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Rambus Claims It Was Price-Fixing Target

Zonk posted more than 8 years ago | from the business-unusual dept.

138

conq writes "BusinessWeek reports on the latest developments in the Rambus/Micron saga over pricefixing." From the article: "One e-mail, dated June 5, 2001, from Micron Vice-President Linda Turner to other Micron employees was in response to worries about prices on DDR-DRAM that had been falling. 'No problem!,' Turner wrote. 'We want DDR to explode in the marketplace so have actually been requesting Infineon, Samsung, and Hynix to lower their DDR pricing to help it become a standard (and drive Rambus away completely).'"

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Is it? (-1, Offtopic)

Anonymous Coward | more than 8 years ago | (#15446109)

Fist Piss?

Re:Is it? (0)

Anonymous Coward | more than 8 years ago | (#15446418)

This fits the business practise of AMD, which has always been prone to ruin competitors by producing cheap, low-quality goods. That's asian companies for you.

Money grabbing jews (-1, Flamebait)

Anonymous Coward | more than 8 years ago | (#15446132)

the kind of guy nobody wanted to play with in the playground

Damn, where's the (3, Funny)

TheLevelHeadedOne (700023) | more than 8 years ago | (#15446134)

"crashed email server" when you need it...

Re:Damn, where's the (2, Funny)

Stoned4Life (926494) | more than 8 years ago | (#15446221)

I bet you won't find any RDRAM in the servers churning out all these old emails.

Thanks for that! (1)

Trigun (685027) | more than 8 years ago | (#15446154)

'We want DDR to explode in the marketplace so have actually been requesting Infineon, Samsung, and Hynix to lower their DDR pricing to help it become a standard (and drive Rambus away completely).'

So, the reason I had to shell out the high prices was because you wanted to not sell me the chips. Me and my wallet thank you.

Re:Thanks for that! (1, Funny)

Anonymous Coward | more than 8 years ago | (#15446381)

DDR pricing is ridiculous, I had to shell out $59.99 for DDR: Mario Mix with a dance mat included. I mean what are they thinking?

I have no idea what kind if game Rambus is, but they should get better marketing. I'm not gonna buy it if I don't even know what songs are included, geez.

Re:Thanks for that! (1)

pete6677 (681676) | more than 8 years ago | (#15446530)

Let us all take a moment to shed a tear for the patent troll known as Rambus. Karma is a real bitch.

Re:Thanks for that! (0)

Anonymous Coward | more than 8 years ago | (#15446748)

No - the reason you had to shell out the high prices was because you were stupid enough to buy Rambus.

Re:Thanks for that! (1)

Trigun (685027) | more than 8 years ago | (#15447105)

No, I didn't purchase the PCs. I had a P4 1.7ghz dropped in my lap because it was too slow to run XP. 128 megs of rambus, and a shitload of spyware didn't help matters, but it did need a memory upgrade.

Economics ?? (1)

Mafiew (620133) | more than 8 years ago | (#15446174)

This is ridiculous, price fixing of DDR would have been good for Rambus with their overpriced memory.

Re:Economics ?? (1)

Amouth (879122) | more than 8 years ago | (#15446195)

yea something isn't right here.. i though Rambus was price fixing.. tobe honest i thought they where dead.. where is this coming from.. or have i just been lost for a long while?

Re:Economics ?? (1)

mypalmike (454265) | more than 8 years ago | (#15446321)

i though Rambus was price fixing.. tobe honest i thought they where dead..

A company isn't dead until the lawyers have picked the carcass clean. I'd say "investors" instead of "lawyers", but the investors just get the bones.

Re:Economics ?? (1)

Azarael (896715) | more than 8 years ago | (#15446231)

Yes, but the summary states that DDR prices were being artificially lowered so that Rambus couldn't compete. So they aren't talking about price fixing in the, 'lets everyone jack up our prices and gouge the customer' sense.

Re:Economics ?? (4, Interesting)

LehiNephi (695428) | more than 8 years ago | (#15446336)

Rambus made this bed, now let them lie in it.

They made the mistake of trying to make a quick buck with their submarine patent, and they ticked off just about everybody. Including some very big players (Infineon, Samsung, Hynix, etc). This is just the big guys' way of exacting a very painful (and much-deserved) revenge. What the big memory makers did (assuming it's all true) may not have been legal, but boy, it sure feels good to see punks like Rambus writhe.

This ain't just business any more. It's personal.

Re:Economics ?? (1)

Azarael (896715) | more than 8 years ago | (#15446481)

I don't disagree that the Rambus has gotten what they deserved. Collusion tactics like that though are pretty harmful, as they ca drive a lot of smaller competitors out of business and possibly reducing competition and raising prices down the road (which those ddr players if I recall the /. articles). I'm not going to straight out say that that strategy should be black and white illegal, but I'm sure that it does more harm then good to the consumer.

Re:Economics ?? (1)

jafiwam (310805) | more than 8 years ago | (#15446912)

Rambus Way;

- Prices go and stay high
- Consumers lose
- Rambus wins

Other memory makers Way;

- prices dive and rambus croaks
- consumers win (for now)
- all memory makers compete one another as usual after
- maybe consumers win/maybe lose later

Gee. Looks like the choice is a probability of getting screwed vs the certainty of getting screwed for the consumer. I'd take a probability over a certainty any day.

If you really want to bitch about price fixing, how bout you start with Oil Companies and the Bush Cronies Regime first and go from there, mkay? Seems to me that what hurts the economy more is $15 for EVERY tank I fill up all year vs $40 once when I buy a computer.

Re:Economics ?? (1)

Andrzej Sawicki (921100) | more than 8 years ago | (#15447087)

Gee. Looks like the choice is a probability of getting screwed vs the certainty of getting screwed for the consumer. I'd take a probability over a certainty any day.
I'd as by how much, first. ;)

I mean, getting "screwed" by two bucks beats "maybe" getting screwed by a hundred, at least to me it does.

