Hitachi-LG Data Storage has agreed to plead guilty and to pay a $21.1 million criminal fine for its participation in a series of conspiracies to rig bids and fix prices for the sale of optical disk drives, the Department of Justiceannounced. This is the department’s first charge resulting from its ongoing investigation into the optical disk drive industry.

A 15-count felony charge was filed in the U.S. District Court in San Francisco against Hitachi-LG Data Storage, a joint venture between Hitachi Ltd., a Japanese corporation, and LG Electronics Inc., a Republic of Korea corporation.

Of the 14 counts, seven charge Hitachi-LG Data Storage with conspiring with others to suppress and eliminate competition by rigging bids on optical disk drives sold to Dell Inc.; six counts charge Hitachi-LG Data Storage with rigging bids on optical disk drives sold to Hewlett-Packard Company (HP); and one count charges Hitachi-LG Data Storage with conspiring with others to fix the prices of optical disk drives sold to Microsoft Corporation.   The final count charges Hitachi-LG Data Storage for its participation in a scheme to defraud HP in an April 2009 optical disk drive procurement event.

Under the plea agreement, which is subject to court approval, Hitachi-LG Data Storage has agreed to assist the department in its ongoing investigation into the optical disk drive industry.

Hitachi-LG Data Storage is also charged with one count of wire fraud for devising a scheme to subvert HP’s competitive bidding process for an April 2009 procurement event.

Optical disk drives are devices such as CD-ROM, CD-RW (ReWritable), DVD-ROM and DVD-RW (ReWritable) that use laser light or electromagnetic waves to read and/or write data and are often incorporated into personal computers and gaming consoles.

The ongoing joint investigation is being conducted by the Antitrust Division’s San Francisco Office and the FBI in San Francisco and Houston.

You can find the official statement by the Department of Justice here.

E-say

Sharis A. Pozen (Acting Assistant Attorney General, Antitrust Division, Department of Justice): The bid-rigging and price-fixing conspiracies involving optical disk drives undermined competition and innovation in the high tech industry.