Samsung Pays $300m for Price Fixing

Samsung accepted terms of a plea agreement Thursday that finds the electronics company guilty of conspiring with other manufacturers to artificially inflate the cost of computer memory, thus unnecessarily increasing the prices consumers paid.

As part of the agreement, Samsung would pay a $300 million fine in exchange for prosecutorial immunity for both the company and most of its employees. Seven people, including president of the semiconductor division Y.H. Park, were excluded from the settlement and could still face prosecution.

Samsung is the third company after Hynix and Infineon Technologies to be indicted and fined by the government. A fourth, Micron Technology, was cooperating with the U.S. Department of Justice and likely would not be fined.

The settlement brings to a close an investigation into Samsung's actions from 1999 to 2002 where it colluded with other memory chipmakers to keep prices artificially high. Memory remained expensive even while the tech industry crumbled, raising eyebrows at the Justice Department and spurring an investigation in 2002.

Restitution arrangements were not part of the settlement, and the government has indicated that it will allow affected companies to sue Samsung independently of the government case.

So far, victims of the price fixing have been identified as Dell, Compaq, HP, Apple, IBM and Gateway. At least two of the companies, Apple and Dell, raised prices on their computer systems while others reduced the amount of standard memory.

Thursday's developments could give a boost to a private antitrust suit brought by Rambus. In the mid 1990s, Intel licensed technology from the company to make computers based on their Pentium 4 chip run faster.

Chipmakers scoffed at the idea of paying Rambus royalties, and the cost of DRAM technology began to fall. By 2001, the price had fallen so much that Intel decided to support non-Rambus based technology.

Following the announced switch, prices of memory increased sharply, and in 2004 Rambus sued several of the chipmakers.