Reading Comprehension ?? (1)

Fhqwhgadss (905393) | more than 8 years ago | (#15446234)

'We want DDR to explode in the marketplace so have actually been requesting Infineon, Samsung, and Hynix to lower their DDR pricing to help it become a standard (and drive Rambus away completely).'

They're claiming that DDR manufacturers colluded to reduce prices, thereby taking a temporary hit in profit while driving Rambus out of business. All in the interest of future profits. Thank Wal*Mart for the idea.

Re:Reading Comprehension ?? (1)

GigsVT (208848) | more than 8 years ago | (#15446298)

You think WalMart is the first company to use predatory pricing? Come on, that's just ignorant. And that's assuming they even do. In my experience their prices don't go up, they stay low. It's not like they lower them just to drive someone out then raise them.

Re:Reading Comprehension ?? (1)

Fhqwhgadss (905393) | more than 8 years ago | (#15446436)

Poor wording on my part. Wal*Mart is just following the lead of other mega-corporations before it. I used them as an example because they are the most notorious company that uses the tactic today. And, yes, they do sell below cost; it's been demonstrated in court.

Re:Reading Comprehension ?? (1)

VolciMaster (821873) | more than 8 years ago | (#15446974)

they do sell below cost; it's been demonstrated in court.

And your point is...? I don't recall it being illegal to sell below your cost. It's probably not the cleverest thing you could do if you don't stop before you run out of cash, but it's legal AFAIK.

For example, nothing prevents me from starting a business selling bread (which I either make or get from suppliers like Wonder, Pepperidge Farm, et al) and selling every loaf for $1. If it costs me $2.50 to buy Pepperidge Farm and $1.50 to buy Wonder, but I want to sell them for a buck a pop - that's my prerogative.

If I have enough capital, I can do that and force others to either cut their prices or go out of business. But when I run out of capital, I will either go out of business, or be forced to raise my prices. It may be unethical, but it's not illegal - and if can be used to help people (ie folks who couldn't afford to pay $2.50, but can $1), then it's probably a laudable thing to do.

Whether or not Wal*Mart operates ethically or not is irrelevant for the moment, as is whether Micron's asking others to lower their prices. The question is whether or not it was illegal, and getting together to drop prices, which forces those who don't agree to compete, and encourages more people to buy the product, sounds like a perfectly legal, and even economically-sound concept.

Looks to me like Rambus is pissed they didn't join the party, and now they're left out in the cold.

Re:Reading Comprehension ?? (1)

gyrogeerloose (849181) | more than 8 years ago | (#15447396)

What you describe is called dumping and it is illegal in the United States.

Re:Reading Comprehension ?? (1)

Fhqwhgadss (905393) | more than 8 years ago | (#15447471)

And your point is...? I don't recall it being illegal to sell below your cost.

While simply selling below cost is not a problem in itself, selling below cost in order to drive out competition is predatory pricing which violates the Sherman Antitrust Act. That's my point.

Whether or not this is true in this case is up to the courts to decide, but it appears that predatory pricing is what Rambus is accusing Micron and the manufacturers of.

Re:Reading Comprehension ?? (0)

Anonymous Coward | more than 8 years ago | (#15447600)

You can buy a car battery, a skillet, a 20 pack of crayons, a Britney Spears CD, a ream of paper, and a 50lb bag of bird seed anywhere in a continental US Wal-Mart and they are the same exact price. Yes, that car battery at the Orlando Wal-Mart costs the same as the same car battery at a Seattle suburb Wal-Mart and the same price as Wal-Mart.com. What you are implying is that the stores set thier own prices and when Bills battery shop in Orlando goes out of business, Wal-Mart will raise the price of the batteries in Orlando. That is NOT the case and that does not happen to any measurable level. If it was the case then how are all of these products the same price everywhere in the US at any Wal-Mart? I am not pro Wal-Mart and I disagree with many of thier practices but you are not talking about something that actually does not happen on any type of percentage other then maybe incedental. It sounds cool to the anti Wal-Mart FUD spreaders though and those that like to group think instead of thinking by themselves.

Re:Reading Comprehension ?? (1)

japhmi (225606) | more than 8 years ago | (#15447652)

And, yes, they do sell below cost; it's been demonstrated in court.

Simply selling below cost isn't illegal. Almost all companies do it in order to get people into the store (so that they'll then buy something else).

Pricing enough items so that an entire store is loosing money until the other compaines go out of buisness is the problem.

Re:Reading Comprehension ?? (1)

statusbar (314703) | more than 8 years ago | (#15446592)

Regardless, betcha Wal-Mart has a patent on that very same business method!

--jeffk++

Re:Reading Comprehension ?? (1)

rhsanborn (773855) | more than 8 years ago | (#15446407)

IANAL, but, I think it really depends on how they asked the manufacturers to lower their prices. If they simply sent them a letter saying, we want to be lower, can you help? I can't imagine this will hold water.

IIRC, collusion is when they all set some artificial and generally equal, or close to equal price to establish a artificially inflated price, i.e. to ensure profit by not having someone else to undercut you.

I can understand that there are some similarities, but this looks like them sharing their strategy and asking the manufacturers for a little help.

Re:Economics ?? (1)

redfieldp (549286) | more than 8 years ago | (#15446606)

I think you're misunderstanding "price fixing": it doesn't have to be a high price that is fixed, necessarily. It can be any kind of activity to set a price point artificially: low or high.

Re:Economics ?? (1)

HotNeedleOfInquiry (598897) | more than 8 years ago | (#15446877)

Well, there's price fixing and there's getting a conviction on a price-fixing charge. From what I know and can tell, it seems highly unlikely that Micron could be convicted on a price-fixing charge. I'm pretty sure that for a conviction, there has to be a specific agreement to maintain a specific price between 2 or more parties. Not just "We want them to lower the prices".

Re:Economics ?? (0)

Anonymous Coward | more than 8 years ago | (#15446975)

I just looked up the definition and it says, higher.

Re:Economics ?? (1)

Mafiew (620133) | more than 8 years ago | (#15447712)

But it doesn't take collusion to lower prices. All one company would have to do is drop their prices then everyone else would have to follow.

