Feeds

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

Wants damages from optical drive suppliers

The Essential Guide to IT Transformation

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. ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.