Hard Disk Dri, er, Connive: Two sales execs accused by Uncle Sam of bumping up HDD component prices

Japanese supplier's biz model, like its products, were straight as a spring


Two former sales executives at NHK Spring Ltd, Hitoshi Hashimoto and Hiroyuki Tamura, were indicted in America last week for alleged participation in a worldwide conspiracy to fix the prices of hard disk components.

"This charge demonstrates that antitrust violations are not just corporate offenses but also crimes by individuals," said assistant Attorney General Makan Delrahim. "The [US Dept of Justice's] Antitrust Division is committed to prosecuting culpable senior executives who circumvent the antitrust laws in order to cheat consumers."

The indictment [PDF] against the pair, filed in a federal district court in San Francisco, California, follows a guilty plea from the Japan-based manufacturer last year. The industrial spring maker agreed to pay a $28.5m fine for participating in an eight-year-long scheme to collude with competitors to fix the prices for hard disk drive (HDD) suspension assemblies.

Suspension assemblies hold the HDD recording head near the spinning disk so digital information can be magnetically written and read. They can be sold as standalone components or as part of an HDD in a computer, game console, printer, and so on.

Following NHK Spring's admission of guilt, class-action civil lawsuits were filed in Detroit and San Francisco against the alleged corporate co-conspirators, a group said to include buyers of these parts: Hutchinson Technology (Minnesota), Magnecomp Precision Technology (TDK subsidiary in Thailand), NAT Peripheral (Dong Guan, China and Hong Kong), NHK International Corporation (Michigan), NHK Spring (Thailand), NHK Spring Precision (Guangzhou, China), SAE Magnetics (Hong Kong), and TDK Corporation (Japan).

CD

Late $440m Christmas present for HP: Judge triples damages windfall from Quanta in CD-ROM drive price-fix showdown

READ MORE

Investigations into hard disk price fixing by US and Japanese authorities have been underway since at least 2016, when Japanese authorities raided the offices of NHK and TDK. Two years later, the Japanese Fair Trade Commission issued a cease-and-desist order to both companies, having determined that they colluded to set prices.

In 2018, Brazil's antitrust authority announced an investigation of five companies – Hutchinson Technology, Magnecomp Precision Technology, NHK Spring, TDK, and SAE Magnetics – and 38 individuals over allegations the firms divided the market up among themselves and set prices.

Over the past two decades, allegations of price fixing have been leveled against manufacturers of many different types of computer components, including DRAM, SRAM, optical disk drives, LCDs, capacitors, resistors, inductors, and the like. Collusion to sustain prices appears to be a common though illegal way companies try to survive when their products become commodities.

Tamura served as general manager of NHK's disk drive component sales division from approximately 2007 to 2013; Hashimoto occupied the same role from 2013 through 2016. The two Japanese citizens, if convicted in the US, face up to 10 years in prison and a fine of up to $1m, though it could be more if their personal gain or any victim's loss exceeds that amount. ®


Tech Resources

How backup modernization changes the ransomware game

If the thrill of backing up your data and wondering if you will ever see it again has worn off, start the new year by getting rid of the lingering pain of legacy backup. Bipul Sinha, CEO of the Cloud Data Management Company, Rubrik, and Miguel Zatarain, Director of Global Infrastructure Technology at PACCAR, Fortune 500 manufacturer of trucks and Rubrik customer, are talking to the Reg’s Tim Phillips about how to eliminate the costly, slow and spotty performance of legacy backup, and how to modernize your implementation in 2021 to make your business more resilient.

The State of Application Security 2020

Forrester analyzed the state of application security in 2020 and found over 75% of external attacks are attributed to web application and software exploits.

Webcast Slide Deck | Three reasons you need a hybrid multicloud

Businesses need their IT teams to operate applications and data in a hybrid environment spanning on-premises private and public clouds. But this poses many challenges, such as managing complex networking, re-architecting applications for the cloud, and managing multiple infrastructure silos. There is a pressing need for a single platform that addresses these challenges - a hybrid multicloud built for the digital innovation era. Just this Regcast to find out: Why hybrid multicloud is the ideal path to accelerate cloud migration.

Top 20 Private Cloud Questions Answered

Download this asset for straight answers to your top private cloud questions.

Biting the hand that feeds IT © 1998–2021