Class-action suit alleges Samsung, Micron, and SK Hynix fixed DRAM prices

There's no getting around it: RAM prices are extremely high, and they've been that way for a while now. The high cost of memory has caused more than a few grumblings of price fixing, but nobody had taken action until this past Friday. Law firm Hagens Berman, representing a collection of consumers, has filed a class-action lawsuit against Samsung, Micron, and SK Hynix, accusing the companies of colluding to increase the cost of DRAM.

According to Hagens Berman, the three named companies controlled 96% of the worldwide DRAM market from July 2016 to February 2018. During that period, DRAM prices jumped 130%. The firm says that collectively, the DRAM vendors' revenues increased by more than double over the same period. While that's certainly suspicious in its own right, the press release issued by the firm asserts that a "proprietary, independent investigation" by the law firm itself uncovered an illegal agreement to create artificial scarcity by underproducing RAM. 

Specifically, the document directly accuses Samsung, Micron, and SK Hynix of clear collusion in the form of coordinated supply decisions. That kind of behavior is illegal in the U.S.—thanks to the Sherman Antitrust Act passed in 1890—and the memory industry has been dinged for it before. In fact, Hagens Berman won a similar suit back in 2006. That case resulted in a settlement for consumers to the tune of $300 million as well as what Hagens Berman claims were "some of the highest criminal fines in history."

If you bought anything containing DRAM ICs during the period of the lawsuit (July 1, 2016 to February 1, 2018) you might be entitled to a check at the end of the litigation—assuming Hagens Berman isn't just blowing smoke. You can sign up to be a part of the suit here.

Comments closed
    • LoneWolf15
    • 1 year ago

    The only DDR4 I’ve gotten, is RAM I traded equipment for. I’ll wait to rebuild my desktop until they come down in price. If they don’t, well…I’ll wait some more. I bought 32GB of quality DDR3 right at the end when prices were rock bottom, so I’m not hurting.

    Two can play this game: They can keep the prices high (they probably are colluding on that at least tacitly); and I can choose not to buy it because it’s too expensive. I’d love for them to be realistic, but if they aren’t, and we don’t buy, then they have to decide whether their price is too high for the market to bear.

    • kurazarrh
    • 1 year ago

    Boy, are their wrists going to be RED!

    • Gastec
    • 1 year ago

    After reading the other comments I’m half expecting the CEO’s or other high ranking officials from those Corporations to cum and leave their insightful comments on this thread, to teach us all ignorant computer enthusiasts about Capitalism and Profitability.

    • albundy
    • 1 year ago

    YAY! its back! I knew it would. the last one from 6 years ago had a nice payout. keep your receipts!

    • Srsly_Bro
    • 1 year ago

    going to leave this here for @ CaptainNed

    [url<]https://en.wikipedia.org/wiki/Tacit_collusion[/url<]

      • Captain Ned
      • 1 year ago

      From Page 69 of the Complaint:

      [url<]https://www.hbsslaw.com/uploads/case_downloads/dram2/2018-04-27_dram_class_action_complaint.pdf[/url<] [quote<]280. For purposes of formulating and effectuating their contract, combination, or conspiracy, Defendants and their co-conspirators did those things they contracted, combined, or conspired to do, including: a. Communicating in writing and orally to fix prices of DRAM and DRAM products. b. Agreeing to manipulate prices and supply of DRAM and DRAM Products sold in the United States in a manner that deprived direct and indirect purchasers of free and open competition. c. Making supply growth decisions in accordance with the agreements reached. d. Selling DRAM and DRAM Products to customers in the United States at noncompetitive prices. e. Providing false statements to the public to explain increased prices for DRAM and DRAM products[/quote<] Without documentary proof of 280a, their entire Claim for Relief under the Sherman Act goes away. Until they show their documentary evidence substantiating this claim, I will remain skeptical. Do I wish RAM were cheaper? Of course. Do I subscribe to the theory that the current prices can only result from illegal action? Clearly not. The belief that some espouse here, i.e. that corporations must do everything in their power to lower the prices of the products they sell, is illogical, ludicrous, and unsupported by any piece of law (c.f. Apple). Stamping my feet in the public square and demanding that someone sell me RAM at the price I wish to pay makes for great theatre, but unsupportable "law".

