SanDisk Under The Looking Glass

The US Department of Justice announced a looming probe

After big names on the computer industry market encountered problems with the antitrust regulations and the state bodies that were designed to enforce them, it is the turn of another company to face a looming probe. While Intel and Microsoft are the traditional accused parties in just about every antitrust case in the computer industry, this time, a whole branch of the industry is accused of breaching the laws.

The United States Securities and Exchange Commission alongside the Canadian Competition Bureau began an industry wide investigation against just about all flash memory makers, and SanDisk is one of the companies that are facing some pretty serious charges.

SanDisk and 23 other flash memory manufacturing companies also face a class action lawsuit suit as they are accused of conspiracy to fix, raise, maintain and stabilize the price tags of flash memory against the natural tendencies of the market. The lawsuit was filed two weeks ago in California and it lists as potential plaintiffs all persons that ever purchased a flash memory based product manufactured by one of the following companies: SanDisk, Samsung, Toshiba, Hynix, Renesas, Micron, Lexar and Hitachi.

In that lawsuit, the many conventions and licensing activities are categorized as illegal and ''cartel activities'' as they led to an artificial price stabilization and even inflation. Also, this lawsuit accused the flash memory manufacturing companies of having used their conventions in order to "exchange and monitor Flash Memory pricing information [and to] communicate their intended prices for Flash Memory to each other. This information sharing was intended to, and in fact did, cause the price of Flash Memory to be stabilized and/or artificially inflated in violation to antitrust laws."

While this is the first lawsuit against the flash memory manufacturing companies under the antitrust laws, it is not the first legal action taken against the unlawful business practices of the computer industry players as sometime ago, the sum of $731 million was levied in fines for various random access memory manufacturers.

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