Let's just say.... (3, Funny)

brian0918 (638904) | more than 8 years ago | (#15446208)

Let's just say that Linda Turner wasn't the fastest bit in the cache...

Re:Let's just say.... (1)

GPLDAN (732269) | more than 8 years ago | (#15446330)

I loved her in the The Bad and the Beautiful [cmgworldwide.com] . Her passionate kiss with Kirk Douglas was so racy for the time.

Rambus was overpriced and underperformed. (5, Insightful)

Otis2222222 (581406) | more than 8 years ago | (#15446214)

I still remember quite vividly the feud between Tom's Hardware Guide and Rambus that resulted in Rambus' stock price tumbling. Even if the other manufacturers kept their prices artificially low (which I doubt), Rambus was easily twice as expensive if not more than the same amount of DDR would have been. The fact that real world performance tests didn't back up the hype that Rambus promised was the nail in the coffin. If it was priced lower, they might have had something. I thought the technology had potential, but it's absurdly high price kept it from ever being realized.

Re:Rambus was overpriced and underperformed. (3, Informative)

MrAnnoyanceToYou (654053) | more than 8 years ago | (#15446575)

I remember that fight as well. In fact, I remember asking in an interview at Intel when I'd be able to get a motherboard with normal DDR instead of Rambus crud. (yes, I was young and stupid)

In reality, I think the entire fiasco which involved Rambus giving Intel a huge chunk of stock and Intel not producing (for a while) a chipset which worked with normal DDR SDRAM hurt Intel tremendously in the end. There's no way AMD would have gotten a foothold in a market where you didn't have to pay almost double for RAM that was not as good. I know I put off building a new computer for an extra two or three years because I didn't trust AMD quality at the time (probably wrongly) and I didn't want to pay for the huge extra cost of Rambus RAM.

The whole thing seems to me to imply price fixing towards the high direction instead of the low - seeing as at the time Intel had a pretty solid lock on the Windows market. Tom's Hardware gave AMD a great shot at breaking into that, I guess...

I wonder how much they paid for that.

Re:Rambus was overpriced and underperformed. (0, Troll)

Not_Wiggins (686627) | more than 8 years ago | (#15447023)

I wonder how much they paid for that.

Probably nothing. Just because a company's blunder gives a competitor a leg-up doesn't automatically imply the competitor had anything to do with it.

If I recall, Intel was (ineffectively) trying to utilize their monopoly on the processor/motherboard market to "encourage" the Rambus memory standard. They did this because they had a huge financial stake in Rambus. If they had succeeded, I'm sure we would have seen a flurry of lawsuits (ala the Microsoft/Netscape debacle) against Intel.

It isn't unlike the missteps of other companies trying (and failing) to use their market strength to push a proprietary standard:

  • IBM - Microchannel
  • Apple - AAC encoding
  • Sony - MemoryStick
  • Sony - MiniDisc
  • Sony - Blu-Ray (yet to be seen)

Re:Rambus was overpriced and underperformed. (0)

Anonymous Coward | more than 8 years ago | (#15447916)

AAC [wikipedia.org] isn't a proprietary standard.

Re:Rambus was overpriced and underperformed. (1)

KingMotley (944240) | more than 8 years ago | (#15447406)

Rambus was never easily twice the price as comparable SDR ram, except in really strange sizes that noone would have bought (I forget if it was the really low low end, or the really high high end of which SDR didn't even have a solution for at the time). I bought many systems with RDRAM 800, and a couple based on SDR where the only difference in the systems were the ram used. There was a HUGE performance difference between the two systems, a very noticable one.

The article makes a mistake when it mentions that DDR was available, but they neglect to mention that at the time DDR came out (With 2100MB/s bandwidth), double-pumped, 1066Mhz RDRAM was already available (4264MB/s) and quad-pumped double banked sticks were working in prototype (17056MB/s). Unfortunately by this time Rambus was already pretty much dead in the PC market, after all the bad publicity and never had a mainstream chipset support the advances beyond single pumped 1066Mhz.

Or more likely... (5, Informative)

LordKazan (558383) | more than 8 years ago | (#15446220)

... it was the fact that Rambus is SHIT

"PC800 RDRAM, which operated at 800 MHz and delivered 1600 MB/s of bandwidth over a 16 bit bus using a 184 pin RIMM form factor"

"Compared to other current standards, Rambus shows significantly increased latency, heat output, manufacturing complexity, and cost.[citation needed] PC800 RDRAM operated with a latency of 45ns, compared to only 7.5ns for PC133 SDRAM."

then squashed by

"DDR SDRAM, introduced in 2000, operated at an effective clockspeed of 266 MHz and delivered 2100 MB/s over a 64-bit bus using a 184 pin DIMM form factor."

not to mention needing CRIMMS or whatever they called the terminators

http://en.wikipedia.org/wiki/RDRAM [wikipedia.org]
http://en.wikipedia.org/wiki/DDR_SDRAM [wikipedia.org]

Re:Or more likely... (3, Insightful)

NutscrapeSucks (446616) | more than 8 years ago | (#15446540)

RAMBUS wasn't really shit -- it had about a 20% advantage in workstation performance over SDRAM -- until DDR came out.

Even at the price, it was still cheaper to buy RDRAM than a 20% faster CPU for a reasonable RAM config. (Although I'm glad my employer paid for it rather than myself, because those machines are impossible-to-upgrade lead balloons nowdays.)

Hate to be the guy defending RAMBUS, but much of the anti-RAMBUS attitude was driven by Memory Cartel propaganda.

Re:Or more likely... (1)

The Snowman (116231) | more than 8 years ago | (#15447972)

RAMBUS wasn't really shit -- it had about a 20% advantage in workstation performance over SDRAM -- until DDR came out.

RDRAM is based on the same premise behind USB and SATA: cut the number of bits transmitted and increase the frequency to get higher throughput. This is a method that is proven to work. However, Rambus brought their technology to market before it was mature. They promised a simpler design, fewer errors, higher throughput. What they delivered was a complex mess of overheating chips that didn't perform up to its potential. They needed more time to develop RDRAM and to allow it to mature. That and not to submit submarine patents as standards. That pissed some people off, too.

