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Cade condemns companies for international cartel of memory chips

CARTEL

Fines sum up to BRL 7 million
by Assessoria de Comunicação Social published: Nov 24, 2016 06:07 PM last modified: Nov 24, 2016 06:16 PM

During the hearing held on last November 23rd, the Tribunal of the Administrative Council for Economic Defense – CADE condemned the companies Elpida Memory, Inc., Mitsubishi Electric Corp., Nanya Technology Corporation, NEC Corporation and Toshiba Corporation, beyond two individuals, for cartel formation in the international market of Dynamic Random Access Memory – DRAM. The fines imposed sum up to BRL 7 million (Administrative Proceeding 08012.005255/2010-11).

The cartel in the DRAM market was also investigated in other jurisdictions. Several participants of the cartel agreed to plead guilty to participating in a global conspiracy to manipulate DRAM market to US and EU antitrust authorities. They also agreed to pay high fines and to assist prosecutors in the investigation.

Besides, cartel participants faced several claims of compensation regarding damage recovering. In the United States, for example, Hitachi Ltd., Mitsubishi Electric Corp. and Toshiba Corp. payed more than US$ 27 million to settle private lawsuits over DRAM conspiracy.

The Dynamic Random Access Memory are used in personal computers – as PCs, notebooks and laptops –, workstations, mainframes, calculators, GPS devices, game consoles, digital recorders, printing machines and scanners, among other pieces of equipment.

The DRAM cartel affected Brazil and harmed companies that bought DRAM from the parties involved in the cartel as well as final consumers of goods that used DRAM chips in their manufacturing process. The collusion harmed Brazilian and foreign consumers at least between 1998 e 2002.

The proceeding started in 2010 by the former Secretariat of Economic Law of the Ministry of Justice (SDE in its acronym in Portuguese), based on news of cartel condemnations in the US and EU.

Partial leniency

After the formal investigation started, NEC Corporation and individuals entered into a partial leniency agreement with former SDE under which they confessed the participation in the DRAM cartel and provided information and documents involving the conspirators. In return for their cooperation, they were granted a reduction of the fine.

Other companies and individuals involved in the cartel settled to cooperate with CADE through Cease and Desist Agreements (TCC in its acronym in Portuguese). The companies are: Infineon Technologies AG (TCC 08700.001718/2011-07), Samsung Electronics Company Ltd., together with Samsung Semiconductor, Inc. (TCC 08700.003191/2013-09); Micron Technology, Inc. (TCC 08700.001469/2015-75); Hynix Semiconductor Inc. (TCC 08700.004176/2015-40); and Hitachi Ltd. (TCC 08700.003672/2016-67).

The signatories of the TCCs acknowledged their participation in the conduct and committed to cease any anticompetitive practice. In addition, they agreed to cooperate with CADE’s investigations on DRAM cartel. They also agreed to pay nearly BRL 9 million.