States Obtain $90 Million for Consumers Harmed by Alleged Semiconductor Price-Fixing Conspiracy

Attorney General Rob McKenna today announced a $90 million nationwide settlement with Samsung Semiconductor, Inc. and Samsung Electronics Company Ltd. (“Samsung”), resolving allegations that Samsung and others major computer chip manufacturers fixed prices of Dynamic Random Access Memory (DRAM).  

The settlement, which is subject to court approval, provides restitution on behalf of consumers and certain governmental agencies who paid more for computers, servers and other electronic devices because of alleged price-fixing. Samsung has also agreed to strong injunctive relief that will require the company to refrain from conduct that could substantially lessen competition and to cooperate with the states in continuing litigation against other companies.  Samsung admits no violation in the settlement.  A decision regarding how the settlement money will be distributed will not be made until the pending case against other DRAM manufacturers is resolved.  

"As a result of this conspiracy, many consumers and government agencies across the country for years paid inflated prices for computers and other high-tech products containing DRAM,” Attorney General McKenna said.  “This settlement will put a stop to the profiting schemes that victimize consumers, recoup some of those losses and send a strong message to the industry that such behavior is not tolerated.”

Forty-one states and private classes continue to pursue their lawsuit in U.S. District Court in San Francisco, seeking damages, restitution, civil penalties and injunctive relief for consumers and governmental agencies who paid higher prices for electronics from 1998 to 2002 as a result of alleged price-fixing by at least seven more companies including Elpida, Hynix, Infineon, Micron, Mosel Vitelic, Nanya and NEC.

The states’ suit arose from a multi-state investigation that began in 2004, following a federal criminal investigation.  The investigations exposed a scheme where DRAM manufacturers profited at the expense of the consumers in the computer and electronics industry. The states’ complaint lays out details of the conspiracy, including an agreement by industry leaders to trim production in order to artificially raise prices.  

According to the states’ complaint, the defendants violated federal and state antitrust laws by coordinating prices they charged for DRAM. Employees of Samsung, Hynix, Infineon, Elpida have pleaded guilty to federal criminal price-fixing charges and collectively have already paid more than $730 million in fines.  The states' case against the remaining defendants seeks restitution for consumers to repay at least some of the harm caused by the conspiracy

States participating in the lawsuit include Alaska, Arkansas, Arizona, California, Colorado, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.  New York has filed a separate action.
 

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