        • Srsly_Bro
        • 1 year ago

        Here is a good test I found relating to a similar case involving cell phone carriers and text messaging rates.

        [url<]https://www.gtlaw.com/en/insights/2015/5/parallel-texts-tacit-collusion-still-legal[/url<] This case should get interesting. I'm going to read the rest of the case and find the brief tomorrow after work.

        • HERETIC
        • 1 year ago

        My thoughts on reading the press releases-they are being VERY careful this time.

        “We can not manufacture enough Nand to supply demand,so we intend to
        convert some of our Ram lines to Nand production.This will improve results
        for our shareholders.”

        The rising Ram prices was a added bonus.
        This was done when there was a over-supply of Ram,and very small-if any profits.
        The big ? they all did it around the same time………………….

    • Captain Ned
    • 1 year ago

    Ah, the Gerbil School of Law. Prices are high and the only possible reason is illegal collusion.

    Just how many massive DRAM price cycles have we been through, as overproduction kills prices and underproduction raises them, in a lagging feedback cycle that no one can predict? Please note that all three accused are publicly-traded companies whose primary responsibility, under US corporate law, is to increase shareholder value.

    Unless someone can show direct evidence that the three companies acted in concert through something other than their public statements in their quarterly earnings calls, this case is going nowhere.

    Do the DRAM makers want to end the massive price yo-yos? Doh. What’s been alleged so far is that each reacted to the PUBLIC statements of each other that reducing price swings would be beneficial to stockholders. No one has yet produced evidence that those PUBLIC statements were coordinated behind the scenes.

    Despite what the Gerbil Army may wish, higher prices may very well be rational corporate decisions to maintain/increase stockholder value rather than the romantic belief that cheap RAM is a Divine Right of Gerbils.

    Does anyone major in Economics these days?

      • Beahmont
      • 1 year ago

      Ah look, it’s a Corporate Shill come to do the “Nothing to see here! Move along!” and “These are Publicly Traded Companies! They can’t do this thing because it’s clearly illegal and would hurt the shareholders!” speeches while conveniently forgetting that these very same Publicly Traded Companies have all been convicted in a court of law in multiple countries of doing… exactly what they have been accused of here and more.

      I demand better trolls. Chuckla is at least funny sometimes. This is just sad.

        • Captain Ned
        • 1 year ago

        Fine. Bring me evidence that the companies actually colluded, as in met behind closed doors and agreed to limit DRAM production. Otherwise, all you’ve got is “high prices can only come from illegal collusion” and “once guilty always guilty”.

        There’s no crime in any one company reducing production to raise prices and end the yo-yo price swings that have plagued the DRAM industry. There’s no crime in multiple companies reaching the same BLOODY OBVIOUS conclusion on their own. Refusal to run the foundries at breakneck pace just so you can buy cheap RAM isn’t a crime UNLESS someone can bring evidence that it resulted from illegal and undisclosed (think securities law here) agreements to do just the same.

        If high prices alone were evidence of illegal anti-competitive behaviour, Apple would be a smoking carcass of an ex-company.

        Oh, and I’ve been called FAR worse than a “corporate shill” over the past 35 years or so, especially given my day job.

          • RAGEPRO
          • 1 year ago

          Isn’t that the point of the court case, Ned? 🙂

          [quote<]Fine. Bring me evidence that the companies actually colluded, as in met behind closed doors and agreed to limit DRAM production.[/quote<]

            • Captain Ned
            • 1 year ago

            All that’s been made public so far by the PLAINTIFFS is that the three companies’ public statements, in the form of quarterly earnings calls, say the same thing: “We’re not growing capacity for the simple reason of maintaining/improving margins and stockholder value”. That’s it. That’s all the case they’ve shown so far. Seems odd to lead with such a weak allegation compared to the documented evidence put forth at the beginning of the last time this was an issue, and leads some to believe in the associated forum thread that this is more a greenmail attempt from the law firm than anything concrete.

