Samsung, Hynix & Micron facing DRAM Class Action suit

[Razor512]

While there will always be someone out there willing to pay an outlandish price, the idea of charging the maximum the market can handle is based on figuring out which price yields the best net income.

 

For example, if Pepsi decided to make the 2 liter bottles of soda cost $100 each, you may get some oil company owners who will still buy a bottle once in a while, but overall the company will lose money since they will likely lose 99.9999% of their customers.

 

If a DRAM maker can increase the price by 130% but only lose 40% of their customers, then they will still net more money at the end of the day.

The goal behind price fixing is to slowly increase the price together until you find the max price you can charge before income begins to drop, and then agree to stay around that price point. Once you are at that price point, you then work to ensure that there is never a shortage, as a shortage from someone willing to pay the price = a lost sale.

 

This is how price fixing works, the goal is not to increase prices to infinity dollars, the goal is collude with your competitors to increase prices at the same time, which is mutually beneficial as if prices increase at the same time, then the market does not shift, and everyone in on the price fixing simply makes more money. This is often the natural end result of a market that has stopped expanding, instead of trying to get more customers (which gets harder over time), you shift to trying to extract as much money as possible from the current customer base.

 

Think like how when an ISP has a monopoly in an area, they can increase prices without really losing customers. As long as they charge a price that the customer can still afford, they will keep them, but if they increase it too much, then no matter how much someone wants cable internet, they will likely now take out loans to cover their cable internet bill.

 

A free market equilibrium point can only be achieved when there is competition. Regardless of how much money the customer has, they are always looking for the best possible quality at the lowest possible price. The business is always looking to make as much money as possible, which means spending as little as possible on production and charging as much as possible for the good or service. In a free market, the equilibrium point will be somewhere in the middle, and if a business tries to shift that point to be more in their favor, then a competitor will undercut them and take their customers, this allows the market to self regulate. If there is collusion, then this point can be shifted to extract more money out of the consumers,where the shifting of the point is designed to find find the maximum the consumers will pay without too many of them being priced out of the market.

 

This is why every government outlaws the practice of price fixing.

 

 

 

[croppy]

4 hours ago, SpaceGhostC2C said:

Probably, if and when this becomes a criminal offense by the firms' management, instead of a purely commercial issue with fines as all punishment.

"Sun Woo 'Sunny' Lee, Senior Manager of DRAM at Samsung Electronics, entered into a plea bargain with the US Government for his involvement in the price fixing conspiracy

...

Following the plea agreement he was sentenced to 8 months in prison and fined US$250,000"

 

Dude from Samsung even went to jail and samsung were fined 300M.

[Kamjam21xx]

16 minutes ago, croppy said:

"Sun Woo 'Sunny' Lee, Senior Manager of DRAM at Samsung Electronics, entered into a plea bargain with the US Government for his involvement in the price fixing conspiracy

...

Following the plea agreement he was sentenced to 8 months in prison and fined US$250,000"

 

Dude from Samsung even went to jail and samsung were fined 300M.

Awesome

[SpaceGhostC2C]

29 minutes ago, croppy said:

"Sun Woo 'Sunny' Lee, Senior Manager of DRAM at Samsung Electronics, entered into a plea bargain with the US Government for his involvement in the price fixing conspiracy

...

Following the plea agreement he was sentenced to 8 months in prison and fined US$250,000"

 

Dude from Samsung even went to jail and samsung were fined 300M.

In most countries you don't serve sentences under 2 years unless you have a previous record.

Still, that's the way to go.

[croppy]

oh my god I should have kept reading...

 

"Lee was subsequently promoted to President of Samsung Germany in 2009,^[6] and then President of Samsung Europe in 2014.^[3]"

 

 

^....how?