Infineon Execs Plead Guilty to Price-Fixing 195
An anonymous reader writes "Executives at Infineon Technologies plead guilty to an international conspiracy to fix prices in the DRAM market. Heinrich Florian, Günter Hefner, Peter Schaefer and T. Rudd Corwin, executives for Infineon Technologies, had a felony filed against them yesterday in the U.S. District Court in San Francisco. Each executive could spend up to six months in prison and will have to pay a $250,000 fine. Under the plea agreement, they must also assist the government in its DRAM investigation. Infineon agreed in October to pay a $160 million fine for its role in the conspiracy, according to the Justice Department."
An honest question.. (Score:5, Insightful)
Re:An honest question.. (Score:2, Insightful)
My understanding is this has been going on for a long time. How would we determine what market rates should be?
Re:An honest question.. (Score:5, Insightful)
Re:An honest question.. (Score:1)
Of course not. (Score:2)
Re:An honest question.. (Score:3, Interesting)
Re:An honest question.. (Score:2)
Re:An honest question.. (Score:5, Insightful)
Between shady deals with prosecutors, early parole, and the favors their money can buy, I don't think he'll actually be in for 6 months. If he iis, I'm sure it will NOT be in a hard-core prison.
Young black male convicted of $1,000 robbery: 20 years hard time.
Rich white exec, convicted of robbing millions of people out of billions of dollars: a few months in minimum-security.
And they have the gall to call themselves the "Justice Department".
Re:An honest question.. (Score:4, Informative)
Re:An honest question.. (Score:3, Interesting)
The really sick thing about it is given the conditions in the 'prison' they will be in, a great many people would line up for a free six month stay there if it were offered. There are no bars, just a hedge outside you're not supposed to go past.
They can't have prisons like that for everyone because too many people would deliberatly get caught so they could go there.
Personally, I believe that no prison should be anything but civil to live in nor better than the conditions the poorest law abiding citizen li
Re:An honest question.. (Score:2)
Not all fed prisons are min security.
I'm aware of that. However, all of the federal prisons rich white guys who commit white-collar crimes might go to ARE minimun security.
Re:An honest question.. (Score:2)
I guess a different one than Martha Stewart.
Re:An honest question.. (Score:3, Interesting)
Which is why its high time for Uncle Sam to start revoking corporate charters for misbehaving corporations.
That just made me think
Re:An honest question.. (Score:2)
Re:An honest question.. (Score:2)
Re:An honest question.. (Score:5, Insightful)
Re:An honest question.. (Score:5, Informative)
Re:An honest question.. (Score:5, Funny)
Re:An honest question.. (Score:2)
I think it was DDR. Make that $500K.
Re:An honest question.. (Score:3, Informative)
But yes, it is crazy to let the actual people who did this off with such a slap on the wrist. They ikely will still draw their fat cat pay checks while in prison if they ever do go too!
Re:An honest question.. (Score:3, Informative)
Re:An honest question.. (Score:3, Insightful)
Oops (Score:1)
Re:An honest question.. (Score:3, Insightful)
I dislike President Bush the Chimpanzee (thank god he's not black or I couldn't get away with saying that no matter how much he looked like a monkey) as much
Re:An honest question.. (Score:2)
Re:An honest question.. (Score:2)
That's better than the $1 per person fine that executives of GM, Firestone, Standard Oil and Philips Petroleum got for being found guilty of conspiracy when they destroyed mass transit systems all around the nation back in the late fifties.
Re:An honest question.. (Score:2)
For us, thats like getting hit with a fine of two year's take home salary (like maybe $80k to $100k - I said take home, not gross.) Not something that would destroy us
Re:An honest question.. (Score:2)
Re:An honest question.. (Score:2)
translation (Score:5, Insightful)
This translates into:
Infineon stole so much that they could easily pay a $160 million cut to the government, who wanted their share, even though they did nothing to deserve it. In return they let the company continue to do business as usual, and suggest that they price fix in less obvious ways next time. They also asked the company to offer up a few scape goats, who would get a token amount of time in a federal luxury prison like Camp Cupcake or Club Fed, but would be out in even less time than Martha Stewart. The people who bought the artifically high priced memory get screwed.
Re:translation (Score:1)
Re:translation (Score:2, Insightful)
You are aware that a supply/demand graph is continuous and it's not that you hit the optimal point and everyone buys your product.. right?
So there were people willing to buy, but the point is that even though someone else *could* sell for less, they agreed to keep it artificially high. That's collusion against the free market. The point is to let the market decide what the price should be through competition, not some asshats who are a
Re:translation (Score:5, Insightful)
Re:translation (Score:2)
Re:translation (Score:2)
Yes and no. Technically you are correct... paying the inflated price is a better alternative than being denied the benefit of what you're paying for. Such as if a family member were dying in hospital and your car runs off the road into a ditch. That $2000 bill from the tow truck who just happened to be the only one available may be overpriced relative to
Re:translation (Score:2)
who would get a token amount of time in a federal luxury prison like Camp Cupcake
Not federal pound-me-in-the-ass prison?
