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The U.S. Justice Department has decided that four executives of Hynix Semiconductor will serve five to eight months in a U.S. jail for their part in the international price fixing of DRAM chips, a conspiracy it says caused losses to U.S. computer manufacturers and therefore consumers. The decision is no different from a court ruling, a deal reached because the executives pleaded guilty and agreed to jail terms offered by the Justice Department.
It is a regrettable tale. The executives may well feel they are taking the fall for corporate misconduct since they hardly acted in their own interest. There is also a feeling that it makes little sense for the Hynix executives to do hard time since the company already paid US$185 million in fines last year.
Still, it is a chance for Korean companies venturing into foreign lands to learn important lessons. It is not only the U.S. that takes a dim view of price fixing and regards it as a criminal activity with consequent severe punishment.
Samsung Electronics, Germany¡¯s Infineon Technologies and Japan¡¯s Elpida Memory were also involved. They paid $300 million, $160 million and $84 million in fines. Four Infineon executives have already served four to six months in jail, and it is highly likely that seven Samsung executives who are under investigation will be indicted as well. When a vitamin cartel case was unmasked in 1999, Switzerland¡¯s Roche and Germany¡¯s BASF paid $500 million and $225 million in fines respectively and their executives served three to five months.
It seems the U.S. is being rather presumptuous in punishing non-American executives. But multinationals cannot afford to stand up to the U.S. and give up the world¡¯s largest market. That is the harsh reality of global business.
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