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Thursday, March 28, 2024 | Back issues
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Latest Disc Drive Settlement Tops $124M

SAN FRANCISCO (CN) — Sony and other electronics manufacturers will pay nearly $125 million to settle claims by indirect buyers of optical disc drives that they conspired to fix the price of the devices.

U.S. District Judge Richard Seeborg preliminarily approved a class action settlement with Sony, Panasonic, NEC Corporation and Hitachi-LG sought by indirect buyers, and preliminarily certified the settlement classes at a hearing on Thursday.

"I'm comfortable with the [proposed] order," Seeborg said. "I know how hard-fought this litigation has been."

A long list of plaintiffs including Hewlett-Packard sued disc drive suppliers in 2010 claiming a bid-rigging and price-fixing scheme that allowed the defendants to control 90 percent of the optical disc drive market and rake in more than $45 billion in revenue between 2004 and 2008, according to HP.

The year before, the Justice Department revealed that it was investigating possible antitrust violations in the optical disc drive industry. Hitachi-LG Data Storage pleaded guilty to criminal antitrust violations discovered in the probe and paid a $21.1 million criminal fine, and some of its employees went to prison.

The $124.5 million settlement with the four defendants represents a 31 percent recovery of damages to plaintiffs by market share, according to the plaintiffs' preliminary settlement motion.

"We feel it's a very solid number in terms of percentage recovery," class counsel Jeff Friedman told the court on Thursday.

Hitachi-LG will pay $73 million into the settlement fund. Sony's share is $28.5 million, Panasonic will pay $16.5 million and NEC will fork over $6.5 million, according to the motion.

For indirect buyers in the 24 jurisdictions certified by the court in February, the settlement amount represents 15 percent — $840 million — of total damages, the plaintiffs said. The plaintiffs' damages expert had estimated that indirect buyer damages totaled $1.67 billion nationwide between April 2003 and December 2008.

Class counsel will ask for up to 25 percent of the settlement fund in attorney's fees, according to the motion. The plaintiffs will request $4,500 for each class representative.

Six defendants and their subsidiaries remain in the indirect buyer case, including Toshiba and Philips — the two defendants with the largest market share, according to the motion. The plaintiffs said they anticipate recovering additional settlements or an award after trial.

The settlement class includes individuals in 23 states and the District of Columbia that bought computers and standalone optical disc drives between 2003 and 2008. Panasonic-branded computers were excluded from the class, though its standalone disc drives were included.

U.S. Magistrate Judge Jacqueline Corley oversaw the settlement discussions. Chief Magistrate Judge Joseph Spero oversaw discovery disputes.

In April, Seeborg awarded direct buyers $37 million following six years of litigation.

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