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By | Brid-Aine Parnell 9th November 2011 15:02

Hitachi, LG admit fixing disc drive prices

Joint venture HLDS hit with criminal charges

A Hitachi and LG optical disk-making joint venture has pleaded guilty to 14 counts of violating antitrust law and one count of wire fraud in the US.

The company is the first to be charged in the probe of price-fixing in the sale of CD, DVD and Blu-ray drives. The Department of Justice investigation also issued a subpoena to Sony Optiarc America, a joint venture between Sony and NEC that supplied drives in America, back in 2009.

The charges cover "conspiracies to suppress and eliminate competition" by rigging optical disk drives procurement events hosted by Dell and HP and fixing the price of drives sold to Microsoft. These "conspiracies" were discussions and meetings with representatives of other major sellers of the drives, the court said.

According to the filing in California, the venture, called Hitachi LG Data Storage – or HLDS – has entered a plea agreement with prosecutors, which will see it pay a criminal fine of $21.1m in instalments over three years, with interest.

As part of the agreement, HLDS is cooperating with the DoJ's Antitrust Division investigation "including providing access to witnesses and documents", the filing said, which is why the fine imposed has been reduced from the sentencing guidelines minimum.

The plea also means that the US will not bring further criminal charges against HLDS or its current and former directors, officers, and employees, except for four individuals excluded from the agreement "who remain subject to prosecution".

It's not the first time a Hitachi-linked company has decided to 'fess up to the Feds, as subsidiary Hitachi Displays also copped to price fixing on LCD monitors in March 2009. ®

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