Antitrust—Samsung

Korean technology giant Samsung Electronics Company Ltd, along with its American subsidiary, Samsung Semiconductor, Inc., have agreed to plead guilty and pay a US$300 million fine for participating in an international conspiracy to fix prices in the dynamic random access memory [hereinafter DRAM] market.^[1] The fine is the second-largest criminal antitrust fine in US history, and the largest criminal fine since 1999.^[2]

DRAM is the most commonly used semiconductor memory product; it is found in computer, telecommunication, and consumer electronic products such as laptops, workstations, servers, printer, hard disk drives, mobile phones, digital cameras, televisions, and digital music players.^[3] Samsung was charged with one felony count of conspiring with other DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers; the computer makes directly affected by the conspiracy were: Dell, Compaq, Hewlett-Packard, Apple, IBM, and Gateway.^[4]

The conspiracy was carried out by participating in discussions conducted both in the US and abroad about the prices of DRAM to be sold to certain customers.^[5] During those discussions, agreements were made to charge prices of DRAM at certain levels to be sold to certain customers, and price quotations were issued in accordance with the agreements reached.^[6] Furthermore, information on sales of DRAM to certain customers was exchanged for the purpose of monitoring and enforcing adherence to the agreed-upon prices.^[7]

Under the terms of the plea agreement, Samsung has agreed to cooperate in the DOJ’s ongoing investigation of other DRAM producers.^[8]

Antitrust crimes are covered by 15 U.S.C. § 1, which states that every contract or combination, or conspiracy to contract or combine, “in restraint of trade or commerce among the several States, or with foreign nations,” is illegal.

A violation, if done by a corporation, of this section can be punished by a fine not exceeding US$100 million. If it is a natural person who violates this section, he can be punished by a fine of not more than US$1 million, imprisonment for up to 10 years, or both.

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[1] US DOJ, Press Release: Samsung Agrees to Plead Guilty and to Pay $300 Million Criminal Fine For Role in Price Fixing Conspiracy, Oct. 13, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.