say they're doing it to help you by "hurting" price fixers or to helping you quit smoking, all the better.
    • This may enrich the justice department, computer companies, and/or their shareholders, but how does it help me?

      It gives the government ample motivation to sue companies the next time they are doing anything illegal. When the politicians stand to gain, they pull out all the stops.
    • "This may enrich the justice department, computer companies, and/or their shareholders, but how does it help me?"

      Samsung isn't going to be too eager to engage in price fixing again. That's how it benefits you.

  • Holy moley... (Score:2, Funny)

    by Sinryc ( 834433 )
    Yay! Some GOOD Tech news for a change!

  • $300M? (Score:5, Insightful)

    by geomon ( 78680 ) on Thursday October 13, 2005 @03:20PM (#13784740) Homepage Journal
    I always wonder how much these fines really hurt mega-corps. If they were able to control prices so effectively that they were accused of price-fixing, then the potential profits from that enterprise would be in the billions.

    Seems like these fines are just the cost of doing business. I'm sure that $300M is a lot less than their manufacturing charges, or even their advertising expenses.

    • Fines and Penalties (Score:5, Informative)

      by SeanDuggan ( 732224 ) on Thursday October 13, 2005 @03:23PM (#13784791) Homepage Journal
      Well, in theory, it's supposed to discourage them because fines will continue and increase if they continue such a practice. However, the companies are always able to switch to the next shady business practice.

      • Re:Fines and Penalties (Score:5, Insightful)

        by geomon ( 78680 ) on Thursday October 13, 2005 @03:30PM (#13784870) Homepage Journal
        However, the companies are always able to switch to the next shady business practice.

        And they do so without admitting guilt.

        I wish I could break laws and not admit guilt.

        I guess we should all become corporations. That way we could just disincorporate and reincorporate under a different name.

        Beats going to jail.

        • Re:Fines and Penalties (Score:3, Interesting)

          by RingDev ( 879105 )
          "I wish I could break laws and not admit guilt."

          You can, it's called pleading "No Contest". It means you don't admit guilt, but it is easier/cheaper for you to accept a guilty verdict then to fight it.

          -Rick

    • Re:$300M? (Score:2, Insightful)

      by ergo98 ( 9391 )
      I always wonder how much these fines really hurt mega-corps.

      $300 million is a lot of money to anyone - even a mega-corp.

      Nonetheless, a better question would be the motivation and impartiality of governments. It seems that the US government is busy fining every "foreign" company in every way it can (usually bullying for multi-million, or BILLION, dollar settlements), adding the proceeds to the general slush fund (it seldom makes its way to consumers), and the European governments are busy taxing - sorry fini
      • $300 million is a lot of money to anyone - even a mega-corp.

        Given the industry's total take on this scheme to raise chip prices overall- what percentage of profits do you think it is? Maybe 3%? With fines like that- it's a damned good business decision to break the law even if you think you'll get caught.
      • $300 million is a lot of money to anyone - even a mega-corp.

        Most definitely, but they won't bat an eye at continuing conduct that draws those kinds of fines if they make $500 million for every $300 million they pay in fines.
    • Seems like these fines are just the cost of doing business. I'm sure that $300M is a lot less than their manufacturing charges, or even their advertising expenses.

      But it's still lost profits for their shareholders. According to their stock website [samsung.com], there are 148 million outstanding shares, and 22 million outstanding preferred shares, with an annual 2% dividend.

      From their website, their profits last year were 10,000 million US dollars, so 300 million is a good 3 percent of that. Given that shareholders will
      • From their website, their profits last year were 10,000 million US dollars, so 300 million is a good 3 percent of that. Given that shareholders will probably own shares in their hundreds if not thousands, that's enough to be felt by each shareholder.

        Yes, but if they were conducting this scam over the course of more than several years, then the losses could be less than 1% per year.

        Now I won't argue that the shareholders aren't hurt by the actions of manangement in this particular case. But the windfall that
        • That's true - I've been following the Rambus/Samsung/Hynix/Siemens/Micron Technology lawsuits battle over RDRAM/SDRAM memory (worth billions), and wonder if this battle will ever end (the latest installment seems to have Rambus suing Samsung [infoworld.com]).

