Bloomberg News

HP Sues Optical Disk Drive Makers Over Price-Fixing Claims

October 26, 2013

HP Sues Optical Disk Drive Makers on Price-Fixing Claims

HP, in two complaints filed yesterday in federal court in Houston, said Toshiba Corp., Samsung Electronics Co. and LG Electronics Inc. were among the companies that shared confidential information and rigged bids to “fix, raise, stabilize and maintain prices” for the disk drives. Photographer: David Paul Morris/Bloomberg

Hewlett-Packard Co. (HPQ:US), the world’s biggest maker of personal computers, sued optical disk drive companies claiming they conspired to fix prices on billions of dollars in products it bought from 2004 to 2010.

Hewlett-Packard, in two complaints filed in federal court in Houston, said Toshiba Corp. (6502), Samsung Electronics Co. (005930) and LG Electronics Inc. (066570) were among the companies that shared confidential information and rigged bids to “fix, raise, stabilize and maintain prices” for the disk drives.

The defendants, according to the complaints, jointly controlled 90 percent of the market for optical disk drives, which are used to store and replay media and data on CDs, DVDs and Blu-ray devices. Hewlett-Packard’s supply chain (HPQ:US) procurement operation is based in Houston.

“Many of the defendants and their co-conspirators have a long history of collusion; have been involved in antitrust investigations into other technology-related products; and/or have admitted to participating in anticompetitive cartels involving technology-related or other products,” according to one of the complaints filed Oct. 24.

Hewlett-Packard’s lawsuits follow a multiyear probe by the U.S. Justice Department into price-fixing and bid-rigging claims in the industry. Hitachi-LG Data Storage Inc. and four of its executives have pleaded guilty to antitrust violations in the optical disk drive industry, according to the complaint.

Guilty Plea

“The guilty plea that HLDS Inc. entered and press releases that the DOJ issued have specifically identified HP as a victim of price-fixing,” Hewlett-Packard said in one of the complaints.

Hewlett-Packard, based in Palo Alto, California, is seeking unspecified triple damages and injunctive relief under federal antitrust laws and two California statutes aimed an uncompetitive behavior.

John Taylor, an LG spokesman, declined to comment, citing company policy regarding legal matters. Atsushi Ido, a Toshiba spokesman in Tokyo, and Nam Kiyung, a spokesman for Suwon, South Korea-based Samsung, didn’t immediately respond to e-mails after regular business hours yesterday seeking comment on Hewlett-Packard’s claims.

The cases are Hewlett-Packard Co. v. LG Electronics Inc., 4:13-03134, and Hewlett-Packard Co. v. Toshiba Corp., 4:13-cv-03136, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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