The class-action lawsuit targets DVD drives built by Sony, Panasonic, Hitachi-LG and NEC between April 1 2003 and December 31 2008. The companies are accused of colluding with each other to fix prices and maximise profits.
As CNET reports, the affected optical disc drives were sold to computer brands including Dell and HP. When the PC builders opened a contract to supply a new batch of drives, the group of DVD drive manufacturers shared their bids with each other. Prices were forced higher than usual, causing the PC companies and hence consumers to pay more.
The U.S. Department of Justice began investigating the activity over five years ago. An executive from Hitachi-LG served six months in prison in 2012 for his role in the conspiracy. Other executives from across the offending companies have also faced criminal investigations.
The lawsuit was partly settled this week. Sony, Panasonic, Hitachi-LG and NEC have agreed to pay a combined total of $124.5 million to end their involvement in the case. You can now file a claim to receive $10 for each DVD drive owned during the impacted period. No proof of purchase is necessary and you have until July to apply.
Although that’s only a few months away, it will be some time longer before the money actually arrives. No payments will be made until the other defendants in the suit have also settled their involvement. The lawyers fighting the case have argued that funds should not be released until the proceedings are completed.
Questions remain over how many consumers will actually gain compensation. Around a quarter of the sum paid by the four companies will be directed straight to the lawyers. That leaves enough money to pay $10 each to 9.3 million people but this is still far from the total potential number of claimants. Over 57 million PCs were shipped in the U.S. in 2003 alone. Across the five year span, over 250 million devices could have been sold.
Optical drives are now fairly obscure, rarely making an appearance in new laptops or consumer-focused PCs. During the timeframe considered by the suit, they were an important part of new devices though. Downloading software from the Internet was in its infancy and most new releases were distributed on DVDs. Without owning an optical drive, it was difficult to get additional content onto your PC.
This is what makes the lawsuit so significant. Millions of people will have been affected, however indirectly, by the industry price-fixing. The scheme drove up profits at the companies involved while making customers pay more for no additional functionality. Defendants yet to settle in the case include major DVD drive manufacturers Samsung, Philips and Pioneer. In total, seventeen more companies allegedly participated in the illegal activity.