Eventually I think we will see memory using the same ideas behind RDRAM, but implemented better. Modern motherboards are extremely complex in part because of the memory. That is a lot of traces and a lot of bits to move very quickly and in sync. This complexity is proven to cause problems, which is why we are unlikely to see 128 bit RAM anytime soon. I doubt we'll see truly serial (1 bit) RAM either, but I think fewer bits at a higher frequency is the answer. It will just take time for the technology to mature.

Re:Or more likely... (1)

KingMotley (944240) | more than 8 years ago | (#15447934)

then squashed by

"DDR SDRAM, introduced in 2000, operated at an effective clockspeed of 266 MHz and delivered 2100 MB/s over a 64-bit bus using a 184 pin DIMM form factor."


It would have been squashed if Dual-bank RDRAM 800 wasn't already mainstream delivering 3200 MB/s at the time. While RDRAM was more expensive (About 5%, not the over "double" some people quote), motherboards were less expensive to make and produce because there wasn't a need to have nearly as many traces running to and from the ram banks, and they didn't have to be all the same length. Many times after purchasing an entire system, the RDRAM based solution was $10 more than the SDR/DDR based one (Out of $1400), and they ran significantly faster in most applications (10-20% faster).

You can say what you want about Rambus, because the company did do some unethical things, but RDRAM was and still is a vastly superior product technically to SDR/DDR. The current RDRAM is called XDR2, and has over 10 MB/s bandwidth per bank. Over 20 MB/s if you have dual banks. DDR isn't even in the same ballpark. Never was.

Where's the problem? (4, Funny)

thelem (218540) | more than 8 years ago | (#15446244)

Is keeping prices artificially low actually illegal? Governments normally support anything that benefits the consumer.

Re:Where's the problem? (2, Informative)

MeanMF (631837) | more than 8 years ago | (#15446276)

"Dumping" is illegal.. That's when you sell something at an artificially low price for a period of time in order to gain market share or drive a competitor out of business.

Re:Where's the problem? (0)

Anonymous Coward | more than 8 years ago | (#15446619)

Doesn't WalMart do that regularly?

Re:Where's the problem? (1)

eln (21727) | more than 8 years ago | (#15446384)

Governments normally support anything that benefits the consumer.

That may be the funniest thing I've ever heard.

Re:Where's the problem? (2, Informative)

nickname225 (840560) | more than 8 years ago | (#15446406)

I am a lawyer - although antitrust is not my area of practice. The general rule is that any sort of collusion between nominal competitors is illegal. So- it doesn't matter if they are colluding to raise the price - or to lower it. Competitors can't coordinate their pricing.

Re:Where's the problem? (1)

Mayhem178 (920970) | more than 8 years ago | (#15446485)

This seems to be a double-edged sword though. Unless I'm looking at this wrong, doesn't this also prevent the little guys from gaining an advantage on the "playground bully," as it were? Maybe that's the point, though.

Re:Where's the problem? (1)

nickname225 (840560) | more than 8 years ago | (#15446613)

It prevents the little guys from getting an advantage by colluding - they are still free to get an advantage by making a superior product or by taking advantage of a more flexible manufacturing process or differing capital structure to get it to market cheaper.

Re:Where's the problem? (1)

jesuscyborg (903402) | more than 8 years ago | (#15446549)

"Is keeping prices artificially low actually illegal? Governments normally support anything that benefits the consumer."

The reason this sort of price fixing is illegal is because what originally happened was businesses would lower prices to drive out the competition while taking a big loss. Once the competition was gone, they would artificially inflate their prices to gain a huge profit and there would be no competition to stop them.

Those who can, do, those who can't, sue... (4, Insightful)

Opportunist (166417) | more than 8 years ago | (#15446267)

Again.

If your product does not hit the market as it should, sue someone. Sue "Linux", to save your outdated product, sue your competitor for some meaningless patent hassle or, and here's the actually as far as I can judge ONLY new bit in this, some cartel building.

What happened to good ol' free commerce, where the best product makes the buck? Been coffined and buried by lawyers and marketeers long ago, I know...

Re:Those who can, do, those who can't, sue... (1)

Red Flayer (890720) | more than 8 years ago | (#15446620)

"What happened to good ol' free commerce, where the best product makes the buck? "

Whatever happened to collusion not being part of good ol' free commerce?

This lawsuit is based on the concept that free commerce (and therefore competition) was not allowed to happen because of collusion. Reagrdless of whether Rambus was terrible or not, there is merit in these types of lawsuits.

It's very simple: Unregulated commerce != free commerce. It's "free" as in free of non-competitive influences, not as in free from regulation.

Rambus is the Eolas of Hardware (1)

stevesliva (648202) | more than 8 years ago | (#15446293)

Assert patents against widespread technology, sue like crazy. I guess it's just good for the Microsoft execs that they were already fixing the price of web browsers at "free." If the memory companies had just decided to give away the chips, rather then make them cheap, would it be different? Perhaps they should have "bundled" them.

Re:Rambus is the Eolas of Hardware (1)

joebooty (967881) | more than 8 years ago | (#15446383)

Indeed.

Rambus are NOT the good guys by any means. Much of their technology is items that they patented based off of collaborative industry works from trade conferences.

Essentially "Hey intel/micron/samsung lets talk about new volatile memory methodologies. Ok thanks for coming... runs to file patents"

Rambus are not semiconductor manufacturers, they are patent litigators and their patents are largely nonsense.

Re:Rambus is the Eolas of Hardware (1)

NutscrapeSucks (446616) | more than 8 years ago | (#15446461)

Rambus won their case. The "Memory Cartel" was smashed by the government in one of the biggest antitrust cases in history. Yet easily-manipulated pinheads such as yourself are still repeating the same tired Cartel propaganda that you read on Tom's Hardware.

Here's a link for the benefit of your fellow ignormaouses who might want to educate themselves.
http://www.theinquirer.net/?article=27993 [theinquirer.net]

And yes this is a flame. It's ridiclous how easy it is for companies to manipulate and use computer nerds. Just feed them some FUD and they'll believe it until the day they die.

