EU goes after 13 optical disk drive companies for price fixing

July 24, 2012

EU goes after 13 optical disk drive companies for price fixingThe European Union (EU) is investigating possible price fixing by 13 optical disk drive companies over the past five years.  The EU has a policy of not naming companies involved in preliminary investigations. The 13 companies are accused of being part of a worldwide cartel violating EU antitrust laws by coordinating their bids while going after contracts with two OEM manufacturers. 

Optical disk drives are used for reading and writing data to CDs and DVDs. Every computer has one so now that the EU has started an investigation, it could mean trouble and large fines for the 13 vendors involved.  According to Reuters charge sheets have been issued to the 13 companies who are under investigation.

While it is still too early to tell if actual charges will be filed against one or more of the companies accused, if the EU does find enough evidence to file such charges, the US Department of Justice (DOJ) may open its own case.  If price fixing is found to have occurred, it will affect US interests as well.

Unfortunately, the 13 companies won’t have the same defense that is apparently being used in the Apple eBook price fixing case.  According to ITProPortal Apple is accusing the DOJ of wanting to “’impose a business model’ that will re-establish Amazon’s alleged eBook monopoly, charges the DOJ denied.”

The DOJ opened up a public comment period on the case, prompting yesterday’s filing. The agency said it "received many comments that sought to excuse price fixing as necessary to end Amazon’s reported 90 per cent share of the e-book market, and noted that Apple’s entry effectuated erosion of Amazon’s share and spurred all sorts of innovations, such as colour e-books."

The DOJ disagreed. "The reality is that, despite its conspiratorial efforts, Apple’s entry into the e-book market was not immediately successful. It was, in fact, Barnes & Noble’s (B&N) entry — prior to Apple — that took significant share away from Amazon; and many of the touted innovations were in development long before Apple decided to enter the market via conspiracy."

Unlike Apple and the ebook publishers, the optical disk drive companies don’t have an Amazon to blame any bad behavior on.  Any price fixing they engaged in wasn’t an attempt to end a monopoly like Apple is alleging.

If the companies are named and formal charges filed, the companies that are charged will be looking at some serious fines and possible trouble on both sides of the Atlantic.

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