Hitachi-LG Data Storage to plead guilty on price-fixing

Hitachi-LG Data Storage has agreed to plead guilty in connection with rigging bids and fixing prices for sales of optical disc drives and will pay a US$21.1 million fine, the U.S. Department of Justice said on Friday.

The company, a joint venture between Hitachi and LG Electronics, rigged bids on optical disc drive sales to Dell and Hewlett-Packard, and fixed prices on drives sold to Microsoft, according to a 15-count felony charge filed with the U.S. District Court in San Francisco.

These were the first charges filed by the DOJ as part of an ongoing investigation of the optical disc industry. Hitachi-LG Data Storage has agreed to assist in the investigation, the DOJ said in a statement. The investigation revolves around CD-ROM, CD-RW, DVD-ROM and DVD-RW drives.

"The bid-rigging and price-fixing conspiracies involving optical disk drives undermined competition and innovation in the high tech industry," said Sharis Pozen, acting assistant attorney general in charge of DOJ's antitrust division, in the statement.

Hitachi-LG Data Storage and co-conspirators participated in meetings and conversations at different times to fix prices and rig bids for optical disc drives sold to Microsoft and HP, the DOJ said. The company and its co-conspirators issued quotations to Microsoft based on an agreed-upon price for optical disc drives. Hitachi-LG Data Storage and the co-conspirators also "submitted collusive and noncompetitive bids" for optical disc drive contracts at an HP procurement event, according to the DOJ.

An HP representative declined to comment on the case. Microsoft could not immediately be reached for comment.