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Lawsuit blames rising smartphone prices on Samsung price-fixing crucial components

Published Apr 30th, 2018 7:31PM EDT
DRAM prices 2018
Image: Lee Jin-man/AP/REX/Shutterstock

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It’s no secret that smartphone prices have been creeping upwards for the last few years. Some analysts blame the creep on manufacturers using increasingly expensive components as they try to innovate; others just say it’s a good old-fashioned cash grab. But a new lawsuit filed by a Washington-based law firm thinks that something quite different is to blame: Price-fixing in the DRAM industry.

Hagens Berman, a law firm with a long track record of class-action advocacy, believes that Samsung, Hynix, and Micron have colluded to limit the supply of certain DRAM products, which has driven an increase in prices. The firm is filing a class-action on behalf of US consumers of smartphones and computing devices, saying that anyone who purchased a smartphone or computer between July 1, 2016 and Feb. 1, 2018 may have overpaid and could be due restitution.

“What we’ve uncovered in the DRAM market is a classic antitrust, price-fixing scheme in which a small number of kingpin corporations hold the lion’s share of the market,” said Steve Berman, managing partner of Hagens Berman. “Instead of playing by the rules, Samsung, Micron and Hynix chose to put consumers in a chokehold, wringing the market for more profit.” The firm’s own antitrust attorneys — who have an impressive track record against the likes of Visa, Mastercard, and Apple’s e-book pricing — investigated the DRAM industry on their own initiative.

The DRAM industry is highly concentrated, and the firm claims that the price of a 4GB DRAM stick jumped by 130 percent in less than two years. In 2017, the only full year covered by the lawsuit, DRAM revenue expanded by 76 percent, while sales of smartphones and PCs remained nearly constant.

Hagens Berman won a similar action in 2006 when it sued 18 DRAM manufacturers on behalf of US-based purchasers of DRAM. Samsung, Micron, and Hynix were all found guilty in that case.

None of the companies named in the suit have commented publicly, although shares of SK Hynix closed down nearly 3 percent.

Chris Mills
Chris Mills News Editor

Chris Mills has been a news editor and writer for over 15 years, starting at Future Publishing, Gawker Media, and then BGR. He studied at McGill University in Quebec, Canada.