Re:Rambus is the Eolas of Hardware (1)

statusbar (314703) | more than 8 years ago | (#15446704)

Regardless of their winnings in court, RAMBUS played very dirty pool with JEDEC. The JEDEC IP policies have changed as a result.

--jeffk++

Re:Rambus is the Eolas of Hardware (1)

stevesliva (648202) | more than 8 years ago | (#15447074)

Did you ever think that you're swallowing Rambus FUD? I really don't care that the Dramurai got screwed in court, but Rambus conduct in standards bodies was less than admirable. And yes, the FTC lost its case alleging miscouduct by Rambus, but certainly the allegations are enough to draw the ire of any fan of open standards:
"Apr 04 FTC CC Appeal: "The importance of this case justifies careful Commission review. The outcome will determine whether Rambus can continue to assert monopoly power, through its patents, over technologies incorporated in the supposedly open JEDEC standards that govern the worldwide DRAM memory chip industry. The royalties collected by Rambus would apply to virtually all DRAMs sold by the $20 billion memory industry. DRAM chips are used throughout the economy in products including personal computers, mainframe computers, consumer electronics products, and telecommunications routers and switches. Rambus has also sought royalties on memory controllers and other components that interface with DRAMs. Rambus estimates that these royalties could amount to $1-3 billion, a cost likely to be imposed on consumers. Of equal concern is the potential harm to the ability of JEDEC to continue to set open consensus-based standards. Members failure to participate in JEDEC in good faith or to observe the JEDEC patent disclosure policy could destroy the work of JEDEC because JEDEC will no longer have companies willing to join the work of creating standards. CX2384. The activities of other standard-setting organizations also are likely to be hurt. The Commission should correct the mistakes of law contained in the Initial Decision. Although the ALJ s erroneous interpretation of the scope of Section 5 is of utmost concern, his standards for causation and anticompetitive harm also could have serious implications if followed by other judges or courts and could set dangerous precedent if not corrected by the Commission. For the reasons set forth above, Complaint Counsel believe that the Commission should vacate the initial decision in this matter, substitute its own findings and decision holding that Rambus violated Section 5 of the FTC Act, and adopt the proposed Order."
I tend to agree with the FTC. I don't think that every manufacturer of an interface developed by a standards process should be paying royalties to leeches.

Wait... (2, Interesting)

NalosLayor (958307) | more than 8 years ago | (#15446297)

...an executive at a company suggested that he (and his competetors) lower prices in order to entice more consumers to purchase his product over the opposing standard? Scandalous! Criminal charges should be filed immediately! It's un-American, I tells ya!

Collusion Not Always An Antirust Violation (3, Interesting)

aldheorte (162967) | more than 8 years ago | (#15446345)

"The companies worked together to improve prices on a competing type of memory chip in order to discourage computer makers like Dell (DELL), Hewlett-Packard (HPQ), Gateway (GTW), and others from adopting a type of memory known as Direct Rambus Dynamic Random Access Memory (RDRAM) in their computers, and instead favor a competing type of memory chip known as Double Data Rate DRAM (DDR-DRAM)."

If RAMBUS wants to push this one, they have to reveal something beyond Micron et al attempting to lower prices for consumers across the board. If they could prove that their alternative had the same cost basis and Micron et all lowered prices solely to drive them out of business so they could all then simultaneously raise prices back up, and in fact did so, then they would have something, but it doesn't not sound like they had a cheaper solution or that Micron et al were losing money to drive them out of business to raise prices back up. Collusion is not illegal if it works in favor of consumers. I think a lot of people fail to realize that antirust laws and the like exist to protect consumers, not protect businesses from competition (which is why a government entity is the one who generally prosecutes antitrust cases "for the people").

AntiTrust (1)

aldheorte (162967) | more than 8 years ago | (#15446386)

Well, I suppose collusion is not always an antirust violation as well, but antiTrust makes more sense given the context. Damn typos.

Re:Collusion Not Always An Antirust Violation (1)

Znork (31774) | more than 8 years ago | (#15446559)

"antirust laws and the like exist to protect consumers, not protect businesses from competition"

The laws to protect businesses from competition can instead be found under the heading 'intellectual property laws'.

Personally, I dont think I knew any self respecting geek those days who'd be caught dead buying Rambus RAM. Their name was shit from the day their patent troll behaviour hit the news.

Re:Collusion Not Always An Antirust Violation (3, Informative)

NutscrapeSucks (446616) | more than 8 years ago | (#15446616)

why a government entity is the one who generally prosecutes antitrust cases "for the people"

Dude, the government did procecute them, and the RAM companies have already admitted guilt in price-fixing. This story is filled with very ignorant commenters.

http://arstechnica.com/news.ars/post/20051013-5429 .html [arstechnica.com]
http://arstechnica.com/news.ars/post/20040915-4189 .html [arstechnica.com]

Re:Collusion Not Always An Antirust Violation (1)

aldheorte (162967) | more than 8 years ago | (#15447946)

"Dude, the government did procecute them, and the RAM companies have already admitted guilt in price-fixing."

Sure, but not in this particular instance. Please look up "Commutation of Conditionals" or the "Fallacy of the Consequent" for why your argument has run off track. You are stating that the companies have been found guilty of price fixing in some instances, therefore they are guilty of price fixing in this instance, which does not logically hold.

Re:Collusion Not Always An Antirust Violation (1)

jkabbe (631234) | more than 8 years ago | (#15446629)

Collusion is not illegal if it works in favor of consumers. I think a lot of people fail to realize that antirust laws and the like exist to protect consumers, not protect businesses from competition (which is why a government entity is the one who generally prosecutes antitrust cases "for the people")

I think this is generally true. But you have to remember that the assumption is that reducing competition (by, for instance, driving a competitor out of business to create a monopoly or de facto monopoly in the form of a cartel) is presumed to harm consumers. Even if it means lower prices initially, the assumption is that once competition is reduced, prices will go up and innovation will go down. Of course, the only way to prevent this from happening is to create rules that keep companies from using certain tactics (like price fixing) to drive other companies out of business.

