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Fourth Samsung exec pleads guilty to price fixing

Agrees to eight month jail term

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A Samsung executive at the centre of a memory chip price fixing scandal has pleaded guilty and agreed to serve eight months in jail. Thomas Quinn agreed the penalty as part of a plea bargain with prosecutors.

Samsung Electronics is accused by the US Government of driving up the price of memory chips used in PCs and servers, called DRAM. He was accused of violating the Sherman Act.

The US Department of Justice has said that Quinn has agreed to the jail term and fine but that this must now be approved by a federal court in San Francisco.

"Prison time for price-fixers remains the most potent deterrent to illegal cartel activity," said Thomas Barnett, assistant attorney general in charge of the DoJ's anti-trust division. "Today's action sends a clear message – those who engage in price-fixing schemes will be held accountable for their illegal conduct."

Quinn is the fourth Samsung executive to plead guilty in the case. He is the thirteenth person to be found guilty in the probe, which has gathered $731m in fines. Samsung pleaded guilty and paid a $300m criminal fine in 2005.

The DoJ spent more than three years investigating price fixing between DRAM manufacturers between 1999 and 2003.

Other firms which have pleaded guilty include Hynix, which in April 2005 agreed to a $185m fine and Infineon, which agreed to pay a $160m fine in September 2004. In January, Japanese manufacturer Elpida Memory agreed to plead guilty and pay an $84m fine.

The DoJ's case claims that the price fixing scandal affected the businesses of some of IT's biggest names, including Dell, Hewlett-Packard, Compaq Computer, IBM, Apple, Gateway and Sun.

The case against Quinn said he conspired with unnamed employees from other memory makers to fix the prices of DRAM sold to original equipment manufacturers from on or about 1 April 2001 to on or about 15 June 2002, said the DoJ. It also said that he coordinated bids on a 5 December 2001 Sun Microsystems auction.

"Quinn is charged with carrying out the price fixing conspiracy by participating in meetings, conversations, and communications with competitors to discuss the prices of DRAM to be sold to certain customers [and] agreeing with competitors to coordinate bids submitted to Sun Microsystems Inc," said a DoJ statement.

"This is the most recent charge in our continuing efforts to bring to justice both domestic and foreign-based executives who were involved with fixing DRAM prices," said Scott Hammond, the anti-trust division's director of criminal enforcement. "We are still very actively investigating anti-trust violations in the DRAM industry."

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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