  • Do we get any of our money back? (Score:4, Interesting)

    by SeanDuggan ( 732224 ) on Thursday October 13, 2005 @03:20PM (#13784748) Homepage Journal
    I guess the question is, do those of us who have bought memory during this time get money back? My first impression would be no, as this is a criminal suit, not a civil suit. *shrug* If that's the case, I'm sure there will be some opportunistic^K altruistic lawyer who will file one on our behalf for a substantial legal fee^K^K^K^K^K pro bono.

  • So... (Score:3, Interesting)

    by steveo777 ( 183629 ) on Thursday October 13, 2005 @03:21PM (#13784753) Homepage Journal
    Does this mean Apple is off the hook in Korea [slashdot.org]? Or are they twice as screwed because they got "fair" prices?

  • Doesn't matter..... (Score:5, Funny)

    by 8127972 ( 73495 ) on Thursday October 13, 2005 @03:21PM (#13784757)
    ...... cause I can't afford the price of gas so that I can drive to the computer store to buy that "affordable" RAM.
    • So take the train there, or walk, or bus.
      • As much as Im a believer in public transportation, for me to get to the easiest computer store without driving (and not the closest), would involve a mile and a half hike to the train station, almost an hour on the train, change to the subway for 2 stops, then a mile walk, or bus ride.

        Public trans in the US is a joke, but I wish it wasnt.
        • Yeah, it sucks. I'm recommending to everyone I know that they move to public transit as gas prices get higher. It's not worth driving 20 miles (or 100) for things when you can do it for much cheaper on shared transportation.
          • Remember, for most of the US public transit isn't an option. You should encourage them to fight for public transportation where appropriate and to carpool whenever possible. :) That will get us much more!

          • It's not worth driving 20 miles (or 100) for things when you can do it for much cheaper on shared transportation.

            I live outside a largish city (Memphis, TN). Public transportation to every home in the suburbs is not practical. Even within the city where MATA buses run so regularly I always seem to be stuck behind one, few people ride the bus. I guarantee I will see three buses before I get the one block to the interstate. On those three desiel chugging buses there might be 10-15 people total. Far from

            • That's because you live in a suburb. They'll go away as it becomes too expensive to live there.
              • That's because you live in a suburb. They'll go away as it becomes too expensive to live there.

                Interesting that you say that... because every example I can think of where public transportation systems are well developed and regularly used are in cities where the cost of living is much higher than it is in the suburbs. It's one of the reasons people move to the suburbs - to get more for less money.
                • And suburbs are based on a presupposition of cheap oil. What happens to suburbs when the people living in them can't afford to drive? Remember, using public transit *instead* of a car is much cheaper, and that gulf gets wider as oil prices go up (especially if we're talking about electric trains you can power from a non-oil source).
  • is the lawyers are getting $275mil and then everyone else gets a buck. ;)
    • the lawyers are getting $275mil and then everyone else gets a buck. ;)

      What makes you think you're going to get a buck? The people who suffered from the overpriced memory won't get a single penny.

  • what about (Score:3, Interesting)

    by Rac3r5 ( 804639 ) on Thursday October 13, 2005 @03:22PM (#13784772)
    what about those oil and medical companies that drive the prices on the smallest pretext

  • The Real Question... (Score:5, Insightful)

    by caenorhabditas ( 914198 ) on Thursday October 13, 2005 @03:23PM (#13784782)
    The real question here seems to be, "Will Samsung actually change their practices?" In many high-profile anti-trust cases, it seems that the government will fine the company involved, but then the company goes back to the same old tactics of price fixing and other monopolistic behavior. How does the DOJ propose to prevent Samsung from illegal tactics in the future?

    • Re:The Real Question... (Score:3, Insightful)

      by bani ( 467531 )
      the only punishment that historically seems to have any impact on corporate behavior is to send corporate executives to prison. anything else has no effect, it's just "the price of doing business".
    • The answer is simple, criminal penalties against the people who orchestrated the price fixing. The settlement only "settles" Samsung's corporate liability, but the government has said they are likely to pursue criminal charges against 7 Samsung executives for Sherman act violations. So, i agree that $300 million isnt a financial deterrent to high-powered executives, but taking it up the ass in Leavenworth is.
      • I think the reality of such a law is that defining uncompetitive business practices as illegal to "orchestrate" would either have to be absolute and concrete, or vague and subject to interpretation. In the first place, a lot of concessions would have to be made on the part of those seeking harsher punishments for uncompetitive practices, simply because you want to err on the side of individual liberties and not locking people up without good reason. In the second case, you'd make doing business from anyon
      • taking it up the ass in Leavenworth

