2019-11-18

Quanta Storage Ordered to Pay US$ 176 Million for Price-Fixing

Quanta Storage Inc. (廣明光電股份有限公司), a Taiwanese CD-ROM manufacturer, and its U.S. affiliate, Quanta Storage America, Inc. (collectively “Quanta Storage”), were sued together with six other defendants by Hewlett-Packard Company (“HP”) in 2013. HP alleged that Quanta Storage and the other defendants conspired to fix and raise the prices for optical disk drives (“ODD”), resulting in substantial losses suffered by HP. On October 23, 2019, the jury at the US District Court for the Southern District of Texas eventually reached a verdict in favor of HP, and ordered Quanta Storage and the other defendants to pay a total of US$ 176 million, or NT$ 5.384 billion to HP.

According to HP's claims, Quanta Storage and the other defendants participated in a massive conspiracy to fix and maintain artificially inflated prices for OOD during procurement events conducted by HP between 2004 and 2010. As such, HP alleged that it paid higher prices for ODDs than it would have paid in a competitive market, and therefore suffered a losses of nearly US$ 176 Million. After a week-long trial in a Houston federal court and less than five hours of deliberation, the jury reached a unanimous verdict finding that Quanta Storage and the other defendants knowingly and intentionally violated U.S. antitrust laws and thus must pay HP the amount of US$ 176 million. Additionally, pursuant to U.S. federal laws, the verdict amount could be tripled by the U.S. District Judge.

Quanta Storage argued that both the Taiwan Fair Trade Commission and the U.S. Department of Justice had already found that Quanta Storage did not breach any rules or hamper market competition and, therefore, no penalties were imposed on it. In addition, Quanta Storage is merely an original equipment manufacturer and does not sell products directly to HP, in contrast with the other defendants. Quanta Storage indicated that it regretted the jury’s misunderstanding and will appeal the ruling.
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