back to article HP scores $176m win in CD-ROM drive price-fix case – after one biz emailed rival with 'Price Fixing' as the subject

HP on Tuesday won a six-year court case against suppliers that it accused of price-fixing, with a jury in Texas awarding $176m to the US computer giant. Back in October 2013, HP accused no less than seven manufacturers of optical disc drives – Toshiba, Samsung, Sony, NEC, Panasonic, TEAC, and Quanta – of colluding together in …

  1. IGotOut

    I was on HP's side until....

    ...I read this line.

    “send a message to foreign suppliers that you better play by the rules when you're doing business in the United States,”

    Straight out of the Trump play book. If you thst worried about foreign suppliers ripping you off, why not buy from US suppliers? Oh I forgot, lowest bidder wins...which of course, despite the price fixing, still happended to be Johnny Foreigner.

    1. tfewster Silver badge
      Facepalm

      Re: I was on HP's side until....

      If we're talking about "fair"rather than "legal"...

      - Is it "fair" for a global giant to force potential suppliers into a public cut-throat bidding war?

      - Is it "fair" for suppliers to come to a gentlemens agreement not to participate in said war?

      - Is it "fair" to use the courts when your purchasing department fails to negotiate good prices?

      I may be naive when it comes to business purchasing. I've played suppliers off against each other myself, but a purchase decision is not solely about price.

      1. Jimmy2Cows Silver badge

        Re: I was on HP's side until....

        "Fair" doesn't feature in legal argument. Regardless of HP's possible negotiating ineptitude, companies actively collaborating to artificially raise prices is generally illegal.

  2. FozzyBear Silver badge
    Childcatcher

    HP employees were none the wiser to the scheme, telling the court they felt “betrayed” by people that they had long worked with.

    Is that Lawyer speak for

    "HP executives were pissed that their auction site idea did not get them the best price possible, whilst still adding a premium charge to the cost of the laptop. Therefore missing their sales/revenue targets and their grossly inflated bonuses. Ultimately leading to the oxygen thieves driving around in last years model BMW or not affording their new yacht. "

    1. macjules Silver badge

      Wait until HPE lose the Autonomy case. Then you will a wailing, gnashing of teeth and renting of clothing as Meg Whitman HP staff suffer.

  3. Kernel Silver badge

    So, now that that's all settled I guess the next thing we'll see related to this story is HP's announcement of how much everyone who bought an HP product with one of these 'price-fixed' drives in it will be getting as a refund and when they can expect to see the cheque slide into their mailbox - because we all know how keen HP is on not paying more than a fair and realistic price for something.

    1. d3vy Silver badge

      Fair point but given the quantities that they shipped over these years I suspect you'd be looking at a refund lower than the price of the stamp needed to post the cheque out to you.

  4. tcmonkey
    Joke

    I guess you could say that they had the drive to take this all the way to the court after being burnt before.

    ...I'll get me coat...

  5. Neoc
    WTF?

    So let me see if I've got this right.

    HP get charged high(er) prices for their ODDs.

    HP passes on these higher costs to the consumers via high(er) PC/laptop prices.

    HP finds out it could have gotten the ODDs cheaper.

    HP sues the ODD manufacturers.

    HP pockets millions in dollars.

    Consumers (who ended up paying the premium in the first place) get nothing.

    Yep, that makes perfect sense.

    1. d3vy Silver badge

      Re: So let me see if I've got this right.

      "HP passes on these higher costs to the consumers via high(er) PC/laptop prices"

      Possibly, but the price they can charge for their kit will be dictated by the market so it possible that this actually meant that they were forced to sell their PCs with a lower markup than their competitors who were not being gouged on the cost parts.

      1. TonyJ Silver badge

        Re: So let me see if I've got this right.

        "..."HP passes on these higher costs to the consumers via high(er) PC/laptop prices"

        Possibly, but the price they can charge for their kit will be dictated by the market so it possible that this actually meant that they were forced to sell their PCs with a lower markup than their competitors who were not being gouged on the cost parts...."

