American multinational information technology company, Hewlett-Packard or HP, won a court case against optimal disk supplier, CD-ROM for price-fixing.
The case was brought to the court back in 2013, with HP accusing several manufacturers of colluding together for the PC box-shifter to ‘pay more’ than the market rate.
Toshiba, Samsung, Sony, NEC, Panasonic, TEAC, and Quanta have jacked up their prices, forcing HP to pay more. Years of the investigation had come and finally, HP was able to prove that these manufacturers were indeed colluding.
All the other suppliers settled with HP for an undisclosed amount, except for Quanta. The company went on to jury last September, only to lose from HP. The verdict was, Quanta violated the Sherman Act and the Cartwright Act. HP was rewarded $176 million in damages as a result of Quanta’s participation in the ‘price-fixing.’
Quanta got into a deeper hole as one of its employees had sent rival company, Philips, an email with the subject line, ‘price-fixing.’ In the investigation, it is found out that Quanta also collaborated with other companies to discuss pricing.
According to the complaint document of HP, Quanta and the rest have violated the Section 16720 of the California Business and Professions Code, ‘to fix, raise, stabilize, and maintain prices of and allocated markets for ODDs at supra-competitive levels.’
The discovery process also showed the depths of the colluding Quanta did with other manufacturers. In fact, in one of the hearings, Hitachi and LG took the stand to point fingers at Quanta employees who are guilty of the same behavior.
Text messages and call logs of Quanta employees also led to more questions as they are contacting with rival company representatives for price-fixing.
HP lawyers have touched on to these emails to convince jurors of the violations. They’ve discussed the online bidding that went on for months, which help keep the prices high. HP employees stood up to court, saying, they all felt betrayed by the people they have worked with.
The investigation also led to the discovery of the joint venture between LG and Hitachi, which also plead deal with HP on the case.
For years, the computer giant has purchased optical disks for billions due to the collusion of manufacturers. HP said, “Billions of dollars of purchases of optical disks drives at artificially inflated prices over several years.”
HP is also suing computer electronic parts manufacturers for taking anti-competitive actions.
