Infineon to pay $160m fine for DRam price-fixing

Infineon Technologies, a German manufacturer of DRam (dynamic Ram) has pleaded guilty and will pay a $160m (£90m) fine for...

Infineon Technologies, a German manufacturer of DRam (dynamic Ram) has pleaded guilty to attempting to fix prices in the DRam market and will pay a $160m (£90m) fine, the US Department of Justice announced.

The fine, the third largest criminal fine in the history of the DOJ's Antitrust Division.

The DOJ charged Infineon with violating the Sherman Antitrust Act by conspiring with unnamed DRam manufacturers between July 1999 and June 2002 to fix prices on DRam sold to computer and server suppliers.

Infineon has also agreed to co-operate with the DOJ in its ongoing investigation of other DRam manufacturers. Robert LeFort, president of Infineon North America, said he could not comment on whether he expected other DRam manufacturers to face similar charges.

The settlement was in the best interest of stockholders and the company, an Infineon spokesman said. The settlement shows the company has "taken seriously" internal concerns about its corporate governance, said Christoph Liedtke, the Infineon spokesman.

The company has conducted employee training, created corporate compliance guidelines and appointed a legal compliance officer in response to the DOJ investigation, LeFort said.

"It really was strengthening up the safeguards within the organisation so something like this cannot happen again," LeFort said.

Infineon does not plan additional changes to its business in response to the plea and fine, LeFort added.

"[The investigation] was somewhat of a drain on resources," he added. "We're very happy to have it behind us and focus on the business of competing with our technologies and products. It's going to be business as usual to support our customers and grow our business."

The computer makers directly affected by what the DOJ calls a "price-fixing conspiracy" were Dell, Compaq Computer, Hewlett-Packard, Apple Computer, IBM and Gateway. Infineon has contacted the affected companies and has settled claims or is in the process of settling claims, according to the company.

"Infineon strongly condemns any attempt to fix or stabilise prices," the company said. "Infineon is committed to vigorous and fair competition based solely on superior products and services."

Infineon's guilty plea follows years of allegations about DRam price-fixing. The DOJ began investigating DRam price fixing in 2002, and in May, Rambus filed an antitrust lawsuit against four companies, including Infineon, accusing them of banding together to eliminate competition.

The Rambus suit was filed against Infineon, Hynix Semiconductor, Micron Technology and Siemens. It alleged that executives from those four memory suppliers colluded to set cost parameters for Rambus' RDRam (Rambus DRam) product and to restrict output of that product in order to raise its price and kill its chances of becoming a mainstream memory technology.

In December 2003, the DOJ charged Alfred Censullo, a regional sales manager for Micron, with obstruction of justice in connection with its investigation of possible price fixing in the DRam market. 

In January, Censullo, who was the first person to be charged in the ongoing investigation, pled guilty to the charge and admitted to having withheld and altered documents in response to a grand jury subpoena served on Micron in June 2002, according to the DOJ. Censullo is scheduled to be sentenced later this year.

Grant Gross writes for IDG News Service

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