        This. I am far from a huge fan of HP(E) et al over the last decade or so, and it pains me to see the company that was a true innovator turned into a gouged-out, hollow, facsimlie of its former self, but in this case, it is easy to forget just how tight the margins on PC equipment has been over the years.

        I was at HP when Apothekar wanted to throw the PC business under the bus because the margins were so thin, completely and utterly forgetting that it was still generating billions annualy in actual profit at the time.

        As d3vy says, because of the other big players snapping at their heels (Dell, IBM/Lenovo, etc) HP wouldn't have been able to just increase the price of their PC's significantly oitherwise they'd simply lose the business.

        No, I am on the side of HP on this one, for once.

      2. 2Nick3

        Re: So let me see if I've got this right.

        Exactly - it's doubtful the price increase was extended to the customer. We are looking at commodity drives here, so the price increase was probably pretty low - if the price was overly-inflated someone would have noticed ("Gee, I can get that same drive cheaper at Best Buy!"). So if the supplier can get an extra $0.50 a drive, on a million drives, they net $500k, but since the consumer unit sales price is still going to be rounded up to the next $9.99 the increase was absorbed at that point by HP. And HP isn't going to change the number of drives they are ordering because of this, so it's pretty lucrative for the suppliers.

  6. AdamWill

    sending mails with "price fixing" in the subject...

    Looks like another bunch of idiots who forgot to read the first page of Doing Crime For Dummies...

  7. katrinab Silver badge
    Coat

    I bought an HP in the relevant period

    I've still got it, though the optical drive has been moved to The Big Box Of Computer Bits.

    How do I claim my refund?

    1. Jimmy2Cows Silver badge
      Holmes

      Re: I bought an HP in the relevant period

      The difference would be that (I assume?) you had a choice of which PC to buy, whereas HP had no choice in sourcing its ODDs, as all its suppliers were colaborating to bump the price up.

      PS: Apologies if I missed the joke :(

  8. Anonymous Coward
    Anonymous Coward

    Museum exhibit

    Optical disc drives?

    Next I suppose I'll walk into a supermarket and see a cassette!

    ROFL

    1. Anonymous Coward
      Anonymous Coward

      Re: Museum exhibit

      Just got yesterday X-rays from the hospital - on a CD.

      1. David 132 Silver badge
        Happy

        Re: Museum exhibit

        Well, it could be worse. No photography allowed in UK courts of justice, so they have “court artists”...

        “Here’s our hospital artist’s sketch of your X-rays, Mr AC.

        Ignore the ‘here be dragons’ in the lower corner, she trained as a cartographer and got bored colouring in all that space.”

        1. Andy Taylor

          Re: Museum exhibit

          Photograph may not be allowed in court, but computers/DVD players etc. may be used to display evidence.

      2. whitepines Silver badge
        Big Brother

        Re: Museum exhibit

        I'd take that CD and be glad...

        Alternative: You can't access this unless you:

        * Install a 5 gigabyte application on an official Microsoft Windows 10 PC

        * Accept a 50 page onerous agreement that says you have zero control over your data and will be spied on at all times

        * Have a fast Internet connection, since you can't download locally and have to use *their* viewer app to view the data streamed from *their* cloud servers...if it works at all. (note that the tracking will always work, somehow, just not the useful-ish bits you wanted to use)

        I'll take the CD, TYVM.

  9. Fruit and Nutcase Silver badge
    Facepalm

    Pot calling kettle black?

    If I understand this correctly...

    "Price Fixing" involves more than 1 actor, agreeing to set the price of an item higher than is reasonable or fair for the market.

    "Price Gouging" involves at least 1 actor, setting the price of an item higher than is reasonable or fair for the market.

    Anyone bought HP Printer Ink recently?

    1. Anonymous Coward
      Anonymous Coward

      Re: Pot calling kettle black?

      But you knew the price of the ink when you bought the printer right? Oh .....

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