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SanDisk subpoenaed in US antitrust probe

Canada, US courts want a piece too

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SanDisk and its CEO Eli Harari have received grand jury subpoenas from the US Department of Justice for possible anti-trust violations in the NAND flash memory market.

The looming probe was disclosed today in a filing with the Securities and Exchange Commission. SanDisk also revealed the Canadian Competition Bureau has begun an industry-wide investigation into anti-competetive activity of flash suppliers in the Frozen North. The bureau wants SanDisk to preserve any records relevant to such an investigation, and the company said it would co-operate fully.

The twin assaults wouldn't be the first antitrust investigation in memory. The DoJ levied over $731m in fines from various companies for DRAM price-fixing last year.

SanDisk also faces a class action lawsuit suit - along with 23 other companies - or alleged conspiracy to fix, raise, maintain and stabilize the of flash memory. The complaint was filed on August 31, 2007 in US District Court in California. It was filed by Stuart Go, and lists as potential plaintiffs all people currently in the US who, from January 1, 1999 through the present, purchased flash memory. Samsung, Toshiba, Hynix, Renesas, Micron, Lexar and Hitachi are included in the defendants' roster.

The lawsuit cites the flash industry's many electronics conventions, industry activities, expos and cross-licensing agreements as a platform for its "cartel activities".

It accuses the flash manufacturers of using these meetings to "exchange and monitor Flash Memory pricing information [and to] communicate their intended prices for Flash Memory to each other.

"This information sharing was intended to, and in fact did, cause the price of Flash Memory to be stabilized and/or artificially inflated in violation to antitrust laws."

The lawsuit seeks to recover unspecified damages, restitution and "disgorgement" of the profits obtained as a result of the claimed practices. ®

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