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Are Vendors Engaging In Component Price Fixing?

By Branko Miletic | Sunday | 04/05/2008

SPECIAL REPORT: Following a recent court case in the US, where a number of chip makers have been caught red-handed engaging in cartel-like activity and other unlawful collaborations, the question that immediately comes to mind is how much component price fixing really goes on?


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According to the court case, five officials at four companies have been sentenced to as much as 14 months in prison for violating the US Sherman Antitrust Act by colluding on prices for dynamic random-access memory, or DRAM, chips.

The four chipmakers pleaded guilty and agreed to pay $US732.7 million in criminal penalties for violating the Sherman Act. The companies included the two biggest, Samsung Electronics and Hynix.

But the case itself raises a number of questions, not least of which is: who else in the electronics market is colluding with their competitors?

According to a wide-ranging and special report on Bloomberg.com, US Prosecutors are "now investigating possible price rigging of other components in everyday products in communications and entertainment: personal computers, mobile phones, music players, cameras and monitors for PCs and televisions."

The U.S. Justice Department antitrust case showed that this was far from being an isolated case and the penalties imposed on the chip makers were the highest that US law would allow.

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