        Why is it that every time someone mentions prison on /., they feel obligated to include a reference to the ass-fucking that presumably takes place there? I'm not trying to single you out here, just commenting on what I perceive to be a persistent trend.
    • Although your question fits the headline and, to a degree, the summary, it doesn't really fit the situation for which Samsung was fined. The whole affair was not over monopolistic practices, but because the top four producers of DRAM conspired to fix prices worldwide. Samsung is just the last of the bunch to be assessed a fine. Infineon paid, Hynix paid. Micron did not because, under US law, by being the first to admit to the deed, they got off without punishment - essentially the same as prosecutors gi

  • Cue the libertarian economists (Score:5, Insightful)

    by Marxist Hacker 42 ( 638312 ) * <seebert42@gmail.com> on Thursday October 13, 2005 @03:24PM (#13784804) Homepage Journal
    Who will tell us all how regulation will never solve anything [slashdot.org] and how the government is evil for trying to break up this scam based on their own outlandish economic theories.

    Of course, from my way of thinking, $300 million, or even $485 million if you count the fine against the other chip manufacturer fined so far, is probably just a drop in the bucket compared to the money earned by this scheme. We're lucky to have a regulated economy where the government can do *something* about this at least- but if you think this is going to make those who like money more than people stop trying to destroy the free market, then I've got a bridge or six in Portland to sell you....
    • Giving the government the power to regulate business for the benefit of consumers against megacorps also gives the government the power to regulate business for the benefit of the megacorps against the consumers.

      Look at software patents. Patents are an exclusive monopoly granted by the government. They're bad news for almost everybody out there except for a few greedy software shop executives.

      I'm not advocating a totally free market, just that we understand the dangers of granting the government regulat

      • Giving the government the power to regulate business for the benefit of consumers against megacorps also gives the government the power to regulate business for the benefit of the megacorps against the consumers.

        Absolutely true. Software patents, which you mention next, are an excellant example of this.

        I'm not advocating a totally free market, just that we understand the dangers of granting the government regulatory power over our economy.

        We did that far too much the day we let the government print m

  • Micron Tech organized the price fixing, then ... (Score:4, Interesting)

    by rlglende ( 70123 ) on Thursday October 13, 2005 @03:27PM (#13784830)

    I believe the story here is that Micron Technology organized the price fixing ring, then informed the government(s), thereby obtaining immunity.

    This is an interesting strategy for handling competition, but dont' fool yourselves that it means lower prices for anyone.

    Lew
  • Require them to deliver a large bunch of memory packages (with a 10 year guarantee) for free to anybody that can claim that they have been suffering from the price.

  • increased RAM prices to help Rambus out? (Score:3, Interesting)

    by dueydotnet ( 805472 ) on Thursday October 13, 2005 @03:32PM (#13784894)
    Just did a little bit of searching when I read the article. According to wikipedia, the first motherboards with Rambus were in 1999, and Intel had an agreement with Rambus to use their RAM until 2002. These are the same years quoted in the article. I wonder if there are other players in this game other than Samsung?

  • How much! (Score:4, Interesting)

    by squoozer ( 730327 ) on Thursday October 13, 2005 @03:34PM (#13784919)

    What I would like to know is how much money it is estimated they made from price fixing. While $300 million is a lot of money I can't help feeling that they made a lot more than that and therefore over all they have still made a profit. Personally, I think these companies should be fined to the point where they are all but bankrupt. After all it's not like they did it by accident. Perhaps makign the directors personally liable would be another route to take. The threat of a couple of year behind bars would probably make them care about shady practices.

    • What I would like to know is how much money it is estimated they made from price fixing.

      It seems easy enough to find out - just check out their earnings reports for the period of the price fixing.

      You'll find that, other than Samsung, which does not break out its memory business from everything else, Hynix, Infineon and Micron all had record or near-record losses.

      I guess that without the price fixing the losses would have been worse, but they were pretty large amounts of money...enough that Hynix nearly went
  • Every time I notice a stall in falling memory prices, I shortly afterwards hear about some massive anticompetitive corporate behavior. The penalties and other inhibitors clearly aren't working: they're accounted as just another cost of doing business, another risk. We need to see actual justice being done, not just cranking up the admission fees to the market exploiters' club.

