Vice-President of the European Commission responsible for Competition policy
First cartel decision under settlement procedure – Introductory remarks
Press conference – Berlaymont press room
Brussels, 19 May 2010
Today the Commission settled its first cartel case, the DRAMs case.
The Decision concerns a cartel between 10 producers of memory chips between July 1998 and mid June 2002.
The companies concerned have acknowledged they coordinated prices for Dynamic Random Access Memory -or DRAMs- sold to big manufacturers of personal computers or servers in the European Economic Area. We are talking about original equipments manufacturers and Memory chips, an important product for computers.
The cartel is bound to have had an impact on a great deal of consumers in Europe and also elsewhere – there has also been a decision in the United States.
The EU investigation started after Micron, a member of the cartel, disclosed information on its existence to the Commission.
You may think that to use the word 'settlement' next to the word 'cartel' sounds quite strange. So let me explain, right away, that we are not compromising on cartels. With or without a "settlement". A cartel is the worst violation of competition rules since its object is to collude against the interests of other companies and of consumers.
But the settlement procedure –available since 2008 but never used until today- allows the Commission to speed up its investigations if the companies acknowledge the violations, thereby freeing up resources more rapidly to investigate other suspected cartels.
The message is that cooperating with the Commission pays off. It pays off for consumers because we dismantle more cartels more rapidly providing consumers with healthy price competition. It pays off for taxpayers as public resources yield more results. And it pays off for companies that get a resolution more rapidly and a reduced fine. The attraction for companies is that they can put the episode behind them, restore their reputation plus obtain a 10% reduction in the fine imposed.
But they should be under no illusion. The Commission will continue its relentless fight against cartels.
I come back to today's case.
Having gathered and analysed the evidence necessary to prove a cartel, the Commission approached the companies in 2009 informing them about the Statement of Objections it planned to confront them with and offering to engage in settlement discussions.
All the parties accepted the invitation and made formal settlement submissions in which they clearly and unequivocally acknowledged their part in the infringement. Of course, they had the opportunity to see and comment the evidence gathered against them.
From that point on, the procedure went very rapidly. A Statement of Objections reflecting their submissions was formally sent to them in February this year. This is the basis of today's decision.
The total fine is around €331 million for nine companies. Micron received full immunity because it was first to inform the Commission.
The individual fines – which you can see in the press release - take into account the sales of the companies involved, the very serious nature of the infringement and its geographical scope.
The fines include a first reduction of 45% for Infineon, 27% for Hynix and 18% for Samsung, Elpida and NEC for their good cooperation in the investigation. These reductions are granted under the Leniency programme with which you are familiar.
Due to mitigating circumstances, the fine on Hynix was further reduced by 5% and the fines on Toshiba and Mitsubishi by 10%. Finally, all companies benefitted from a reduction of 10% for settling the case with the Commission.
This first settlement decision is another milestone in the Commission's anti-cartel enforcement. As the procedure will start to be applied to new cases it is expected to speed up investigations significantly.
The settlement procedure has proved to be an instrument that works well and I fully intend to make it as successful in our fight against cartels as the leniency instrument has been. Even though I cannot directly comment on them, I can tell you that there are several more settlements in the pipeline.