U.S. News

Micron Settles Class-Action Lawsuit Alleging Price Fixing

Associated Press

Computer chip maker Micron Technology has settled a class-action lawsuit alleging it engaged in price fixing and violated antitrust laws, a move that is expected to reduce its 2007 first-quarter earnings by as much as $80 million.

Micron posted first-quarter net income of $192 million, or 25 cents per share, in December.

In 2002, the lawsuit was filed in U.S. District Court in San Francisco on behalf of customers, generally computer manufacturers and others, who bought dynamic random-access memory chips, or DRAM, directly from suppliers between April 1, 1999, and June 30, 2002.

The lawsuit is one of several filed following a U.S. Justice Department investigation into whether computer chip companies conspired to manipulate the number of DRAM chips released to market in a scheme to inflate prices. The investigation resulted in more than $730 million in fines and guilty pleas from four companies -- Samsung Electronics, Elpida Memory, Infineon Technologies and Hynix Semiconductor.

The Justice Department granted Micron immunity from criminal charges in exchange for its cooperation. However, the amnesty did not shield the company from lawsuits.

The settlement only involves direct purchasers of DRAM, such as PC Doctor and Advanced Technology. Some of the larger computer manufacturers opted out of the class-action case last year.

Micron continues to fight other lawsuits filed by indirect purchasers of DRAM, such as consumers, as well as an antitrust lawsuit filed by at least 35 states, including Idaho.

The latter case asks Micron and other defendants to compensate consumers who paid higher prices and demands that the companies not collude in the future.

"This doesn't settle all of the litigation, but it certainly covers the direct purchasers," company spokesman Daniel Francisco said Wednesday. "We just think it's in the best interests of the company."

The company employs about 23,000 people worldwide.