3 to Plead Guilty in Samsung Price-Fixing Case
3 to Plead Guilty in Samsung Price-Fixing Case
By LAURIE J. FLYNN
Published: March 23, 2006
SAN FRANCISCO, March 22 — Three executives of Samsung, the largest supplier of computer memory for consumer electronics, have agreed to plead guilty and serve prison sentences in the United States for their roles in a price-fixing conspiracy, federal prosecutors said on Wednesday.
The plea agreements are the latest development in the Justice Department's three-and-a-half-year investigation of the volatile market for dynamic random access memory chips, the most common type of computer memory products, used in personal computers, printers and electronic devices like cellphones and digital cameras.
Samsung of South Korea, along with its rivals — Infineon Technologies of Germany, Elpida of Japan and Hynix Semiconductor of South Korea — were accused of conspiring to fix DRAM prices from April 1999 to June 2002.
The Samsung executives are the third group of individuals to agree to prison terms; their sentences are similar to those of four Hynix executives announced this month.
Sun Woo Lee, Samsung's senior manager of DRAM Sales, agreed to serve eight months; Yeongho Kang, associate director, DRAM marketing in Samsung's United States subsidiary, will serve seven months; and Young Woo Lee, sales director for Samsung's subsidiary in Germany, agreed to serve seven months. Like the Hynix executives, each executive agreed to pay a $250,000 fine.
In November 2005, Samsung agreed to a $300 million fine related to the investigation. With the latest settlement, 4 companies and 12 individuals have been charged, with fines totaling more than $731 million.
The latest developments illustrate the growing emphasis the Justice Department is placing on prison sentences as a deterrent in antitrust cases.
"These pleas should send a clear message," the attorney general, Alberto R. Gonzales, said in a statement, "that we will hold accountable all conspirators, whether domestic or foreign, that harm American consumers through their illegal conduct."
The Justice Department had named six American companies that were harmed by the price fixing, all of them large customers of DRAM chips: Dell, Compaq Computer, Hewlett-Packard, Apple Computer, I.B.M. and Gateway.
Hynix, the world's second-largest DRAM manufacturer, agreed to pay a $185 million fine in May 2005. In October 2004, Infineon agreed to a $160 million fine. In January, Elpida agreed to a fine of $84 million.
In December 2004, four Infineon executives pleaded guilty to price fixing and served jail terms ranging from four to six months. Each executive also paid a $250,000 fine.