Price fixing...technically? (4, Insightful)

dvdsmith (892766) | more than 8 years ago | (#15446367)

First, IANAL. Second, if some would RTFA, they would realize the price fixing here involved LOWERING prices. Historically, to my knowledge, accusations of price fixing have normally been made when separate parties agree to not compete and keep prices at a certain level. Here we have SOME competitors ecouraging each other to lower their prices below that of a common enemy, possibly at a loss in order to make better profits down the road. Laws against price fixing are meant to encourage competition, and IMO this is competitive behavior. Am I wrong?

Re:Price fixing...technically? (1)

trazom28 (134909) | more than 8 years ago | (#15446466)

That's what came to mind when I first read TFA.. it comes across as.. "hey.. this new thing is out, and it's going to affect all of us - let's get competitive".

An indirect analogy comes to mind.. such as when a large retailer prices at a loss to force out other competition, then brings prices inline with the rest of the chain. How is this different than a large group got together, lowered prices, and forced the competition out?

Re:Price fixing...technically? (1)

dvdsmith (892766) | more than 8 years ago | (#15446489)

Oops, I think I AM wrong. :) I just did a little reading, and from what I can tell, competitors aren't supposed to do this, no matter the circustances. Is there a lawyer in the house?

Re:Price fixing...technically? (4, Informative)

nickname225 (840560) | more than 8 years ago | (#15446491)

I am a lawyer - and yes you are wrong. Colluding with a nominal competitor to lower prices to force a 3rd competitor out of business or to drop a product line is anti-competitive, both legally and actually. The concern is that once the colluding parties have succeeded in driving the competitor out of the market - they can divide it up between them and price as they please. Like many laws - some portions of the antitrust laws are designed to avoid the creation of potentially abusive situations. So while on the surface colluding to lower prices seems like a public good - in fact it is potentially a large public evil. This was a tactic used to great effect by John D. Rockefeller - Standard Oil would open a gas station across the street from an independent station - and lower prices untilt he other station went out of business and then raise prices. This sourt of actual abuse shows the logic behind the antitrust laws.

Re:Price fixing...technically? (1)

dvdsmith (892766) | more than 8 years ago | (#15446518)

Thanks for that. Learn something new every day. :) Is this sort of thing hard prove in an court of law without an outright admission (like in this case)?

Re:Price fixing...technically? (1)

nickname225 (840560) | more than 8 years ago | (#15446660)

Yes antitrust cases are fairly difficult to prove. You need to find evidence of collusion - like the e-mails in this case. The problem is that companies often simply follow each others pricing moves in order to stay competitive - so just a pattern of common pricing is generally not enough for an antitrust suit.

Re:Price fixing...technically? (1)

Xaositecte (897197) | more than 8 years ago | (#15446501)

Collusion laws are usually worded so they apply to any group working togather without the consumer's knowledge to manipulate the market for their gain. It often takes the form of keeping prices artificially high, but doesn't necessarily have to.

This is uncompetitive behavior = illegal (1)

tppublic (899574) | more than 8 years ago | (#15446544)

"This Court reviewed the various price-fixing cases under the Sherman Act beginning with United States v. Trans-Missouri Freight Association, 166 U.S. 290 , 17 S.Ct. 540, and United States v. Joint Traffic Association, 171 U.S. 505 , 19 S.Ct. 25, and said '... it has since often been decided and always assumed that uniform [310 U.S. 150, 213] price-fixing by those controlling in any substantial manner a trade or business in interstate commerce is prohibited by the Sherman Law, despite the reasonableness of the particular prices agreed upon.'"

"Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se"

-- U.S. Supreme Court - U. S. v. SOCONY-VACUUM OIL CO., 310 U.S. 150 (1940) [findlaw.com]

QFT (1)

iceperson (582205) | more than 8 years ago | (#15446678)

If this was an example of gas companies colluding to drive out a competitor who's coming to market with an alternative fuel the slashdot crowd would be up in arms.

Re:QFT (1)

dvdsmith (892766) | more than 8 years ago | (#15447893)

I agree in principle, however.... The difference here IMO is that Micron et al did us all a favor by forcing RDRAM out of the market sooner rather than later. It was already higher priced before the collusion, and it only survived as long as it did due to Intel's backing. Just

My point is many are willing to turn a blind eye if they feel it benefited the industry and/or consumers in the long run.

Re:Price fixing...technically? (1)

Software (179033) | more than 8 years ago | (#15446697)

IANAL, also, but I think the best model to follow w.r.t. talking about prices with your competitors is the "Fight Club" model: the first rule about talking about prices with your competitors is that you do NOT talk about prices with your competitors.

Re:Price fixing...technically? (1)

Beryllium Sphere(tm) (193358) | more than 8 years ago | (#15447372)

>IMO this is competitive behavior.

Case 1: Goal is to serve customers better. Competitor goes out of business as all their customers prefer you. Example: Linus Torvalds, saying "Really, I'm not out to destroy Microsoft. That will just be a completely unintentional side effect. " Later competitors see a chance to try the same thing on you and take your place.

Case 1 is competitive hehavior.

Case 2: Goal is to "cut off their air supply". Competitor goes out of business regardless of customer preference because you ran a war of financial attrition. Further competition is discouraged.

Case 2 is not considered competitive behavior, at least not if you're a monopoly.

niggya (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15446412)

Nonsense (1)

Dachannien (617929) | more than 8 years ago | (#15446446)

This is nonsense. Micron could achieve the same objective by simply lowering their prices. Infineon, Samsung, etc., would end up lowering their prices as well in order to stay competitive, and the overpriced, underperforming Rambus would suffer all the same. Micron informing its competitors of the reason for the price cut is merely a courtesy.

Re:Nonsense (1)

Ryan C. (159039) | more than 8 years ago | (#15447424)

This is nonsense. Micron could achieve the same objective by simply lowering their prices.

Probably. That's what game theory would predict. And that's what they should have done, it would have been legal.

Micron informing its competitors of the reason for the price cut is merely a courtesy.

