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$173-million settlement reached in computer chip price-fixing case

A $173-million settlement has been reached with six computer chip manufacturers that conspired in a worldwide illegal price-fixing scheme, the state attorney general's office said Thursday.

The companies "conspired in an illegal global scheme to fix prices on chips used in computer equipment sold to consumers, schools and government offices," Atty. Gen. Jerry Brown said in a statement.

The manufacturers specialize in dynamic random access memory chips, known as DRAM, that store information temporarily for quick access. They are found in computers, servers, printers and routers, among other products.

Sales of the chips exceed $5 billion a year in the United States and $17 billion worldwide, Brown's office said.

Among those named in the lawsuit were Micron Technology and NEC Electronics America, both American companies, as well as firms from Germany, South Korea, Japan and Taiwan and their American subsidiaries.

Upper managers and salespeople from the companies agreed from 1998 to 2002 to charge customers illegally inflated prices for the computer chips, the attorney general's office said.

The inflated prices resulted in California consumers, including government agencies and schools, being overcharged for products containing the memory chips, according to Brown’s investigation.

The $173-million settlement, which included 32 other state attorneys general, requires the companies to refrain from illegal price-fixing and to conduct extensive employee-compliance training, Brown said. The settlement must still be court-approved.

The money will be paid over two years, plus interest to the affected parties.

"The large price tag of this settlement should serve as a warning that we will crack down on any manufacturers around the world that choose to gouge consumers through illegal price-fixing schemes,” Brown said.

-- Ann M. Simmons

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