            Unless the plaintiffs can show that the three companies had a private agreement to make the same statements in their earnings calls, there is no case for collusion and/or anti-competitive behaviour. Despite what some here clearly wish to be true, the burden of proof falls on the plaintiffs.

          • Beahmont
          • 1 year ago

          That is not the point you made in your original post. Your original post was nothing but exactly what I described as “Nothing to see here! Move along!” and “These Corporations clearly can’t do this illegal thing which they have previously done and been convicted of in the past because it’s illegal!” and were justly mocked for it.

          And yes, in many cases artificially reducing supply to drive up prices is in fact a crime even without collusion when the producer is in a near monopoly position.

          You seem to be forgetting the part where corporations are supposed to benefit the public, not the public benefit the corporations. And a lot of that is actually written into US anti-trust law. If there are 3 suppliers of a good and the suppliers refuse to compete, for almost any reason, there is a good case to be made for an anti-trust violation. All the major producers of DRAM deciding that the all want to ‘reduce the volatility of the market place’ a.k.a. not actually compete with each other, is kinda the text book definition of Trust & Securites Fruad as well as Anti-Competitive Collusion, even and especially if there was no formal agreement between companies. There’s over a hundred years of case law that says exactly this.

            • Captain Ned
            • 1 year ago

            [quote<]That is not the point you made in your original post. Your original post was nothing but exactly what I described as "Nothing to see here! Move along!" and "These Corporations clearly can't do this illegal thing which they have previously done and been convicted of in the past because it's illegal!" and were justly mocked for it. [/quote<] QQF?? "Unless someone can show direct evidence that the three companies acted in concert through something other than their public statements in their quarterly earnings calls, this case is going nowhere. " [quote<]You seem to be forgetting the part where corporations are supposed to benefit the public, not the public benefit the corporations.[/quote<] Please kindly show me where this ludicrous concept has ever defeated a derivative suit brought by stockholders under Delaware corporate law, or any other state's corporate law. Despite what you may wish, a long and continually-adjudicated standard of corporate law is that the sole duty corporations owe is to their stockholders. [quote<]And yes, in many cases artificially reducing supply to drive up prices is in fact a crime even without collusion when the producer is in a near monopoly position.[/quote<] Must be it's only OK, then, when it's the US Gov't artificially reducing supply? Have you read [i<]Wickard v. Filburn[/i<] or have any knowledge of how the dairy industry actually works?

            • Beahmont
            • 1 year ago

            I had a long thought out response with case citations and direct citations of applicable Anti-Trust law and the relavant statues and debates concerning the invention of American Corporations and American Corporate Law.

            And then I reread this response again and came to the conclusion none of it would do me any good if you don’t even understand the point of laws in a Democratic Republic, to benefit and establish order for the good of the people as a whole who live in the country, nor understand that Anti-Trust Law is by definition the the prime example of a society creating laws to benefit the society as a whole by ensuring competition and that monopolies are either not created or heavily regulated.

            Never mind that “publicly agreeing to stabilize the market,” a.k.a. publicly agreeing to limit the competition each corporation has with the other, is kinda the definition of both collusion and anti-competitive behavior Anti-Trust laws were literally designed to combat back in the days of the big Trusts like Standard Oil.

            Oh, and for someone who likes to sling around phrases like “Gerbil School of Law,” “Gerbil Army,” and “Divine Right of Gerbils” you sure do have a thin skin.

            P.S. The obligation to shareholders, even in Wickard v. Filburn is second to actually obeying the law. Law is, once again, supposed to be made to benefit society as a whole. So yeah… even your case cite is wrong.

          • mesyn191
          • 1 year ago

          They’ve been busted multiple times for this crap so there is no reason to give them the benefit of the doubt + flash prices have plummeted while DRAM prices have risen and all the flash and DRAM are coming from the same factories AND demand for flash hasn’t fallen.

          This is as obvious a instance of price collusion as you’re going to get and if you can’t figure that out then you’re the sort of person who is hopelessly naive enough to believe anything and/or a real deal corporate shill.

