Korea’s Hynix to pay $185 million to settle price-fixing probe

April 22, 2005 – South Korea’s Hynix Semiconductor agreed to pay a $185 million fine to settle allegations that it participated in a global price-fixing conspiracy, US Justice Department officials said Thursday, reported the Agence France-Presse.

Hynix agreed to plead guilty to a single count of participating in an international conspiracy to fix prices of dynamic random access memory (DRAM) chips. Hynix’s penalty is the third-largest criminal antitrust fine in US history and the largest in five years, the Justice Department said.

The agreement follows a deal involving German microchip giant Infineon Technologies, which reached an accord last year with US authorities and was followed by plea agreements that sent four of its executives to prison.

“Price fixing imperils free markets, impairs innovation and harms American consumers,” said Attorney General Alberto Gonzales.

“Today’s charge and its resulting guilty plea are another significant step forward in the department’s ongoing fight to break up and prosecute international cartels that harm American consumers. This case shows that high-tech price-fixing cartels will not be tolerated.”

According to authorities, Hynix executives participated in “meetings, conversations and communications in the United States and elsewhere to discuss the prices of DRAM to be sold to certain customers” and agreed with competitors to fix prices.

Hynix agreed to cooperate with the continuing investigation, which could involve other firms.

According to the one-count felony charge filed in the US District Court in San Francisco, Hynix conspired with others to fix prices of DRAM chips from April 1, 1999, to June 15, 2002, in sales to computer and server manufacturers.

The customers directly affected by the price-fixing conspiracy, according to the Justice Department, were Dell, Compaq, Hewlett-Packard, Apple Computer, IBM and Gateway Inc.

“This case illustrates the international scope of our criminal investigations and underscores the importance of looking beyond our nation’s borders to prosecute and deter cartels that harm American consumers,” said R. Hewitt Pate, head of the Justice Department’s antitrust unit.

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