Dell Accuses Optical Disk Drive Manufacturers of Fixing Prices | The Law Offices of Gregory D. Jordan

Dell Accuses Optical Disk Drive Manufacturers of Fixing Prices

Dell Inc. has filed a lawsuit claiming that Hitachi-LG and other optical disk drive makers conspired to fix prices. The lawsuit by the Round Rock, Texas-based personal computer manufacturer claims that the price fixing occurred between 2004 and 2010.

According to the lawsuit, filed in federal court in Austin, the manufacturers shared information about sales, pricing and production and agreed to rig bids and fix prices for their products sold in the United States. As a result, Dell said, the company was charged inflated prices for disk drives it bought from the manufacturers.

The lawsuit claims that billions of dollars of purchases over several years were affected. The companies are accused of breach of contract and violation of U.S. antitrust laws. Under antitrust law, Dell is seeking triple damages for the overcharges.

Dell is Central Texas’ largest private employer, with about 14,000 workers in the area. The company is the third-largest manufacturer of personal computers in the world, after HP and Lenovo. Optical drives are components of personal computers and Blu-ray and DVD players. In 2011, the Justice Department said that Hitachi-LG pleaded guilty to fixing prices and rigging bids for disk drives, agreeing to pay a $21.1 million fine.

According to the Justice Department, Hitachi-LG and other companies conspired to fix prices for disk drives to be sold to Dell during a period from 2004 to 2009. Hitachi-LG is a joint venture of Hitachi Ltd., based in Tokyo, and LG Electronics Inc., based in Seoul. According to Dell’s lawsuit, four Hitachi-LG executives pleaded guilty to participation in the price-fixing conspiracy.

The lawsuit also names as defendants Koninklijke Philips Electronics NV, based in Amsterdam; BenQ Corp., based in Taiwan; Samsung Electronics Co., based in Suwon, South Korea; and Sony Corp. and Toshiba Corp., both based in Tokyo. The defendant companies declined comment, citing the pending litigation.

The lawsuit comes at a time when Michael Dell, the founder and CEO of the company, is leading a push to take the company private at a bid of $24.4 billion, or $13.65 per share. Other large Dell shareholders have said they are prepared to make a different offer to investors to take over the company, which would then continue to be publicly traded.

Dell, founded in Austin, Texas in 1984, is one of the world’s largest tech companies, employing more than 100,000 people worldwide. The company is listed as number 38 in the Fortune 500 list of top publicly traded and closely held companies.

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