      • chuckula
      • 1 year ago

      Your facts and rational analysis are meaningless when confronted by the talons of justice of… [url=https://www.youtube.com/watch?v=GmZiqwRnwtM<]THE TEXAS LAW HAWK[/url<]

      • anotherengineer
      • 1 year ago

      Majored in Engineering, almost had a minor in economics.

      Said companies blamed it on shortage, thereby citing, supply and demand. And if supply was tight the rising cost would balance out the profits due to less ram to sell, in theory. However profits appear to have gone up.
      2010 to 2014 seems pretty even on this one, but climb pretty good after though
      [url<]https://www.statista.com/statistics/275887/nand-flash-manufacturer-sales-worldwide/[/url<] However, I do not see or have seen in the past 2 years at newegg, amazon, brick & mortar stores, etc. etc. with no stock or extremely limited stock, or signs saying outa ram, it's back ordered. Stock seems to appear good [url<]https://www.newegg.com/Product/ProductList.aspx?Submit=ENE&IsNodeId=1&N=100007611%20600006072%20600327642[/url<] Now I am not saying it's collusion either, 1 maker could have raised prices all on their own, then the others just followed suit. Now I also remember when the memory makers were actually loosing money when DDR3 was going for about $40 for 16GB (wish I bought some at that price), and a few years ago when 32GB of DDR4 was about $135 and they were making profit. But hey if people are willing to pay more, then they are the ones that will set the market price, beyond supply and demand. So in conclusion, Capitalism FTW!!

        • brucethemoose
        • 1 year ago

        Playing devil’s advocate:

        A: The RAM sticks on Amazon/Newegg technically aren’t the raw memory product, and many different kinds of products use memory fab capacity. Ultimately, the 3rd (or kinda 1st, in the case of Crucial and so on) party manufacturer that orders and packages RAM deals with the shortage, and (along with the seller markup) gets to price the end product high enough that you don’t see the stock shortages on Newegg/Amazon. And there are probably a few products using memory that got outright axed or reworked when it got too expensive.

        B: Typical memory margins are so thin that selling significantly fewer chips at a modestly higher price can be much more profitable, even with the massive flat costs of the R&D and shiny new fabs.

        • chuckula
        • 1 year ago

        [quote<]And if supply was tight the rising cost would balance out the profits due to less ram to sell, in theory.[/quote<] That's not necessarily true at all. If supply is tight because your fabs are operating at capacity then your profits most certainly will shoot up compared to the same fabs operating at somewhat less than 100% capacity just a couple of years prior. The profits tend to shoot up rapidly after you pass an inflection point of capacity since there are plenty of fixed costs that have to be paid no matter if your fab is 50% full or running completely maxed out. The profits usually jump the most as you asymptotically approach the maximum output level.

          • OptimumSlinky
          • 1 year ago

          Right, but if demand is truly outstripping standard production output, you’ll see firms start instituting overtime, additional production shifts, or even expansion of production facilities to try and match the new demand (hence raising costs).

          By all accounts, none of these things are happening, which reeks of something fishy because no rational company would go, “Meh, the market is demanding 5 widgets a day but we can only produce 2 widgets and can’t be bothered to expand production and make more money.”

            • Captain Ned
            • 1 year ago

            Which, over at least the past 2 decades, has then caused the bust side of the DRAM cycle. Forgoing income opportunities today to avoid even larger losses likely in the future (based on past cycles) is not an illegal practice (unless arrived at by non-public collusive communication).

      • Redocbew
      • 1 year ago

      I knew a few people who majored in Economics when I was in college. I’d say the erosion of rigor and the need for instant gratification isn’t specific to one field or another, but there are still people who care that they get it right in each of them.

      Do I believe there’s been price fixing and collusion? Like you said, I don’t have any evidence, but I also don’t have a problem with the megacorps of the memory industry having to defend a case against it. Telling a large corporation “You can be big, but you can’t use your bigness to squish the little guys” has always seemed to me to be very similar to telling a teenager “You can have sex, but you can’t have fun”.

        • Anonymous Coward
        • 1 year ago

        Nice thing about corporations which become a burden on society is the possibility to break them into smaller entities for the common good.

          • Usacomp2k3
          • 1 year ago

          Since when has that ever worked out in favor of the consumer?

