Hitachi-LG Data Storage will plead guilty to 15-count felony charge of bid rigging and price fixing of optical disc drives from approximately June 2004 to September 2009. The US Justice Department brought the charges today and will Hitachi-LG will pay a $21 million criminal fine.
According to Justice Department’s press release, “Of the 14 counts, seven charge Hitachi-LG Data Storage with conspiring with others to suppress and eliminate competition by rigging bids on optical disk drives sold to Dell Inc.; six counts charge Hitachi-LG Data Storage with rigging bids on optical disk drives sold to Hewlett-Packard Company (HP); and one count charges Hitachi-LG Data Storage with conspiring with others to fix the prices of optical disk drives sold to Microsoft Corporation. The final count charges Hitachi-LG Data Storage for its participation in a scheme to defraud HP in an April 2009 optical disk drive procurement event.”
The company is a joint venture between Hitachi Ltd and LG Electronics Inc, which was established in November 2000, to develop and manufacture CD, DVD and Blu-ray drives. Its first product was the HL-DT-ST (Hitachi-LG DaTa STorage) GCC-4120 combo drive, which began shipping on June 2001.
The drives produced by Hitachi-LG and sold to Microsoft, Dell, and HP are used in ordinary consumer products, such as computers, DVD players, and video game consoles. These conspiracies undermine competition in the high tech industry
These charges are part of an ongoing investigation by the Justice Department to find antitrust violations within the industry. The charges against Hitachi-LG Data Storage are the first of this probe. According to the plea agreement, Hitachi-LG Data Storage will assist the Department of Justice Antitrust Division in the ongoing investigation of the CD, DVD, and Blu-ray drive industry.