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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The sooner optical disks drives go the way of the floppy, the better. The mechano-optical mechanism used in the damn things is just asking to break, and I have had to buy way too many drives over the years because of problems with them. Memory sticks and the internet can distribute anything that you might need to just as easily as a CD or DVD can. Software, music and movies should basically not be getting shipped on the damn things any more, so we can once and for all forget about having to build systems wi
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Yes, let's get rid of the last vestiges of our "ownership" of any kind of media.
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I've had my fair share of optical devices fail, apparently with age. Perhaps it's down to the way in which they were used (sequential rather than random access) but in every case it's been the laser diode wearing out. Symptoms are usually a failure to write first, followed by a failure to read DVD media. I've never held on to one long enough for it to reject CDs, pressed or otherwise. Affected models are two Panasonics (including one slimline slot-loader), one Creative (re-badged I expect), one Pioneer, two
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I think it's more to do the optics going out of alignment or something like that, which is why it starts failing on DVDs first.
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Thanks for throwing your two cents in but regrettably I think you missed the point. The OP argues that the usual cause of failure is the mechano-optical system, by which I assumed he/she meant the laser positioning system. In my experience it's been the laser diode in most cases.
I'm quite aware of how much an optical drive costs, having bought a fair few to replace faulty ones, but I'm interested in how they fail. That's why I care. No-one mentioned cost before you came along.
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My main point is that the god-damned things are flakey and unreliable due to their complexity compared to a memory stick. Perhaps it's the laser that dies, perhaps it's the mechanical parts going out of alignment - perhaps it's just dust building up on the optics - I don't really care, I just know that CD/DVD players just generally suck - and not just PC ones. I have had several stand-alone DVD players die too, as well as a few old school boom boxes that work fine except for the broken CD player. (ie. tape
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The surprise is not that there is criminal corporate behavior. The surprise is that the Department of Justice actually did their job and prosecuted it.
More like this, please. A lot more.
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So since they're OEM, without the overhead of retail sales and packaging, that means the prices are fixed at what, $15 per unit? God, and I thought Intel was bad at price-fixing!
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Last I checked [pricewatch.com] you can get a DVD-RW for $19.98 and go Blu-ray for $10 more.
Wow, I see +$20, but yeah, that's worth it for my next drive purchase.
Is ripping all sorted out on linux at this point? I buy plenty of DVD's, but put them into storage once the data is safely on seekable storage. Might be time to step up to BluRay.
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Not really. The only ripping I've had that is pretty solid is AnyDVDHD, and that's Windows-only AFAIK.
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Of course this doesn't happen in practice which is why we should have a communist state.
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So in that case why did Russia have a leader? Why did their army have a command structure? How did they get into space without desire and ambition. In other words, you don't know what you're talking about.
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Because Soviet Union was not a communist state. It never even claimed that it was one, in fact. It was the Union of Soviet Socialist Republics.
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So what? In practice it was communist.
How do we know this? Well, for starters, it was a single party state ruled by the communist party. The economy was fully state managed, just like a communist state. Human freedom was substantially curtailed, just like a communist state.
Soviet Union was ruled by a Communist party, because the official goal of the state (which was "guided" by the Party) was to build communism - eventually. It was always some time in the future, just around the corner - usually in about 20-30 years or so.
However, the state itself was socialist, and that is how it always described it. That is precisely why it had government, courts, laws etc. It's also why it had money. "From each according to his abilities, to each according to his contribution" was the pri
Oh! (Score:1)
Oh, dear!
Being European, let me tell you how political beliefs are classified:
Those who call themselves "right-wingers", are actually far-right nationalists.
Those who call themselves "christian democrats" are actually neo-libertarians right-wingers.
Those who call themselves "socialists" or "social democrats" are actually right-wingers
Those who call themselves "left-wingers" are opportunistic parties, hoping to catch some votes here and there.
Those who call themselves "communists" are communists who want soc
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Being Russian (and I think you're mistaking me for an American), let me tell you that your nationality does not have anything to do with how the terms are properly defined.
