Oracle Sues Micron for Alleged Price Inflation

By Cindy Waxer September 29, 2010

This is one day Micron Technology Inc. probably wishes it could forget. According to a report from Bloomberg, Oracle Corp. is suing the company in federal court, alleging the semiconductor maker overcharged Sun Microsystems, which Oracle acquired, by conspiring to fix prices for computer memory chips.

Redwood Shores, Calif.-based Oracle claims Micron and other conspirators, including South Korea's Hynix and Samsung and Germany's Infineon, artificially inflated prices for microchips above what Oracle's Sun Microsystems business should have paid for them.

Bloomberg reports that the case stems from a 2002 U.S. Justice Department investigation of price fixing in the memory-chip industry that culminated in claims against four companies and 16 people who have been fined as much as $731 million.

Micron cooperated with U.S. officials and in return, was granted amnesty from criminal prosecution, according to Oracle’s complaint. Similarly, Micron also escaped a fine in a European case in May because it brought the case to regulators there.

This January, Oracle, a database and business-software giant, completed its acquisition of Sun Microsystems in a deal valued at more than $7 billion, thereby gaining an instant toehold in the hardware sector. In 2006, Sun filed suit against several memory chip makers for similar reasons. Sun settled with some vendors. At that time, Micron was not named in the suit.

“My hat is off to one of the greatest capitalists I have ever met, Larry Ellison,” Sun chairman Scott McNealy said in a memo as he surrendered a company he helped found 28 years earlier. “To be honest, this is not a note this founder wants to write. Sun, in my mind, should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.

 




Edited by Erin Harrison

TechZone360 Contributing Editor

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