Samsung’s guilty plea accepted, price fixing case ends

Samsung Electronics Co. Ltd. and its U.S. subsidiary Samsung Semiconductor Inc. on Wednesday ended a U.S. Department of Justice (DOJ) investigation into its participation in an international DRAM (dynamic RAM) price fixing conspiracy by officially entering in court its guilty plea and agreement to pay a US$300 million penalty.

“There has been no change in the terms of the plea agreement or in the companies’ status since the announcement of the plea last October. The plea agreement represents the final resolution of the federal DRAM investigation for Samsung,” said Chris Goodhart, director of marketing communications at Samsung Semiconductor, in a prepared statement.

The fine is the second largest criminal antitrust fine in U.S. history and the largest criminal fine since 1999, according to the DOJ. It also caused Samsung to post a lower than expected third quarter net profit since it had only set aside $100 million for the settlement, the company said in October.

Samsung’s agreement to pay the fine brings to $646 million the total amount levied so far in a U.S. DRAM price fixing investigation that includes companies and corporate executives in several countries.

In May, Hynix Semiconductor Inc. agreed to plead guilty and was sentenced to pay a $185 million fine, while in October 2004, German manufacturer Infineon Technologies AG pleaded guilty and was sentenced to pay a $160 million fine. Several executives from major DRAM companies, including Micron Technology Inc. and Infineon, have served prison sentences or paid fines over the case.

The U.S. government claims the DRAM companies conspired to fix memory chip prices to the detriment of customers including computer and printer makers such as Dell Inc. and Hewlett-Packard Co. The investigation began in 2002, a year after the worst technology industry downturn so far this decade.

The computer companies and the U.S. government maintain that strong DRAM prices hurt business, despite the fact most DRAM makers posted heavy losses during the year in question, 2001, and DRAM prices remained below or near the cost of production for most of the year.

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