Nope. It's a very important and damning point. That direct information sharing is the definition of overt collusion, and it's illegal. They should have been smarter and just hinted at it in a press release or stock analyst meeting.

The fact that they *could* have easily done the same thing legally does not make their actions legal, it just makes them stupid.

so uhh.. (1)

hypergreatthing (254983) | more than 8 years ago | (#15446479)

How is this price fixing? Price fixing to me is setting a high price and coluding with others to keep it high.

The opposite shouldn't be called price fixing... more like... competition?

Hell, if this is price fixing, what the hell is going on with gas then? I'd much rather have them all colude and lower the price.

Re:so uhh.. (1)

Tweekster (949766) | more than 8 years ago | (#15446526)

No, price fixing is colluding to set a price at any amount.

Re:so uhh.. (1)

hypergreatthing (254983) | more than 8 years ago | (#15446614)

So lets see, how does one set a price?

Take a dartboard and see what number a dart lands on?

Or do you look at the market and decide what's a good price for anything you're trying to sell?

So it somehow makes it different if you call up the other company and ask them what price they're selling at?

Truth of the matter is, DDR memory companies had competition with RamBus. If they talked to one another and decided to sell for a low price, how is that price fixing? Are you saying that no competition took place between the DDR memory companies? Lowering prices is a direct result of competition in any market.

Price fixing should only be when a product is sold across the board at an inflated price with no competition from multiple companies. This is definately not the case here.

Re:so uhh.. (1)

Pope (17780) | more than 8 years ago | (#15446941)

If they talked to one another and decided to sell for a low price, how is that price fixing? Are you saying that no competition took place between the DDR memory companies?

1: I'll let you think about that for a second. OK, time's up. The DDR companies all agreed on pricing structures, this is collusion. If they all agree to sell at the same price, regardless of their own profit margins and manufacturing costs, that is most assuredly price fixing. They are FIXING the PRICE of their product.

2: Correct. They colluded to FIX their PRICES to drive RDRAM out of the market.

Re:so uhh.. (1)

belg4mit (152620) | more than 8 years ago | (#15447027)

You look at what other's are charging, decide what kind of margin you want given your costs and pick a price.
As others have said price-fixing is collusion, that is *any overt communication regarding market conditions*.
Look up Standard Oil.

Really? (1)

iceperson (582205) | more than 8 years ago | (#15446604)

What if gas companies simply colluded to lower the price with the expectation of driving companies that offered alternative fuels out of the market so that they could see bigger gains in the future? Would you feel the same way?

Re:Really? (1)

hypergreatthing (254983) | more than 8 years ago | (#15446732)

It's called competition any way you look at it. If they're trying to compete with the future, go for it.

Do you think there are no alternatives to gasoline prices? There are lots of alternatives, they're just more expensive currently. I saw a proposal to grow trees into biofuel once somewhere, the problem was that it would be as expensive as oil priced at 80$ a barrel.

Then again, why do you think oil was priced low in the past? OPEC has said many times that they don't like to see oil priced higher than 40$ a barrel because it would lead to the production of alternative fuels.

Humor me... (1)

iceperson (582205) | more than 8 years ago | (#15447169)

Just making sure I'm clear that you support Exxon, Mobil, and Chevron station's rights to get together and collude to sell fuel for less than Billy Ray's Gas Shack in order to run Billy Ray out of business and maintain their market share. Do I have that right?

Re:Humor me... (1)

hypergreatthing (254983) | more than 8 years ago | (#15447382)

Explain the difference of that and Walmart moving into town, buying a bulk and selling much less than any mom and pop store can afford to sell at.

The difference is when they raise prices after the competition has been knocked out. If they don't raise the prices when they eliminated the competition, there is no real price fixing going on.

Re:Humor me... (1)

iceperson (582205) | more than 8 years ago | (#15447989)

So that's a yes?

Re:Really? (0)

Anonymous Coward | more than 8 years ago | (#15447735)

"What if gas companies simply colluded to lower the price with the expectation of driving companies that offered alternative fuels out of the market so that they could see bigger gains in the future?"

This is precisely what happened with oil and it gives us the high prices we have today. The oil producing countrys lowered oil prices (by increasing production) so that shale oil and tar sands could not compete. When those shale and sands investments went bust, they made it very difficult for anyone to put up the kind of investments needed to compete with liquid oil any time in the next few decades. Viola, lower prices creates higher prices.

DDR (1, Funny)

Anonymous Coward | more than 8 years ago | (#15446533)

I think DDR exploded in the marketplace as soon as it was available for two player competition at the local mall arcade.

I remember... (1)

suv4x4 (956391) | more than 8 years ago | (#15446586)

... when Rambus was still booming, together with the new (at the time) P4 chips by Intel, they were somewhat faster than the rest, but a lot more expensive.

I actually remember people being dissapointed that P4 "requires" (this is how it was marketed) Rambus memory to show its full potential, and pretty much avoided Rambus like the plague for its proprietary nature and the hefty price.

And of course in time Rambus lost its speed advantage as well, which drove it into non-existence.

Makes me wonder if the additional lowering of the prices by the DDR manifacturers was required and did it matter for driving Rambus out of the market. It seemed a lame duck from day 1.

Re:I remember... (0)

Anonymous Coward | more than 8 years ago | (#15446940)

Quote:
    And of course in time Rambus lost its speed advantage as well, which drove it into non-existence.

Oh, Rambus still exists. The committees working on DDR2 and the fully-buffered DIMM (FB-DIMM) are spending too much of their time working around Rambus patents rather than designing a good product. The company is a cancer on the electronics industry.

-A

Collusion and rights (5, Interesting)

Anonymous Coward | more than 8 years ago | (#15447026)

Take a look at the prices of state-of-the-art SDRAM before and while RDRAM was on the market. Notice how 66Mhz 16- and 32MB SIMMs start out pretty expensive in the mid to late nineties, and are later replaced by equally expensive PC100 SDRAM. Then the price of PC100 SDRAM suddenly drops around 1999 to dirt cheap, and then the cheap PC100 is supplanted by equally cheap PC133, PC150, and PC200 SDRAM. Then just a short while later, really expensive DDR SDRAM with data rates in multiple gigabits per second hits the market and we've been paying for memory in a new higher price range than the old pre-RDRAM high price range ever since.

