Hitachi-LG Data Storage Executive Pleads Guilty on Bid-Rigging Conspiracies on Optical Drives

An executive of Korean-based Hitachi-LG Data Storage Inc.
(HLDS) has agreed to plead guilty and to serve time in a U.S. prison
for his participation in a series of conspiracies to rig bids for the
sale of optical disk drives, the Department of Justice announced.

According to the four-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco,
senior sales Manager Woo Jin Yang, also known as Eugene Yang, conspired
with others to suppress and eliminate competition by rigging bids for
optical disk drives sold to Hewlett-Packard Co. He participated in the
conspiracies at various times between approximately August 2006 and June
2009. Under the plea agreement, which is subject to court approval,
Yang has agreed to serve six months in prison, to pay a $25,000 criminal fine, and to cooperate with the department’s ongoing investigation.

HLDS is a joint venture between Hitachi Ltd., a Japanese corporation, and LG Electronics Inc., a Republic of Korea corporation.

"Today’s charges demonstrate the Antitrust Division’s commitment to
prosecute and deter conduct that harms American businesses and consumers," said acting assistant attorney feneral Joseph Wayland in charge of the Department of Justice’s Antitrust Division. "The
division will continue to pursue those who participated in these
bid-rigging and price-fixing conspiracies so they are held accountable
for their actions."

Optical disk drives are devices such as CD-ROMs, CD-RWs (ReWritable),
DVD-ROMs, and DVD-RWs (ReWritable) that use laser light or
electromagnetic waves to read and/or write data and are often
incorporated into personal computers and gaming consoles.

According to the charges, from approximately August 2006 until February
2009, HP hosted optical disk drive procurement events in which
participants would be awarded varying amounts of optical disk drive
supply depending on where their pricing ranked.

According to court documents, Yang and co-conspirators participated in a
series of conspiracies involving meetings and discussions to
predetermine bidding strategies and prices of optical disk drives,
resulting in the submission of collusive and noncompetitive bids for
HP’s procurement events. Yang and co-conspirators also exchanged
information on sales, market share, and the pricing of optical disk
drives to monitor and enforce adherence to the agreements.

Including Yang, the department has charged four individuals and one
company as a result of its ongoing investigation into the optical disk
drive industry.

On November 8, 2011, HLDS pleaded guilty in the U.S. District Court for
the Northern District of California in San Francisco to 14 counts of
violating the federal antitrust laws between approximately June 2004 and
September 2009. It also pleaded guilty to one count of participating in
a scheme to defraud in connection with an April 2009 procurement event.
On the same day, it was sentenced to pay a $21.1 million criminal fine
and agreed to assist the department in its ongoing investigation into
the optical disk drive industry.

HLDS executives Y.K. Park, S.H. Kim, and Sik Hur pleaded guilty
to multiple violations of the Sherman Act on March 27, 2012; April 17,
2012; and April 10, 2012 respectively. They are currently awaiting sentencing.

Yang is charged with violating the Sherman Act. Each count carries a maximum fine of $1 million and up to 10 years in prison.
The maximum fine may be increased to twice the gain derived from the
crime or twice the loss suffered by the victims of the crime, if either
of those amounts is greater than the statutory maximum fine.

This case is part of an ongoing joint investigation by the Department of
Justice Antitrust Division’s San Francisco Office and the FBI in San
Francisco and Houston.

Read also:
Hitachi-LG Data Storage to Pay $21 Million Criminal Fine
In bid-rigging and price-fixing on optical drives