Socialism as an economic system has a very simple definition: it's when ownership of the means of production is cooperatively held, normally by people who use them. In anarchist strains of socialism - anarcho-syndicalism etc - this is believed to be the natural state, where workers directly govern and run factories etc, with no state to m
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No, I didn't misunderstood you for American. The American Coward talking some nonsense about large intestines is probably an American.
In Europe, some countries, like the Scandinabian ones, have strong welfare systems.
They have private enterprises, but they are strongly regulated, and workers have many rights, unheard to Americans.
Critical industry, like power grid, defense, are owned by the state.
I would call them 'mixed economies'.
In western bloc, christian democrats vs. socialists are like republicans vs.
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In Europe, some countries, like the Scandinabian ones, have strong welfare systems.
They have private enterprises, but they are strongly regulated, and workers have many rights, unheard to Americans.
Critical industry, like power grid, defense, are owned by the state.
I would call them 'mixed economies'.
"Mixed economy" is a valid term, and reasonably descriptive, but it doesn't mean "mixed between capitalism and socialism". It means "mixed between state and private ownership", or alternatively "mixed between planned economy and free market".
In western bloc, christian democrats vs. socialists are like republicans vs. democrats in America.
They both support capitalism, but socialists are milder.
When I said that "socialists" in Europe have nothing to do with Marxism/Leninism, I meant that "socialists" here support private enterprise,
diminish the role of the state, support the freedom of enterprise, support lower taxes on the rich and have unfavorable laws for workers.
Yes, this is what they call "democratic socialism" these days. It's a historic label - most of those parties used to be real socialists back in early-to-mid 20th century, but Soviet Union going totalitarian and otherwise nasty scared a lot of people off, and pendulum sw
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By the way, going with colloquial definitions also means that you have large swaths of political spectrum uncovered - if "communism" is USSR/China/Cuba/..., and "socialism" is what you now have in Greece, then what do you call guys such as real democratic socialists (those who want cooperative ownership of industry, but true democracy unlike USSR), or Luxembourgists and other non-Leninist, democratic Marxists, or anarcho-syndicalists and libertarian socialists? All these groups have far more in common between each other, and in the traditional scale that I'm using, they would all be properly called socialist.
I am unaware of those theories. I've never heard of them. Are you sure they exist now?
I am aware of some people called "4th internationalists" or "Trotskysts" but their impact is below minimal. They received well below 0.1%. Nobody knows them, I don't even know how officially name their party. Apart from them there are some parties claim to be communist. But all of them receive around 0.2%.
So, in western bloc, these have no name at all. We can call them collectively "left-wingers"
Have you studies political
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Human freedom was substantially curtailed, just like a communist state
That actually reminds me of American foreign policy of the past decades on Latin America...
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Just for shits and giggles: how would you ensure that something like this emphatically won't happen? No, you can't use the government for this, because that will be an expansion of government.
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The market will magically create competitors out of nothing and the cartel/monopoly will do nothing to prevent it.
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How does that apply here?
Patents aside, optical drives use ultra-precise elements, blue light laser that is capable of picking data 0.0003 millimeters apart, 400,000,000 times per second.
It's not like once the few competing firms fix price at $20, a garage competitor is gonna jump in and offer their blu-ray drives at $15, coming ahead of the price-fixing cartel.
Free market requires the law of big numbers to work. Say, one in 100 competitors decides to break out of a price fixing scheme, gets desperate and s
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Can't happen if there's 100 or more of them. But one... can be dealt with.
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Re:Free Market capitalism (Score:4, Insightful)
Adam Smith, who made the case for market economies creating public good without meaning to, also worried about businessmen conspiring to gouge the public. At a guess, he would have approved of antitrust laws.
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At a guess, he would have approved of antitrust laws.
But I'm not so sure he would agree that they should be modeled as they are currently.
It's silly to me that when corporations are found guilty of stuff like this that they simply receive a fine.
If this were a person, they would receive the fine as well as possible prison time.
Where is the corporate prison time? I'm not so sure large corporations would be as interested in breaking the law if they knew it was going to cost them 18 months of lost sales.