Rambus purchasers should pay attention (Score:1)
Rambus said that Rambus memory should have been priced only slightly higher than SDR SDRAM, based on manufacturing and licensing costs, and that they were always clear with JEDEC on what patents they held and what licensing terms they
Re:Rambus purchasers should pay attention (Score:2)
Re:Rambus purchasers should pay attention (Score:2, Informative)
The price fixing that Rambus alleged was a conspiracy to charge much more for Rambus memory than a competitive market would. Since the same group of companies controlled the supply of both types of memory, they could do this. Rambus claimed that Rambus memory s
Re:Rambus purchasers should pay attention (Score:2)
Re:Rambus purchasers should pay attention (Score:2)
There are similar investigations underway in Europe and Japan. Infineon isn't done yet, but they got some leniency from the Dept. of Justice for being the first squealer. Still, when is the last time you heard about executives doing jail time for something like this? And the shareholder and consumer class acti
Re:An honest question.. (Score:2)
Well actually, given that the price-fixing was them holding the prices artificially LOW, I think the question ought to be will you be paying the extra amount (the difference between what you paid and what they should have charged) on those underpriced memory devices...
In the mean time (Score:1)
Flash: Greed comes to Man Kind (Score:4, Interesting)
The rest of the world is getting obese just like Americans... everyone is greedy to a point. Some are just able to carry their greed to the point of complete selfishness and totally ignore the high percentage of people who have a hard time just keeping a roof over their heads.
What the heck will it take? Evolution of the human species? I always think back to those old Star Trek episodes where they land on some planet where the inhabitants laugh kindly at Earth's culture because they have learned to live without greed, take care of everyone, and actually enjoy sex rather than codify it.
I don't know why I want to write this... mod at your leisure.
Re:Flash: Greed comes to Man Kind (Score:1)
Back pre-rennaissance, pride was shunned. It was the highest sin against god, it was what got us kicked out of eden. (if you believe in the bible, I dont personally but it has some interesting reading in it)
We could make it possible again where society shuns pride and earthly possessions, however, not everyone will do it, and the ones that won't will take advantage of everyone else. How
Re:Flash: Greed comes to Man Kind (Score:1)
Re:Flash: Greed comes to Man Kind (Score:2)
For some people, though, there doesn't appear to be any form of feedback which says "enough!" I personally think that the "greed is good" meme which is constantly echoed & reinforced throughout the U.S. society has
Re:Flash: Greed comes to Man Kind (Score:2)
Think about it, who's thriving right now? Greedy *$$h*les who make the rules for the rest and break them at their leisure.
I mean, any one of those execs who will be fined 250G made a lot more than that, and with ANY reasonably skilled lawyer will avoid even minimal jail time. Know what that spells? Profit.
I make millions and I'm fined thousands, that's the cost of doing business.
Sigh.
Re:Flash: Greed comes to Man Kind (Score:2)
Think about it, who's thriving right now? Greedy *$$h*les who make the rules for the rest and break them at their leisure.
Greed may or may not be a long term successful strategy. The greedy population often does fairly well, but inevitably pushes too hard, then heads get chopped off and mansions get burned down (periodic population crash) and the cycle begins again.
In actuality, greed may be more of a negative trait in the sense of representing the lsck of rather than the presense of something. Small
Re:Flash: Greed comes to Man Kind (Score:3, Insightful)
to add something to this:
IMHO such things are the reason why there are no free markets and why there never will be really "free markets". Good that they got caught doing this, but this is only the tip of the iceberg.
People lament over and over again how 'the free market will fix every problem and is the most efficient solution there is...'. Problem is that somehow the feedback of the corporations back onto the government to change the rules and/or the violation
Re:Flash: Greed comes to Man Kind (Score:2)
Ethics teach that a selfish attitude does not help anyone, the last being one self, in the long run. But that idea is as old as human culture and religion, and we seemingly didn't learn much from that time until today.
You can always try better as individual person, but don't expect the same from society as a whole...
Re:Flash: Greed comes to Man Kind (Score:3, Insightful)
I fear that greed is a feeling as natural as hunger or love.
Greed is normally restrained by empathy. Would you take the food from your partner, or your children or your friends for yourself? Would you even steal money from casual acquaintances? Almost certainly not. In all these cases, these are people you can see and recieve feedback from.
