Eight optical drive manufacturers have been fined by European Commission for cartel. The companies informed each other of bidding strategies for contracts for drives sold to Dell and HP. The companies that were part of the cartel were Philips, Lite-On, their joint venture Philips & Lite-On Digital Solutions, Hitachi-LG Data Storage, Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage.
Philips, Lite-On and their joint venture Philips & Lite-On Digital Solutions received full immunity from fines as they were the first to reveal the existence of the cartel.
Together the eight optical disc drive suppliers were fined a total of €116 million (about $131 million), TSST and HLDS received the biggest fines of €41 million and €37 million respectively. The latter received a 50% discount on the fine for cooperating with the investigation.
According to the European Commission the companies secretly worked together from Juni 2004 till November 2008. The companies communicated to each other their intentions regarding bidding strategies, shared the results of procurement tenders and exchanged other commercially sensitive information concerning ODDs used in laptops and desktops.
Some companies were involved in the cartel for a year, while others were for more than 4 years involved.
The companies were aware that their behaviour was illegal and tried to conceal their contacts and to evade detection of their arrangements. For example, they avoided naming the competitors concerned in their internal correspondence but used abbreviations or generic names.
The result is that Dell and HP paid higher prices for optical disc drives than without the cartel, which in the end is paid for by the end user.
