Late $440m Christmas present for HP: Judge triples damages windfall from Quanta in CD-ROM drive price-fix showdown A US judge on Friday tripled the damages Quanta Storage owes HP Inc to $439m for unlawfully hiking the price of optical disc drives. In October last year, a Texas jury awarded the American PC and printers giant a $176m windfall, footed by Quanta Storage for conspiring with rival manufacturers to inflate the price of optical …
I doubt HP just ate the inflated price of the devices; it most likely passed it on, with a generous markup to its customers. Could HP end up losing money because of having to reimburse the marked up amounts?
I know, justice is more selectively blind than that; but HP isn’t the hero here.
HP pays sony $50 for a dvd-drive; puts it in machine, charges customer $100 for it. Judge says sony was gouging, forces sony to give HP back $15 per drive. HP’s net cost drops to $35, so HP should only have charged customer $70. Does HP now reimburse its customer for over-charging? If 100% markup is fair; then HP should give every customer $30.
HP, arguably, suffered no harm from the collusion, presuming that dell, gateway, ... were also suffering from this cartel. The actual victim was the customer, who got to pay both Sony’s inflated price and HP’s inflated markup of that price. Really, this is not an anti-trust victory, but a cash grab by HP.
This
https://www.theregister.co.uk/2013/05/14/dell_court_case_odd/
Plus This
https://www.theregister.co.uk/2017/06/26/dell_drops_optical_drive_lawsuit/
Equals unsure?
Did Dell drop the lawsuit because they realized that if they won, they would be out of pocket? How did Acers wind up?
Since (Sony, Toshiba) sell computers as well as source optical drives, did they sue themselves? [ with acknowledgement to 'the rutles' ]
If 100% markup is fair; then HP should give every customer $30.
An HP Server in 1999 had a floppy drive fail a couple of months out of warranty. HP wanted $160 for a replacement floppy drive. I supplied a standard drive for $25 retail. I think HPs markup is slightly more than 100%.
The cartel's artificial inflation of part prices caused HP computers to be less competitive versus other options. If a Dell was even a bit less money than an HP, multiplied by a large number in a purchase acquisition, you are even more likely to choose Dell (HP's miserable long-term reliability, plus worse parts support, on mainstream products just adds salt to that wound).
:double thinks: Maybe that wasn't such a bad deal for customers after all! -_-
The Oz laws are excellent. The problem is the enforcement is shot to shit.
ACCC, primarily. As an example of their AWESOMENESS, they PROVED that there was no abuse of market power in the Aust'n Dairy Industry, and that therefore the farmers were fully protected and had no grounds for action and had to just suck it up and take whatever price the milk-processors told them to take.
They did this by setting up a test whereby the milk-processing oligopsony* would sell precisely the same milk to the supermarket binopsony under two different labels with two different prices. The ACCC howled with triumph when the report came back that the supermarkets had paid a higher price to the processors, and that the processors had captured all of that, passing none of it on to the farmers. Therefore proving that the market was working efficiently. And that there was no imbalance of market/bargaining power between farmers and milk-processors or farmers and supermarkets which needed redressing.
Seriously. They said that.
One of the more mind-scrambling pieces of publicly proudly presented "logic" I've ever come across.
.
* Monopoly = one entity's control of all supply; Monopsony = one entity's control of all purchases. Oligopoly = small number of entities etc.
As an indication of HOW fuckedup the ACCC is, internally, culturally, etc:
There was a big push by politicians+public some years back to derail the parasites infesting it, to get it to go back to doing its pre-parasites job, by imposing strict "performance metrics".
The only one not bowdlerised to pointlessness was the requirement to report the results of a survey of "External Parties"'s opinion of the ACCC, annually.
The ACCC management have their heads so far up their own faux-elite arses that they regard their own staff as outsiders, and the survey is run on the staff. Then reported as external.
"In October last year, a Texas jury awarded ..."
The original article is worth (re-) reading. I'd be interested to know how the damages compare to the amount of money that HP overpaid in the first place. They (HP) speak of billions of dollars of drives so it would only have to be a small percentage markup for the culprits to have effectively got away with it. (At least, until the damages got tripled. I expect that hurts.)
If the odds against actually getting caught are N:1, the damages need to start at N * the benefit of committing the crime. I do sometimes wonder whether lawmakers and judges understand this point. They often seem to feel that N=1, whereas business types (especially crooked ones) take a different view.
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