In 1890 the United States government passed the Sherman Antitrust Act, a law that formed the bedrock of the United States' policy against monopolies and other unfair forms of competition. In the many years since then, further acts have been passed to amend the law, and the Government has in time made the correction of anti-competitive actions one of its more important roles. What started with the breaking up of truly gigantic corporations like Standard Oil and AT&T has moved on to include dealing with cartels that while not of a single corporation, act at times in manners similar that result in anti-competitive actions taking place.

If we were to take a cursory glance at the computing industry as a whole and try to pinpoint the areas where anti-competitive legal issues were likely to occur, we'd look at areas like CPUs and GPUs, where only a couple of serious competitors exist in each, or operating systems, where Microsoft has and continues to have a de facto monopoly. While these areas do in fact have issues, we would be missing an area that has shown some of the worst behavior. It turns out that the memory industry is one of the greatest offenders.

Generally speaking, it's counter-intuitive to see the memory industry as being a hotbed of legal woes due to the highly competitive nature of the market. With the JEDEC association setting very rigorous standards for RAM, products are quite literally perfectly competitive (from a non-overclocker's point of view): a part specified to meet a certain JEDEC RAM standard should be just as good as any other part that adheres to the same specification. As a result, OEMs can and do switch RAM on a regular basis depending on who can supply it at the lowest cost, and as a result we usually see the memory market operate as it is: a highly competitive market in which multiple companies supply the same good.

But didn't we just say that the memory market is one of the greatest antitrust offenders? Yes, for in spite of the memory market being very cutthroat, it's also an industry that is subject to highly volatile demand. It can be extremely profitable as a result when demand is far outstripping supply and it takes years to bring new fabs online to produce additional memory. It's the profitability of these periods that keeps nearly a dozen major companies in the business. With such volatility however, it also opens the window for manipulation of this volatility - if now is not a boom year, why not make it one?

Over just the last decade, the memory industry has been through no less than three major shakeups. The first is the infamous and now settled Rambus patent case, started in 2000 when Rambus asserted that it held patents on technology used in DDR RAM and wanted royalties as such, only to be found guilty of breaking antitrust and deception laws in acquiring these patents and covertly trying to influence the memory market. The second case involves the "Big 10" memory manufacturers colluding to keep RAM prices artificially high between 1998 and 2002, to which they were found guilty. Finally, a new investigation has opened up as of this year into the flash memory market, where the Justice Department is trying to figure out if there is evidence of collusion and price-fixing there too.

Today we'll be taking a look at the latter two actions, one just wrapping up while another begins. What exactly went on in these cases? How are or potentially were consumers hurt by all of this? What has been done to punish the offenders and to correct the market? Let's find out.

DRAM Price Fixing
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  • Owls - Thursday, October 25, 2007 - link

    This felt like I was reading a high school report. Reply
  • Kishkumen - Thursday, October 25, 2007 - link

    I'd have to agree. I'm tired of stumbling over the errors so I'm giving up after only reading the first couple of paragraphs. It appears to be an interesting article that could be easily corrected by some basic proof reading. Reply
  • 1078feba - Thursday, October 25, 2007 - link

    Agreed.

    quote:

    And while this areas do in fact have issues from time to time, we would in fact miss the area that has issues the most and to the greatest extent. As it were to turn out, it would be the memory industry that is the greatest offender.


    I stopped reading after trying to muddle through this.
    Reply
  • Jodiuh - Thursday, October 25, 2007 - link

    I was wondering why it took me so long to get through this one. Reply
  • Foxy1 - Thursday, October 25, 2007 - link

    Per the "About" section of AT's website:

    "Responsible for maintaining the editorial calendar, Karen Clark is the last pair of eyes to see an article before it goes live. Karen uses her extensive experience in publishing to edit and prepare every article that appears on AnandTech."

    Perhaps she's on vacation this week?
    Reply
  • nullpointerus - Thursday, October 25, 2007 - link

    She died some time ago. From what I have heard, the email account that she used to receive materials for proofreading was so large that the messages never started bouncing back. The writers just assumed that the articles were fine as-is. No one noticed that she was missing until her apartment building caught fire.

    j/k :)
    Reply
  • JarredWalton - Saturday, October 27, 2007 - link

    I actually took her place over 18 months ago, but no one bothered to update the "About Us" page. You'll notice that Ryan, Gary, and me are not listed - but then I'm not sure how many people ever go visit that page anyway. Anyway, there was some stuff going on this past week (NVIDIA Editor's Day) that took me away from the computer for a while, so there was no proofing or editing done by yours truly. I don't usually do much with Ryan's articles anyway, but I have gone through to try and tighten up the text and clean up any grammar or spelling mistakes. Glad to know I was (apparently) missed. :)

    --Jarred
    Reply
  • horatio777 - Thursday, October 25, 2007 - link

    The use of 'baited breath' in the last paragraph is a pet peeve of mine. Is his mouth full of cheese?

    For the origin of *bated* breath see:
    http://www.worldwidewords.org/qa/qa-bai1.htm">http://www.worldwidewords.org/qa/qa-bai1.htm
    Reply
  • sjbderen - Thursday, July 14, 2011 - link

    Come go and see, will not regret it Oh look

    http://www.ifancyshop.com
    Reply

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