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Hitachi-LG Data Storage Pleads Guilty, Pays $21.1 Million for Price-Fixing Optical Drives

Company Conspired to Fix Prices of Drives Sold to Dell, HP, and Microsoft; Agrees to Pay $21.1 Million Criminal Fine

Hitachi-LG Data Storage, a joint venture between Hitachi and LG Electronics, has agreed to plead guilty and to pay a $21.1 million criminal fine for its part in a scheme to rig bids and fix prices of optical disk drives.

Hitachi-LG Data Storage A 15-count felony charge was filed on Friday in a U.S. District Court in San Francisco, in the first charge resulting from an ongoing investigation into the optical disk drive industry.

According to the Department of Justice, the company had conspired with others to rig the bidding process on optical disk drives sold to Dell, HP, and Microsoft.

“The bid-rigging and price-fixing conspiracies involving optical disk drives undermined competition and innovation in the high tech industry,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division is committed to prosecuting those who harm competition in the optical disk drive industry.”

According to court documents, Dell and HP hosted optical disk drive procurement events in which bidders would be awarded varying amounts of optical disk drive supply depending on where their pricing ranked. The company and co-conspirators held meetings and discussed bidding strategies, enabling it to bypass the competitive bidding process as a result of the information shared.

As part of the plea agreement, which still needs to be approved by the court, the company has agreed to assist the Department of Justice in an ongoing investigation into the optical disk drive industry.

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For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.