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Optical Drive Makers Turn To Cartel To Keep Their Business Afloat

July 25, 2012
Image Credit: Photos.com

Michael Harper for redOrbit.com — Your Universe Online

The European Commission has just sent out 13 Statement of Objection letters to members of an alleged CD and DVD drive cartel. The European Commission has informed these optical drive companies that they may have infringed against some EU antitrust regulations by participating in a cartel with members from all over the world.

The European Commission says they have “concerns” that 2 large companies may have organized this price-fixing behavior for all 13 companies, controlling the prices of optical drives used in both personal computers and in servers. Though the European Commission has sent out the Statement of Objections, this does not mean that these companies will be found guilty in a judgment.

“The Commission takes the preliminary view that the companies concerned engaged for at least five years in bid rigging, which is one of the most serious breaches of EU antitrust rules,” said the agency in their statement. Should these allegations be true, these 13 companies likely affected the price of the drives bought by a large number of consumers. According to the Commission, these companies have been engaged with this cartel for at least 5 years, rigging bids all the while. Bid rigging, as it turns out, is one of the most serious breaches of the EU´s antitrust rules.

As explained in the press release, this Statement of Objections is simply a formal step in the Commission´s investigations into these allegations and suspected violations of the EU´s antitrust rules. These rules have been set into place to prohibit these kinds of cartels and restrictive business practices, which can be damaging to both consumers and competing businesses.

With this Statement now sent to the 13 companies allegedly involved in this cartel, these companies can begin to examine the claims and documents against them, and are then allowed to reply, in writing, to each of the allegations against them before their cases go before the Commission.

According to the press release, these kinds of cartel investigations vary in length, depending on how many companies are involved, which companies are involved and how well these companies cooperate with the investigation. The press release didn´t, however, give any names of the 13 companies.

After these companies have taken a look at the charges against them and have responded in kind, the Commission will then meet to decide in there is enough evidence to wrong-doing to impose a fine against these companies. These fines can be pretty hefty, up to 10% of the alleged company´s annual worldwide turnover.

To help the process along, the Commission promises smaller fines and more lenient restrictions if these companies help with the investigation by providing specific details about the cartel.

Should these allegations be true, it´s little surprise that these companies are turning to illegal activity to keep their business afloat. After all, with the ever-growing amount of streaming options available for content, media and software, laptop users are putting their CD drives to work less often. Apple has even been making moves to eliminate these optical drives from their laptops in the MacBook Airs and MacBook Pros with Retina Displays. Now, we´ll have to wait and watch as this matter is sorted and resolved, all the while using our optical drives less and less.


Source: Michael Harper for redOrbit.com – Your Universe Online



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