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Smith wrote a book prior to the Wealth of Nations advocating a better morality for dealings in this world. Smith if anything would have advocated for a harsher fine & perhaps forfeiture of property or profit.
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well I have no problem with cartels as long as it is not a 'natural monopoly' like telecom.
If Hitachi and LG rig their prices too high, all their buyers (HP, Dell...) will take note. If the price gets too high, they will setup their own optical manufacturing.
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Unless you're willing to ban patents, they may not be able to set up their own manufacturing without the cooperation of the companies that are already conspiring against them.
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When the punishment for the crime is far lower than the profit made from it, crime will be common. I wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
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I wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
How do you have government-mandated liabilitiy limits in a free market?
Ah, you can't.
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Sounds good to me. Hope you don't want to own any stock in those companies, because as an owner you will be liable for its losses.
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Sounds good to me. Hope you don't want to own any stock in those companies, because as an owner you will be liable for its losses.
Imagine that - incurring both the risks and rewards. It's almost like ... being an owner!
Oh, right, government exists to socialize the losses for corporation owners, I forgot.
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yeah, the alternative to the 'free marketteers' is a system where everything is price-fixed and everyone rips off everyone.
That's what the public sector is, and unions... massive price fixing schemes to benefit those in those institutions at the expense of the public.
Rail against 'the market' if you want... chances are what you advocate is worse.
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I wonder if the free marketeers on here think that limited liability, that outrageous interference in the market, should be done away with.
There is more than one aspect to limited liability. Limitations on liability for harm done to people who did not choose to involve themselves with your company is clearly a problem. If someone harms you, even by accident, you have a right to be "made whole", and in the case of a corporation you should be able to hold not just the organization but the people behind it responsible for the injury.
Fortunately, in the cases where monetary compensation is insufficient and/or the organization lacks the resources t
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Who enforces the contract?
Charter Suspension (Score:2)
Now, I suppose I'll have to RTFA to find out which CEOs or mid-level executives are going to prison in addition to the fine. I mean, 15 felony charges, there's gotta be a list of names, right?
CEO's and executives are disposable. What absolutely must not happen is that the corporation be held liable (i.e. corporate charter suspension). That corporations are afforded the benefits of personhood but never* incur the risks (jail time, execution) is evidence enough that the government is a corporatocracy.
* I di
Co-Conspirators? (Score:1)
You can't price-fix without at least two parties. Anyone know who the co-conspirator(s) are?
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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.
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Life's Good! (Score:2)
Smithers, my wallet! (Score:4, Interesting)
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.
Re:Smithers, my wallet! (Score:5, Informative)
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!
any chance that $21M finds its way back to us? (Score:2)
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.
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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.
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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.
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Of course that is true, blame the DOJ. They cannot however regain these losses by raising prices now.
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> One word: Monorail!
Ok, ... monorail.... monorail... um, monorail... Ok I don't get it. I haven't been to Disneyland in years.
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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....
This is because intel was not fucked up (Score:1)
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
Now how about those ISPs now? (Score:1)
We know they have been doing this shit for so god damn long now it hurts.
Why aren't they fixing that crap already?
Must be nice. (Score:3)
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No one forces them to compete in this market if they don't like it let them stop making them. I will not feel bad for someone who tried to ripoff consumers to make a quick buck.
We shouldn't be too eager to do this! (Score:3)
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.
Time, they are a changin (Score:1)
criminal corporations (Score:2)
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.
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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.
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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
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While true, this is oversimplified.
Money is easy to simply figure into the cost of operating, and that's exactly how corporations deal with fines. I've had enough closed-door meetings with C-Level executives where these things were quite openly discussed.
Getting put in jail is, to appropriate the business terms for a person, an interruption of operating. You can't simply include it and otherwise proceed as normal. More importantly, it also effectively prevents you from committing further crimes, at least fo
275x SPEED (i DON'T FSCKING CARE) (Score:2)
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....
subject (Score:2)
Let this slap on the wrist be a lesson to you, Hitachi-LG!
Well, duh... (Score:2)