In the business world, you seldom see your victims. In actuality, steps are taken to avoid it. Those who are rich often psychologically divorce the poor into a se
Priorites? (Score:3, Insightful)
Some are just able to carry their greed to the point of complete selfishness and totally ignore the high percentage of people who have a hard time just keeping a roof over their heads.
You mean like these people [slashdot.org]
What amazes|saddens|stuns|infuriates me is that price-fixing which targets the arguably already-wealthy who can afford high technology purchases is processed relatively quickly while the at best lethal neglect of the managers and owners of Union Carbide will never see a court docket.
Dumb, stu
greed may not be good but selfishness is (Score:2)
>everyone is greedy to a point.
And who exactly is above this? Greed is extreme selfishness, but we all suffer from selfishness. If we didn't why would we get off our asses, go to school, get a job, start a side project or two or three, etc. You
Re:Flash: Greed comes to Man Kind (Score:2)
Re:Flash: Greed comes to Man Kind (Score:2)
Americans did not invent greed. It's just that like most things, we do it better.
Re:Flash: Greed comes to Man Kind (Score:2)
Greed isn't some kind of species flaw; it's right there in the premise of game theory. It's mathematical.
Now why couldn't the DOJ have (Score:3, Interesting)
Re:Now why couldn't the DOJ have (Score:5, Insightful)
Re:Now why couldn't the DOJ have (Score:2)
Or maybe, they find it, and they are just shocked!
They can't believe their eyes!
So shocked in fact that they have to check again the next day to see if what they saw yesterday was real or not. Upon confirming that it was indeed real, they are so shocked that they are unable to initiate any action. They have to bookmark the site so that they can reconfirm that such evil is actually taking place within
Where does the money go? (Score:1, Interesting)
Re:Where does the money go? (Score:2)
I'm guessing 10% for the lawyers, the rest for the feds.
6 months? (Score:5, Insightful)
Re:6 months? (Score:1)
It's usually reserved for making an example out of people though, so you see it for Martha Stewart types of criminals rather than for well-connected Enron types of criminals.
Re:6 months? (Score:3, Insightful)
I agree the financial fine needs to be a bit stiffer but so does the prison situation - specifically, we need to send these people to federal pound me in the ass prison, not some cushy place where they get their own room and they get to play croquet with their fellow white-collar inmates on the weekends.
As I said in a comment over in the bhopal disaster revisited story, the threat of prison sentences and other punishment can actually be effective with these people because they have something to lose. It
Re:6 months? (Score:2)
Ummm, you need to have a LOT of pot on you for them to haul you off to jail, IIRC. Something about anything under an ounce or something is just possession, if I'm correct. Anything higher, it could be possession with intent, or possibly trafficing (sp?).
Re:6 months? (Score:2)
Re:6 months? (Score:2)
Even if this were not so, federal prison would still be easier for the rich - all they would have to do is pay off
YRO? (Score:3, Insightful)
Re:YRO? (Score:3, Funny)
Sometimes this sort of behaviour may not be so bad (Score:4, Insightful)
The RAM industry is harsh. It's a commodity, and there's probably little profit in it. Little enough to make starting up a RAM factory, or updating the tech, a big financial risk. Above all we need stability in it.
Yes, market economies are good, but not perfect. Maybe this is an example where some amount of regulation is required to assure a steady supply of quality RAM? In a sense, price fixing can be compared to regulation. It's usually illegal and often undesirable, but maybe sometimes it serves a purpose?
Yes, I'd like to get cheap RAM, but not at the expense of quality, innovation or stability. It may be bad for us in the long run that Infineon is going out of business. As I understand it, the market is dominated by four major players. Will there be three now? Will it eventually become even more of a monopoly? I hope not. It would be to our detriment.
Off topic - I wonder when DDR2 is going to ramp up to the point where it's actually better than DDR. From what I've seen, the extra latency kills any performance gains it might have with current chipsets and clock speeds.
Re:Sometimes this sort of behaviour may not be so (Score:3, Interesting)
The fact of the matter over the last 5 years, RAM prices have dropped and sizes have went through the roof. There is no reason _not_ to expect this to continue.
CPUs are made by 2 main companies, yet innovation and price drops are very frequent. RAM has 3, so it's even more competitive if you use that logic.
RAM price charts for 2003, 2004 - bubble in 1H2004 (Score:1)
This chart [macseek.com] shows March-December 2004 price levels for 256 meg of PC 2700 DDR. March: $42, June $46, July-November: $38-$40, December: $35. That 5% trading range for 5 months probably postponed a number of purchases. In contrast [macseek.com] that same memory was trading in $36-$41 last holiday season.
PC2100 DDR shows a similar trend in 2003 [macseek.com] and 2004 [macseek.com].
