A joint venture of Hitachi Ltd and LG Electronics Inc has agreed to plead guilty and pay a $21.1 million fine for bid-rigging and price-fixing in the sale of optical disk drives, the U.S. Justice Department said on Friday. Hitachi-LG Data Storage Inc was accused of conspiracy and wire fraud in a 15-count criminal information filed in federal court in California, the first charges to emerge from a long-running U.S. probe.
Nearly two years ago, major companies including Sony, Hitachi and Toshiba disclosed that they had received subpoenas from the Justice Department related to the probe of sales of disk drives, such as CD, DVD and Blu-ray players. “The bid-rigging and price-fixing conspiracies involving optical disk drives undermined competition and innovation in the high tech industry,” said Sharis Pozen, acting head of the Justice Department's antitrust division.
Under a plea agreement, which is subject to court approval, Hitachi-LG Data Storage Inc agreed to assist with the ongoing investigation. Hitachi spokesman Masayuki Takeuchi said the joint venture “will work diligently to improve the company's compliance procedures in order to prevent other incidents of this nature.” A representative for LG did not immediately respond to a request for comment. The joint venture was accused of conspiring with others to eliminate competition or fix prices for drives sold to computer giants Dell, Microsoft and Hewlett Packard dating back to 2004. The venture was also charged with participating in a scheme to defraud HP during one procurement event in 2009. The case is: USA v. Hitachi-LG Data Storage Inc, No. 11-cr-724 in U.S. District Court for the Northern District of California.