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EU raids smart card chipmakers

(More) suspicions of price fixing

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At least four makers of microchips have confirmed they were raided by European Commission investigators seeking information of collusion in the market for chips used in smart cards.

STMicroelectronics, Infineon Technologies, NXP, and Renesas Technology each said they received surprise visits from investigators in late October. All of them said they are cooperating with the investigation.

The confirmation came after the EC released a statement Wednesday saying it had carried out "unannounced inspections" of several unnamed chipmakers.

"The commission has reason to believe that the companies concerned may have violated EC treaty rules prohibiting practices such as price fixing, customer allocation and the exchange of commercially sensitive information," the statement read.

If charges are filed, it would by no means be the first time a chipmaker has been accused of burning customers by fixing the prices of its wares. Infineon has already admitted to US charges of collusion in the market for dynamic random access memory chips. Along with Samsung, Elpida, and Hynix, the Germany-based company agreed to pay more than $730m to settle the charges brought by the Department of Justice.

More recently, three Asia-based manufacturers of liquid crystal display monitors agreed to pay $585m after pleading guilty to US charges of collusion.

The EC statement said the raids are a preliminary step in its investigation. Such probes can last years and often don't lead to charges being filed. But when cases are brought and successfully prosecuted, they can result in fines as high as 10 percent of a company's annual revenue for each year of a violation. That's a lot of smart cards. ®

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