New Samsung Class Action Lawsuit Alleges DRAM Price-Fixing

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Samsung, SK Hynix and Micron Technology Inc. have been hit with another proposed class account lawsuit claiming that the companies conspired to fix prices for DRAM (dynamic random-access memory) in cellular phones.

This proposed class action lawsuit comes on the heels of a preceding one filed in April of this year.

In this most recent DRAM price-fixing class action lawsuit, plaintiff John Treanor claims that Micron began making public calls to competitors to reduce DRAM production in June 2016.

Allegedly, Samsung and SK Hynix responded, and did as requested. The companies continued to communicate publicly about their agreement to decrease capacity, according to the Samsung class action lawsuit.

Treanor claims that this agreement dropped supply so much and subsequently raised prices so much that DRAM prices rose 350 percent between June 2016 and the present. Allegedly, this increase in profits was unprecedented, and not caused by other market factors.

The Samsung DRAM class action lawsuit seeks to represent a Class of any U.S. consumers who purchased DRAM directly from one of the three companies or affiliates of the companies between June 2016 and the present.

This class period differs from the one established for the April 2018 DRAM class account lawsuit, as the preceding lawsuit ended the class period on Feb. 1, 2018, when Samsung signed a memorandum of understanding with a Chinese regulatory body that was investigating possible price-fixing in the data memory market.

According to the April 2018 Samsung DRAM class action lawsuit, Samsung signed a deal with the Chinese authorities to increase manufacturing capacity for DRAM.

According to both DRAM price-fixing class action lawsuits, because of the companies’ agreement to drive down supply of DRAM in the market and to raise prices, consumers were forced to pay more than they otherwise would have for the technology.

The latest Samsung DRAM prices class action lawsuit claims that together, Samsung, SK Hynix and Micron technology control roughly 95 percent of the worldwide market in data technology.

According to Treanor, the companies colluded to use their influence over the market to maximize their profits. In his words, “This is a classic case of manufacturers in control of a commodity product with little to no price elasticity agreeing to limit their production and slow their capacity in order to increase prices.”

Allegedly, the three companies experienced a profit spike of more than 50 percent during the period of alleged collusion.

After Micron’s call to competitors to slow production of DRAM, production did in fact decrease dramatically, in a way that was a stark departure from consistent increase in DRAM production in preceding years, the Samsung class action states.

Treanor calls the companies’ behavior during the class period a “marked departure” from their previous conduct, and claims that the market-wide increase in DRAM prices was caused by the alleged agreement.

The plaintiff is represented by R. Alexander Saveri, Geoffrey C. Rushing, Cadio Zirpoli and Sarah Van Culin of Saveri & Saveri Inc.; Joseph W. Cotchett, Adam J. Zapala, Elizabeth T. Castillo, Mark F. Ram and Michael Montaño of Cotchett Pitre & McCarthy LLP; W. Joseph Bruckner, Elizabeth R. Odette and Brian D. Clark of Lockridge Grindal Nauen PLLP; and William H. London, Douglas A. Millen and Brian M. Hogan of Freed Kanner London & Millen LLC.

The Samsung DRAM Price-Fixing Class Action Lawsuit is John Treanor v. Micron Technology Inc., et al., Case No. 3:18-cv-03805, in the U.S. District Court for the Northern District of California.