Bloomberg News

Hitachi-LG Venture to Pay $21.1 Million in Bid-Rigging Case

September 30, 2011

(Updates with computer makers that were focus of alleged price fixing in second paragraph, Pozen comment in third.)

Sept. 30 (Bloomberg) -- Hitachi-LG Data Storage Inc. agreed to plead guilty and pay a $21.1 million fine for bid-rigging and price-fixing involving optical disk drives, the Justice Department said.

In a 15-count felony charge filed today in federal court in San Francisco, the government said Hitachi-LG conspired with other companies from June 2004 through September 2009 to rig bids and fix prices for optical drives to be sold to Dell Inc., Hewlett-Packard Co. and Microsoft Corp. Hitachi-LG is a joint venture of Tokyo-based Hitachi Ltd. and Seoul-based LG Electronics Inc.

The company “undermined competition and innovation in the high tech industry,” Sharis Pozen, acting head of the Justice Department’s antitrust division, said in a statement.

The charges are the first in the department’s investigation of the optical disk drive industry. Hitachi-LG has agreed to cooperate in the continuing probe, the department said.

Hitachi didn’t respond immediately to an e-mail request for comment. Kim Regillio, a spokeswoman for LG Electronics USA, didn’t immediately respond to a phone call seeking comment.

Types of optical disk drives include CD-ROM, CD-RW, DVD-ROM and DVD-RW.

Hitachi-LG discussed with rivals what prices they would bid before entering competitions for business, the Justice Department said. The company is charged with one count of wire fraud for sending co-conspirators an e-mail with the first-round results of a bidding process held by Hewlett-Packard, according to the department.

The plea agreement is subject to a judge’s approval.

--Editors: Jim Rubin, Ann Hughey.

To contact the reporter on this story: Jeff Bliss in Washington at jbliss@bloomberg.net;

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net


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