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Tech company to plead guilty to price fixing

From Terry Frieden
CNN Washington Bureau

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WASHINGTON (CNN) -- A German manufacturer of technology commonly used in personal computers has agreed to plead guilty and pay a $160 million fine for engaging in an international price-fixing conspiracy that drove up computer prices, the Justice Department announced Wednesday.

Infineon Technologies AG "conspired with unnamed manufacturers" to boost prices of dynamic random access memory (DRAM) sold to computer makers, the Justice Department said.

Government antitrust lawyers identified the firms directly affected by the conspiracy as Dell, Compaq, Hewlett-Packard, Apple, IBM, and Gateway.

"This is very good news for consumers and for businesses," said R. Hewitt Pate, assistant attorney general for the Antitrust Division.

DRAM is the most common semi-conductor memory format, widely used in a variety of computer, telecommunication and consumer electronic products, including personal computers, laptops, printers, modems, mobile phones, digital cameras, video recorders, and televisions. DRAM sales in the United States alone total more than $5 billion per year.

Officials said some computer makers were forced to increase product prices because of the conspiracy, while others decreased the amount of memory used in some products.

The one-count felony charge was filed in federal court in San Francisco Wednesday.

Infineon and other DRAM manufacturers, including Samsung, Hynix and Micron Technologies, also face civil lawsuits in San Francisco.

The Justice Department refused to name firms that allegedly conspired with Infineon in the criminal case announced Wednesday.

The $160 million fine is the third largest price-fixing penalty in U.S. history. It is topped only by the historic $500 million fine against Hoffmann-LaRoche and the $225 million fine against BASF in the 1999 worldwide vitamin price-fixing conspiracy.

More charges could be forthcoming.

"Infineon is the first company to agree to plead guilty in our ongoing investigation," said Deputy Assistant Attorney General James Griffin.

Attorney General John Ashcroft said the action announced Wednesday "sends a message that high-tech price-fixing cartels will not be tolerated."


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