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Hitachi-LG Fined $21M For Price-Fixing Optical Drives 98

wiredmikey writes "Hitachi-LG Data Storage, a joint venture between Hitachi and LG Electronics, has agreed to plead guilty and to pay a $21.1 million criminal fine for its part in a scheme to rig bids and fix prices of optical disk drives. According to the Department of Justice, the company had conspired with others to rig the bidding process on optical disk drives sold to Dell, HP, and Microsoft. Court documents show that Dell and HP hosted optical disk drive procurement events in which bidders would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked."
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Hitachi-LG Fined $21M For Price-Fixing Optical Drives

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  • You can't price-fix without at least two parties. Anyone know who the co-conspirator(s) are?

    • by vlm ( 69642 )

      You can't price-fix without at least two parties. Anyone know who the co-conspirator(s) are?

      According to the charge, Hitachi-LG Data Storage executed the scheme through interstate communications, including an email sent by one of its employees to co-conspirators in San Jose, Calif., and the Republic of Korea, that contained first round bidding results and non-public, competitively sensitive information relating to the April 2009 event.

      So, how many places in San Jose make optical drives? RoK is kind of vague, San Jose not so.

  • When you're fixing prices
  • Smithers, my wallet! (Score:4, Interesting)

    by Tharsman ( 1364603 ) on Monday October 03, 2011 @03:55PM (#37592866)

    This reminds me an episode of the Simpsons where Mr Burns is found guilty of some crime and asked to pay some "huge" amount, and he asks Smithers to get him his wallet and pays the fine cash as if nothing happened.

    • by Anonymous Coward on Monday October 03, 2011 @04:08PM (#37593004)

      Judge Snyder: Mr. Burns, in light of your unbelievable contempt for human life, this court fines you $3million.
      Montgomery Burns: Smithers, my wallet's in my right front pocket.
      [Smithers hands over the money]
      Montgomery Burns: Oh, and I'll take that statue of justice too.
      Judge Snyder: Sold!

  • I'm wondering where the money goes. I could use another optical drive right now. Or does Hitachi-LG just pay it and then raise prices to compensate? That would make the score something like Hitachi-LG 0, government 1, users -1.

    • by h4rr4r ( 612664 )

      Here is how it works in reality:

      LG can't raise prices or you would buy the drives from a competitor so they have to eat the loss. If they could raise the price on these drives they would have already.

      • by sjames ( 1099 )

        So you're saying they have to step up their price fixing efforts?

        Of course, the way it actually works is that they made more than the amount of the fines by price fixing in the first place, so they just write it off as a cost of doing business.

        • by h4rr4r ( 612664 )

          Of course that is true, blame the DOJ. They cannot however regain these losses by raising prices now.

    • One word: Monorail!
    • I could see the government pocketing the money, then turning to say:
      "Good news, America! We're lowering your taxes by $21 million!!"
      Of course, without actually lowering anything....

  • when it came out that they paid pc manufacturers to not use its competitor's cpus. or, when it came out that flat-panel lcd manufacturers fixed prices in usa.

    all they got was a small 'fine' compared to the profits they made from the deal. aaaaand - voila - other companies did similar things too. why not just pay $21 million fine, making hundreds of millions or even billions in the process ?

    if intel got a major hit, other companies would not dare doing the same. but see, they made PROFIT out of their b
  • by Anonymous Coward

    We know they have been doing this shit for so god damn long now it hurts.
    Why aren't they fixing that crap already?

  • by Beelzebud ( 1361137 ) on Monday October 03, 2011 @04:21PM (#37593120)
    It must be nice to be part of a huge corporation where no one has to worry about going to prison when they rip off a few million dollars from the public.
  • by Artifakt ( 700173 ) on Monday October 03, 2011 @04:27PM (#37593180)

    There are objectively defined cases of price fixing, and this particular case seems to fit the definition. I'm not particularly trying to take heat off Hitachi in what follows, but it needs to be pointed out:
              Whenever a tech industry member gets charged with price fixing, anti-trust, violating export restrictions, or similar, remember, the way the US government calculates the inflation rate, they include an adjustment to new tech for the new features. The way the formula works, if a basic laptop computer sells for, say, $499, and two years later, one still sells for $499, but the DVD reader has been upgraded to a Blue Ray reader for entry level models, the formula counts that as deflation, making the overall inflation rate lower. Pushing tech companies to stop price fixing, while ignoring price fixing by, say, kid's cereal makers, will make the inflation rate look a little better, while the reverse isn't usually true with the formula adjustments now used. Many parts of the financial sector benefit from the claim that inflation is low, as do those political factions that don't want COLAs for social security. If you really tally up just who would prefer the government investigate Microsoft, Sony, Hitachi or AMD, vrs. investigating, say, Caterpillar Tractor, Tesla Motors, General Mills, Walmart or Archer Daniels Midland, you can see some real pressure to pursue some investigations thoroughly and drop others quickly.

  • When I look at the prices of the items I think to myself, WOW how much cheaper can this crap get?!? My first CPU was an 8080 and I paid over $300, my first LCD was $3300 and my first read only caddy 1x cd drive was $400. I paid $1000 for 48k of ram for my Apple II. I am old :-/
  • The problem is that "criminal" is a meaningless term when it comes to corporations. Or have you ever heard of a corporation being put in jail?

    No, a corporation will pay a fine. "Criminal" carries a much higher threat value for real persons, who can be put away.

    • by Lehk228 ( 705449 )
      "Criminal" for corporations should be handled as probation, where a corporation once convicted or pleads guilty and put on probation for a term, during that term has no privacy or right to refuse inspection or investigation by government officials. This would extend to all operations and investigations of all things not just ones related to the original complaint. Just like a probationer or parolee has essentially no right to refuse any level of investigation by their PO.
      • by Dahamma ( 304068 )

        And if the corporation refuses? Find them in contempt, and put them on probation... Oh, wait, then we're back where we started. The whole point of a corporation is "limited liability", and until something is done about that (ie. stop pretending people aren't making the decisions) nothing will change.

        • by Tom ( 822 )

          There are already specific points at which a corporation does not protect its executives or owners. And yes, whenever such a thing comes up in court, it works like a charm.

          There's a story about a major german corporation, one of the biggest in fact, that simply refused to comply with some legal requirement, exhibiting a pretty open "so sue me" attitude. Well, someone did. Corporation prepared to laugh it off, put a bit of money on the side to pay the fine and otherwise ignore the matter.
          Judge didn't like th

  • All the recent burners I've bought list super-helicopter-ready speeds... Can I have one that is silent?

    I don't fscking care if it's 2X read, I don't want to have to listen to it on a take off. (yes, I know, Nero Speed and some other software might take care of that, but I don't need/want them)

    Anyways, burning at those speeds will only introduce more errors....

  • Let this slap on the wrist be a lesson to you, Hitachi-LG!

  • It's little wonder HP wanted to charge me nearly $500 for a replacement laptop DVD burner (for me to install myself) when one alone can't be more than $75 in total manufacturing costs (including profit).

Truth is free, but information costs.