More statistics here [macseek.com]. Note - if the mouse won't
Get ECC (Score:2)
ECC only costs a tiny bit more and you get a much less error-prone system. Some systems can even alert you to when ECC errors happen, so if you have a notoriously bad stick, you'll know about it harmlessly, instead of through random unexplainable system crashes.
I can't believe systems are still made without ECC today, when the incremental cost is so low.
Re:Sometimes this sort of behaviour may not be so (Score:3, Informative)
Re:Sometimes this sort of behaviour may not be so (Score:3, Insightful)
Somehow I don't think price fixing will bolster quality and innovation. And I don't see stability in itself as a good.
That's no reason to allow price fixing. Id argue price fixing is a form of monopoly, since all the producers a
Still a lot of bad business out there (Score:5, Insightful)
Anyone think the Infineon execs will take this as badly as the CEO of CyberNET (see this article [mlive.com])??
It somewhat still amazes me that these people think because they are supposedly good at business that they are going to be good at breaking the law. At what point does making an amazingly fat paycheck stop a person from wanting more? As incidences like these continue to happen, I get closer and closer to believing it never ends... and that's not even mentioning the big ones like Enron and MCI.
Here's a vote to salary caps in the corporate world!!!
Re:Still a lot of bad business out there (Score:1)
"HA HA"
Re:Still a lot of bad business out there (Score:1)
Re:Still a lot of bad business out there (Score:2)
the hard thing for them would have been to stop early enough to not get so caught, once they started seeing the profits(that in their mind was partly because of breaking the law).
Re:Still a lot of bad business out there (Score:2)
Money calls to itself, the more you have, the more you *need*. Particularly if it appears to be coming from an easy source, the urge is to milk it as completely as possible, for tomorrow may bring ruin for those that didn't hoard as much of it. Those of us that aren't rich, that don't have access to ways of making big lumps of money with a handshake and a smile, have still experienced this feeling in video games, haven't w
Re:Still a lot of bad business out there (Score:2)
If the fines are in the 250,000 region, what's that teaching these people?
Steal a shitload, ruin people's lives, and we'll take a small amount of your money as punishment and give you 6mo in a minimum security federal resort.
Why not take all their ill-gotten gains and lock them away for how long it would take the lowest earner in their company to make the kind of scratch that they had stolen?
I wo
Quotes: (Score:1)
Profiting? (Score:4, Interesting)
6 months is a fair amount? (Score:2, Insightful)
Re:6 months is a fair amount? (Score:2)
At that time the cutthroat competition lead to sales below manufaturing cost, the fixed prices were just as high as the goods were worth...
Troublemakers (Score:1, Flamebait)
Re:Troublemakers (Score:2, Informative)
The company was found guilty of price fixing, an anti-free market practice. The whole idea behind a free market is that supply and demand have a huge influence over pricing. If you allow companies to conspire to set prices across the board, any power the consumer had to influence prices goes out the window.
Imagine, if you will, large midwestern agriculture company conspires with world markets
Re:Troublemakers (Score:2)
Re:OT trouble (Score:2)
As for the wisdom of posting such veiled sarcasm, the post has a great effect when taken to be the corporate flackery as which it poses. That's one
Re:Troublemakers (Score:2)
Wtf? (Score:2)
What a fucking joke. Martha Stewart gets busted for selling $150,000 worth of stock on an insider tip, when she's got BILLIONS, and these guys get "busted", but the real perps with friends in high places get a free ride.
How many people did these guys, and Martha too, actually really hurt? RAM is still pretty cheap, AFAIK Martha wasn't f
The crime earning money while not beeing american (Score:2)
Disgusting. And, while we are at it - what happend to "no taxation without representation" ? What do you bet US company Micron will not get harmed in this at all, while all the others will take hefty fines ?
Re:The crime earning money while not beeing americ (Score:2)
Two of those guys lived and worked in Germany. If what they did was a crime in Germany, they should have been tried here. If not, they should not have been tried at all.
Unfortunately we see more and more attempts of the US of A to extend the reach of their laws far beyond their borders. Call it legal imperialism. Most of that isn't even criminal law. For instan
It's still a scam, just differnet players. (Score:3, Insightful)
I think companies should be punished for theft and price fixing but I have a problem when the US Govt. just dumps those fines back their coffers (or for tax breaks for the rich instead of reducing the general deficit).
IMO it's still a scam and the general public is still getting screwed.
funny (Score:2)
You do not see the government go after them do you? Oh wait its because we need to defend innovation and capitalism.
ProMOS Settlement (Score:2)
How Dare They?!?!?!?! (Score:4, Funny)
**Pulls RAM Out**
oops... shoulda shutdown first.
How can a single company "fix prices"? (Score:2)
Re:Price Fixing (Score:2)