            • Anonymous Coward
            • 1 year ago

            Honestly I’m not aware of recent examples, but the threat might for example keep Intel in line.

            • Anonymous Coward
            • 1 year ago

            Hey downvoter(s), come here and tell me all about how its unnecessary charity which has caused Intel to [i<]not[/i<] bankrupt AMD thus far.

            • Beahmont
            • 1 year ago

            Well just to name one, because you are totally “JAQing” off here, the break up of Ma Bell a.k.a. The Bell System. But there are many others.

            But Republicans and no small amount of Democrats have not been doing their job and creating exception after exception or just straight up failing to enforce the laws with regards to corporations and monopolies. Fortunately Democrats at least seem to be changing their tune. But Republicans continue to worship corporations en mass.

      • Anonymous Coward
      • 1 year ago

      What a stupid, snobbish response.

    • DPete27
    • 1 year ago

    Revenue = income. So selling the same number of products for 130% higher price increases revenue by an equal 130%. Since the revenue increase was 200%, that would signify that sales quantity also went up 30%.
    Not to go into artificial scarcity, but if you have a fixed supply (only own so many machines that can produce DRAM) and an increase in demand, the laws of economics tell us that price would increase.

    I’m definitely suspicious of price fixing. Sure, more devices are using larger amounts of DRAM every day, but capacity density is also ever-increasing.

    • Chrispy_
    • 1 year ago

    I’ve been waiting for this for several months now.

    It’s frickin’ obvious that they’re guilty to anyone with half a brain cell. The problem is that despite the very large fines last time, all parties involved still made huge net profits from the illegal cartel and price-fixing.

    • uni-mitation
    • 1 year ago

    “[url=https://www.youtube.com/watch?v=UmzsWxPLIOo<] I know nothing! [/url<]" [s<]DRAM Cartel[/s<] DRAM Market Industrialists Extraordinares uni-mitation

    • brucethemoose
    • 1 year ago

    Well Micron stock is still up today… But I’ve been thinking of selling my stake for awhile.

      • uni-mitation
      • 1 year ago

      I would say that the market is pricing the cost of any future litigation costs as a business expense and basically saying “the measly settlement cost will be a blimp to the cartel. Let’s buy some more while it is cheap.”

      Stockholders love cartels. What is not to love? No competition, stagnant research development cycles & lowering R&D costs plus rising profits which equal dividends & share buy-backs. All on the backs of the consumers. On the same vein, plaintiff attorneys also love them- every once in the while they get to ring the register with their class-action wins.

      Good play from your part. Selling some of that stock and not letting the house win it back >>> not being greedy and reducing your risk. Smart.

      uni-mitation

        • brucethemoose
        • 1 year ago

        But it’s more than that. Getting caught would stop the price fixing, turning those very healthy margins into the bone-crushingly thin margins of a competitive memory market.

        I dont think investors remember how thin margins are supposed to be.

    • UberGerbil
    • 1 year ago

    I’m sure we’re all
    [url<]https://i.imgur.com/ClMhstp.gif[/url<] But let's remember the rest of the scene, which is just as apt wrt the law firm blowing the whistle for the second time: [url<]https://i.imgur.com/gzdQJ7k.gif[/url<]

    • kuraegomon
    • 1 year ago

    Gloria in Excelsis Deo – go HB, go!

    More seriously, it’s been pretty clear that supply was being constrained (likely artificially) and considering Hagens Berman’s history here, Samsung/Micron/Hynix should be collectively filling a whole lot of diapers right about now.

      • chuckula
      • 1 year ago

      Glow-ree-ya in an Excel-sheet RAM Prices-oh!

      • Anonymous Coward
      • 1 year ago

      Meh, they probably consider penalties to be part of doing business. What are the odds the penalty will be large enough to matter?

      Also, if they have this documented in agreements, they’re morons.

        • DancinJack
        • 1 year ago

        The odds the penalties are gonna stop them from doing it again? Close to zero. They’re making too much money to care about them.

    • chuckula
    • 1 year ago

    Usually you get sued when you break something.

    Prices are an exception to the rule.

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