    And when are we going to find out why LCD prices haven't fallen?
    • because you are far more observant than the average shil--err slashdotter.

      you and i notice things like this but try getting anyone with less than 2 brain cells to notice or even acknowledge.

      same thing happened with the intel anti-trust suit. following the announcement, i saw far more AMD machines being advertised in my local sunday newspaper than ever before. before there are 2-3 AMD machines... after the suit, i saw 8-9 AMD computers per ad.

      intel is even more guilty than MS yet i see only a small handful o
      • All these "Justice Department" competition actions are the product of lobbying by the competition. Even the Microsoft "monopoly" suit was pushed into life by competitors apparently protecting "Netscape" from IE, but really backed by IBM protecting Lotus Notes from Exchange/Outlook. Intel really has only relatively puny AMD to complain, especially now that IBM/Motorola are out of the personal computer CPU biz, so there's less demand for justice from people to whom the government is willing to listen. Even th

  • Wonderful! (Score:5, Insightful)

    by medeii ( 472309 ) on Thursday October 13, 2005 @03:36PM (#13784939)

    Now, can we do something about the other [riaa.com] industry [microsoft.com] cartels [wal-mart.com]?

    • no.

      they are very big "donors" to the GOP (and the DEMs when they're in "power").

      that's how they survived so long... they learned that to be above the law, you have to "buy lots of charity ball tickets".

  • Jail Time As Well? Infineon Execs Serving Time (Score:2, Informative)

    by Anonymous Coward
    http://www.usdoj.gov/atr/public/press_releases/200 4/206631.htm [usdoj.gov]

    Four Infineon executives were sent to prison (albeit briefly) as part of their plea bargain, also in SF Superior Court.
  • Does this open the door to a class action lawsuit against Samsun or other chip manufacturers, so that we can recover some of the lost money we paid out in an agreement we though was fair at the time [or at least fair enough to bother buying?].

    How is the consumer going to see any of this fine money otherwise?

    • Re:Clas-action time? (Score:2, Insightful)

      by jac0b84 ( 922717 )
      Are you all mad? It is Samsung's right to increase prices if they wish. Even if they control a specific technology, it was their development and capitol which achieved this. Price control works both ways, companies increase while the government caps. You all are so blinded by the mere chance that you could see some cash to realize that the government is limiting the sucess of our economy. When one of you create a company with its own technology , will you then be in favor of the feds denying your rewar
      • You need to friend The morgawr [slashdot.org], you share a lot of the same viewpoint.

        First of all, Samsung didn't invent DRAM. Second, this isn't a reasonable reward on investment, it's a price fixing scheme. Third, the government doesn't have to allow you to create a company or use THEIR money at all, they do so for the purpose of having a STABLE economy, not a SUCCESSFUL one.

        In the end, it depends on why you think we bother with having an economy to begin with. From the point of view of the government, it's because

  • So who thinks? (Score:3, Funny)

    by olddotter ( 638430 ) on Thursday October 13, 2005 @03:58PM (#13785210) Homepage
    So who thinks they are guilty of selling memory too cheaply to Apple [ecommercetimes.com]?

    Buy those Nanos while Apple is still getting a good deal on memory. :-)

  • So when will I see my check for 99c ?

    ... Or should I be expecting a coupon for discounted Samsung products ?

  • Thankfully, so is my Senator:
    Senator Cantwell's letter to President Bush [senate.gov] asking for more transparency in the oil market, and an explanation for why oil company profits are so high right now.
  • Great so am I going to see any of that money? The end users were the victims where so should we get compensated? The article mentioned a fine. That's cool and all but is the government going to pocket that money? That seems a bit sketchy to me if that's the case. Let the corporation do something illegal and fleece the consumers out of their money. A portion of that gets paid out as fine. The loser here are the consumers. The government and the corporations pocket the money. Just my cynical side spe
  • Guess I'll have to scrounge up my receipts for the gig of RAM I bought from Crucial several years ago when I had to pay $1 per meg when RAM prices exploded. Maybe I can get reimbursed, but I think it's more likely hell would freeze over first.

  • that fine is a pittance for them. (Score:4, Informative)

    by MMHere ( 145618 ) on Thursday October 13, 2005 @05:54PM (#13786321)
    According to Samsung's 2004 annual report [samsung.com], a $300M fine is pretty much a slap on the corporate wrist for them:

    2004 revenue was just under $122 BILLION, with net income of $11.8 BILLION.

    So the fine is 2.5% of one year's net income, 0.25% of one year's revenue, and a mere 0.14% of their total assets.

    This is incentive against cheating in future? How??

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