Now correlate that with the introduction and failure of RDRAM in the market and you'll see that PC100 prices dropped not long after it was introduced, and then fast, expensive DDR SDRAM came to market around the time RDRAM became irrelevant. Of course, that's just circumstancial. A lot of different market forces could have caused that kind of price movement.

RDRAM had a lot of technical problems with it. It did run hot, it did ride on funky slots, it was complex to manufacture, and for a variety of reasons, it cost a lot of money, not least because Rambus wanted to recoup the costs of developing the one advantage that RDRAM actually did have. That one advantage was that RDRAM was as fast as Intel's top-shelf CPUs. You could build a PC with a 400 Mhz Pentium II, a 400 Mhz FSB, a 400 Mhz north bridge, and a 400 Mhz memory bus leading straight into 400 Mhz memory, but only if that memory was RDRAM. Of course, 200 or 266 Mhz would have been just fine for most applications and even for most benchmarks. Matching speed with the CPU was overkill and Tom's Hardware knew it, among others.

The things that made RDRAM faster than contemporaneous commodity RAM were the patented designs of Rambus. Their problem was that they came to market seeking tech journo headlines at a time when the average PC consumer was fixated on the CPU speed, assuming that if they could match CPU speed with their RAM and get it written up, people would 1) stop fixating on CPU speed and 2) notice that commodity RAM wasn't cutting the mustard anymore.... and they overdid it, and overdoing it cost more than it needed to all the way down to retail.

Having said that, the evidence is only now coming to light that RDRAM wasn't killed by its own problems. It was killed by commodity RAM manufacturers flooding the market with cheap PC100 and PC133 RAM. So cheap that the cost curve of settling on the faster RDRAM part didn't make economic sense for most system integrators or their customers, despite the technical advantage. So RDRAM dies a quiet death of irrelevance around roughly 2002. Boo-hoo.

What happened next is the part that Rambus is currently seeking redress for. DDR SDRAM came to market, and we all know how it works and why it's exactly twice as fast as conventional SDRAM. What most people don't seem to understand is that RDRAM was DDR. That 400 Mhz RDRAM part actually used a 200 Mhz clock, and the FSB, north bridge, and memory bus of an RDRAM-capable motherboard were also DDR. Rambus developed DDR and holds the patent on it, among other things that have shown up in modern commodity RAM.

So let's recap. Rambus came to market with a problematic yet superior product which was ahead of its time in a market dominated by a few large manufacturers of commodity parts. The major manufacturers got in touch with each other to temporarily fix prices far too low to justify adoption of the problematic yet superior product which was ahead of its time. RDRAM became irrelevant, and the major manufacturers believed that Rambus had also become irrelevant. Once that happened they started using Rambus technology in their own products as the market needed it, while colluding to bump prices back up where they wanted them all along.

Since then, the post-RDRAM high price fixing has been proven in court. Rambus has kissed and made up with Infineon and Elpida with patent licenses and settlements. Does your Infineon and Elpida RAM feel more expensive to you, the consumer, than your Micron or Hynix RAM? I'll give you a hint, it isn't... Infineon and Elpida are giving Rambus's fair share back to them out of their inflated profit margin without passing it on to you. Rambus's patent validity has been proven in court, and Hynix's infringement has been proven in court, but of course they are still trying to wiggle their way out of it.

So say what you will about patents, patent law, patent litigation, and patent licensing (I have my own quarrels with the lot), but the fact is that the way all of those things work right here and right now, Rambus is owed a lot of money.

(In the intrest of disclosure, I do own a small piece of RMBS pie)

And this is news... why? (0)

Anonymous Coward | more than 8 years ago | (#15447173)

Maybe I'm just jaded because my workplace still has a bunch of Dell boxes that use the always-ridiculously-overpriced Rambus RDRAM (they're just as absurdly expensive as they were when Intel stupidly backed that over-patented pony), so I get pissed off every time we have to buy more RAM for those boxes... but I don't see any news here.

I RTFA and all I see is competitors wanting their competition to go away. Big whoop. The price fixing is a separate issue, has nothing to do with the lawsuit between Rambus & chip makers.

So what if one of Rambus' competitors wanted Rambus to die a horrible, nasty death - if Rambus didn't like it, they need to do the Microsoft thing and buy their competition. Given the ridiculous amount of royalty payments they were getting there for a while, they probably could have done it, or were within a hairs breadth of being able to do it.

And let's not even start into the whole "share our patented technology with the DDR group" slimeball tactic used by Rambus.

screw 'em, rambus is pure evil (2)

swschrad (312009) | more than 8 years ago | (#15447180)

vastly overpriced memory, based on a common manufacturer spec stolen from the consortium and patented to screw the rest of the industry.

anything that hurts rambus is OK in my book. you look up "screaming weasel" in the dictionary, you see their logo.

give those DDR guys a medal for a common spec, lower prices, and better performance. I will never own a rambus-loaded computer. it is the one thing I specifically check for.

The other piece of the puzzle... (1)

Eneff (96967) | more than 8 years ago | (#15447243)

Rambus is also claiming that these same manufacturers, who were also creating RDRAM, were artificially limiting supply as to create demand and raise prices. So these same players are simultaneously raising prices on one product they produce while lowering prices on another.

RDRAM could have been within 10-15% of SDRAM on terms of costs.

That said, I see this as a mistake on the business and PR side, not one of the technical side. At some point, Rambus has to look at itself in the mirror and figure out what it needs to keep goodwill with its eventual suppliers and customers, and what they're doing now isn't working.

This is evidenced by the negative perception of Rambus in the IT community.

Re:The other piece of the puzzle... (0)

Anonymous Coward | more than 8 years ago | (#15447383)

were artificially limiting supply as to create demand and raise prices

uh, limiting supply doesn't create demand, and it only raises prices if demand either stays the same or rises as supply falls, which it's going to do independent from changes in supply.

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