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Dell files suit accusing Hitachi and pals of 'price-fixing conspiracy'

Wants damages from optical drive suppliers

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Dell has filed a lawsuit alleging that six suppliers which manufactured the optical drives used in its computers had illegally agreed to set the components' prices.

In a complaint filed at a federal court in Austin, Texas, the world's third-largest computer manufacturer said it was seeking damages for a "price-fixing conspiracy" that it claimed had taken place from 2004 to 2010.

The court action names several firms and their subsidiaries, including Hitachi Ltd of Japan, Royal Philips of the Netherlands, Lite-On IT Corporation of Taiwan, BenQ Corporation of Taiwan, Sony Corporation of Japan, Toshiba Corporation of Japan and Samsung Electronics Co Ltd of Taiwan.

In the complaint, Texas-based PC baron Dell accused the firms of setting "artificially inflated prices, over several years, of optical disk drives" (ODDs) starting "from as early as" 1 January 2004 until 1 January 2010.

Dell also said the firms had rigged bids and shared information about pricing, sales and production strategies. In this period, Dell said it had spent "billions" of dollars putting the components - which include CD and DVD drives - into its computers.

Dell accuses the companies in the lawsuit of breach of contract and violations of US antitrust law.

In order to "facilitate price coordination", Dell's legal team alleged in the complaint, the defendants entered agreements to set prices of ODDs in the US, meaning that Dell would have paid higher prices than in "a competitive market".

Dell wants compensatory damage for the whole six-year term in which it claimed the price-fixing took place.

The filing added: "During the Relevant Period, the Defendants and their co-conspirators controlled more than 90 per cent of this market."

Back in November 2011, Hitachi-LG Data Storage, Inc, a joint venture between Hitachi, Ltd and LG Electronics, Inc, entered a plea agreement admitting to carrying out bid-rigging and price-fixing of its ODDs. According to Dell's complaint, four executives pleaded guilty to the charges.

HLDSI senior sales manager Woo Jin Yang, also known as Eugene Yang, was sentenced to a jail term and a $25,000 fine. The other three executives, Young Keun Park, Sang Hun Kim and Sik Hur, also pleaded guilty and were handed jail terms between seven and eight months and similar fines.

Dell is currently considering putting itself up for sale. The board are mulling an offer from Carl Icahn and Southeastern Asset Management, while Michael Dell is also working on a plan to take the computer giant private. ®

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