The DRAM supplier agreed to the fine and a guilty plea in the Justice Department’s ongoing probe into DRAM pricing fixing. The DRAM market has terrible pricing pressures. Various suppliers, including Hynix and Infineon regularly agreed to pricing plans through email, telephone conversations, and face to face meetings. Naturally, this is a bad idea.
Industries can price intelligently without pricing illegally.
- For example, immediately matching competitors’ price cuts negates their competitive advantage. Hopefully, if the price leader catches on, they stop trying to game the market with price cuts.
- Similarly, following the price leader’s price increases signals that the industry will try to raise prices without leaving one player hanging out in the cold.
- Public announcements of price changes, such as to the press, for consumption by customers and partners (as well as competitors) are also useful. And legal.
Healthy industry pricing can help all players, while aggressive pricing can poison an industry and turn it into a profit-less area as quickly as dumping poison in a lake will kill the fish.