The rising cost of dynamic random-access memory (DRAM) is to blame for a recent rise in the cost of smartphones, claims a new class-action lawsuit. While this might sound like the norm with components costing more and therefore that cost being passed on to the consumer, the foundation of the lawsuit is the rising price of DRAM in recent years was not actually a result of a natural process. Instead, the lawsuit states DRAM pricing was artificially and illegally created by a minority of manufacturers, including Samsung.
The lawsuit, filed by Hagens Berman, on behalf of an unspecified number of consumers, specifically names Samsung, Hynix, and Micron as those behind the price-fixing issue, stating the companies “agreed to limit the supply of DRAM” with a view to artificially increasing its value. As a result of the majority of the DRAM market owned by these three companies, Hagens Berman suggests, they used that position of authority to construct and execute “a classic antitrust, price-fixing scheme.”
The lawsuit itself was filed on April 27, 2018, in the U.S. District Court for the Northern District of California, with Hagens Berman suggesting any individuals who purchased a smartphone (or any device that utilizes DRAM) between July 1, 2016 and Feb 1, 2018, may have been affected by the alleged scheme and can file their submission to join the class-action. These dates are of importance as the lawsuit alleges that an intentional and “simultaneous decision” was made in 2016 to reduce the continuation of what was a falling price associated with DRAM. This intentional decision then led to a reduction in the availability of DRAM compared to the years before, and once the price begun to rebound and “skyrocket upward,” the lawsuit argues the named-companies continued to maintain this new and artificial status quo by utilizing investor and industry statements as a means to communicate and coordinate with each other. The allegations state this method of artificially controlling DRAM supply and pricing continued throughout 2016 and 2017, and presumably, up until Feb 1, 2018. This is not the first time Hagens Berman has successfully negotiated a DRAM class-action lawsuit with $300 million having been secured for claimants relating to a similar case in 2006.