Samsung Electronics Co, the world's largest maker of computer memory chips, pleaded guilty to a charge it participated in a worldwide price-fixing conspiracy that damaged competition and raised personal computer prices.
After accepting the plea and a previously arranged deal with prosecutors, US District Judge Phyllis Hamilton on Wednesday ordered Samsung and its US subsidiary, Samsung Semiconductor Inc, to pay US$300 million -- the second-largest fine in a criminal antitrust case.
It was the culmination of a three-year investigation into price fluctuations in the dynamic random access memory market from April 1999 to June 2002. Prosecutors said Samsung, which is based in Seoul, South Korea, and other companies conspired in e-mails, telephone calls and in meetings to fix the price of chips used in personal computers and other electronic devices.
Earlier this year, Seoul-based Hynix Semiconductor Inc agreed to pay a US$185 million fine; rival Infineon Technologies AG of Germany agreed to pay US$160 million last year. A fourth chip maker, Micron Technology Inc of Boise, Idaho, has been cooperating with prosecutors and was not expected to face charges.
On Wednesday, Samsung Semiconductor's chief financial officer, Dahm Huh, spoke on behalf of the company and answered a series of routine questions about the defendant's ability to pay, the company's understanding of the deal and the waiving of various rights.
Huh answered "yes" or "no" to the questions but offered no elaboration and did not speak to reporters after the hearing. The company's spokeswoman, Chris Goodhart, also declined to comment afterward.
The plea deal, which was announced in October, requires the company to pay US$300 million, plus interest, in installments over the next five years. The government agreed to not pursue additional prosecutions against Samsung or most its officers and employees.
Seven people, including Samsung Semiconductor President Y.H. Park, are specifically excluded from such protection and could still face prosecution.
The others are Tom Quinn, senior vice president of sales and marketing for memory products; marketing vice presidents Kim Il-ung and Kang Yeong-ho, and memory chip sales vice presidents Lee Sun-woo and Lee Young-woo. The seventh, Rha Young-bae, is no longer with Samsung.
The deal also did not seek restitution from Samsung. Instead, victims -- ranging from other chip makers and computer makers to private individuals -- can sue for damages.
"We're letting that be the vehicle for victim compensation," Lynch said outside the courtroom.
Victims, according to federal prosecutors, included Dell Inc, Compaq Computer Corp, Hewlett-Packard Co, Apple Computer Inc, IBM Corp and Gateway Inc.
Apple and Dell raised PC prices to compensate while others reduced the amount of memory installed on their systems to compensate.
The US Justice Department investigation began in 2002, a year after memory chip prices began to climb even though the rest of the tech industry was suffering its worst downturn in history. At the time, then Dell CEO Michael Dell blamed the high prices on cartel-like behavior.
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