updated 06:55 pm EDT, Mon April 30, 2012
Hitachi-LG veteran to face prison
The US Department of Justice stated Monday that a Hitachi-LG Data Storage executive had admitted to price fixing charges. Senior Sales Manager Woo Jin Yang agreed to face reduced prison time of six months, as well as pay a $25,000 fine, for artificially raising the bidding prices of CD and DVD drives sold for HP PCs. Between August 2006 and February 2009, Yang, three others, and an unnamed company had swapped information on prices, market share, and sales data at HP contractor shows to establish higher prices rather than compete for HP's business.
As part of the terms, Yang had agreed to cooperate with the DOJ for an ongoing investigation. If he had refused to plead guilty and had been convicted separately, the four counts leveled against him could have seen him fined a total of $4 million and face up to 40 collective years in prison. His fine could have been higher if he had either caused more damage or profited more than the official maximum penalty.
Price fixing charges have been increasingly common and have primarily centered around LCD price rigging. Why the issue has been so widespread isn't apparent, but companies often resist price competition as it cuts profit margins. Executives can sometimes face the repercussions for this by being accused of underperforming and either losing a bid or cutting the price too low.