Samsung Class Action Lawsuit Alleges DRAM Price-Fixing Scheme

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Tech giants Samsung Electronics, SK Hynix and Micron Technology have been accused of conspiring to fix prices of dynamic random-access memory (DRAM) in phones and computers in a class action lawsuit.

Plaintiffs Michele Jones, David Laietta, Kimberly York, Benjamin Murray, and Wanda Dureya filed the DRAM price-fixing class action lawsuit hoping to represent all consumers who purchased devices with DRAM impacted by the alleged price-fixing conspiracy.

The plaintiffs claim that Samsung, SK Hynix and Micron began to conspire to fix prices of DRAM from at least June 1, 2016 through February 2018.

Allegedly, the fact that the three companies control about 96 percent of the worldwide DRAM market, gives them significant power over pricing. The consumers claim that the companies “combined and contracted to fix, raise, maintain, or stabilize the prices at which DRAM was sold in the United States.”

According to the Samsung DRAM class action lawsuit, consumers were forced to pay more for DRAM products than they would have, had the companies not conspired to fix prices.

In contrast to the collusion that allegedly started in 2016, the Samsung DRAM price-fixing class action lawsuit states that “prior to entering into the conspiracy, [the companies] acted independently in deciding how to balance supply (and capacity) to meet industry demand for DRAM. Acting independently, firms sought to gain market share through increases in their supply.”

As supporting evidence for their claim of price-fixing, the plaintiffs allege that Micron requested that Samsung and SK Hynix engage in “supply discipline,” and this effort is shown through Micron’s statements to the industry and to its investors. Allegedly, when Micron was asked on March 31, 2016 if it would cut its supply, Mark Durcan, the CEO, stated that Micron would “be foolish to be the first ones to take capacity off.”

This statement was reportedly in conflict with a statement that Micron made to its competitors, stating that the company’s focus was not on trying to gain market share from Samsung and Hynix.

Consumers claim that during the collusion period, the companies made public comments urging one another to limit supply. The plaintiffs say the companies agreed to only grow supply by 15-20 percent in 2017, though the market demand for DRAM grew 20-25 percent in the same year. This limit on supply enabled the companies to raise the prices of DRAM, increasing their profits.

The Samsung, SK Hynix, Micron DRAM class action lawsuit points to a December 2017 article by Reuters that reported that the National Development and Reform Commission (NDRC), China’s economic regulator, was in the process of investigating alleged price-fixing in the DRAM/NAND industry. Allegedly, the companies changed their conduct as a result of pressure from the NDRC, and DRAM prices subsequently dropped.

As further evidence to support their claim of collusion, the consumers note that the companies were accused of similar actions before – in 2005, the U.S. Department of Justice brought criminal charges against the three companies for alleged price-fixing between 1999 and 2002. SK Hynix and Samsung pleaded guilty, paying some of the “largest criminal fines in history” for their actions.

The plaintiffs are represented by Steve W. Berman, Jeff D. Friedman, Rio S. Pierce, Anthony Shapiro, and Ronnie Speigel of Hagens Berman Sobol Shapiro LLP.

The Samsung DRAM Price-Fixing Class Action Lawsuit is Michele Jones, et al. v. Micron Technology Inc., et al., Case No. 3:18-cv-02518, in the U.S. District Court for the Northern District of California.