Optical disk drive antitrust price fixing litigation

Optical disk drive antitrust price fixing litigation

Debra J. Aron
Antitrust & Competition | United States Antitrust

Dr. Debra Aron advised Crowell & Moring and Beck Redden, counsel to HP Inc., and testified at trial on damages in price fixing antitrust litigation. HP alleged that defendants, Quanta Storage Inc. and Quanta Storage America Inc., conspired with other manufacturers to fix prices for optical disk drives used in HP laptop and desktop computers. Optical disk drives are computer components that apply laser beams to read and write data on CDs, DVDs, and Blu-Ray disks. HP alleged that Quanta participated in agreements to rig bids in competitive procurement auctions and procurement negotiations conducted by HP.

Dr. Aron conducted economic and econometric analysis to estimate the prices for optical disk drives that would have been paid by HP in the absence of the alleged collusive behavior during each quarter of the alleged damages period, and thereby calculated the estimated overcharges incurred by HP as a result of the alleged anticompetitive acts. Dr. Aron determined that HP was overcharged by $176 million over the course of the alleged conspiracy.

The jury concluded that Quanta had participated in a conspiracy to fix the prices of optical disk drives sold to HP and awarded HP compensatory damages of $176 million, which the Court trebled for a total award after adjustments for settlement payments of $438.65 million.

The trial was held in October 2019 in US District Court for the Southern District of Texas, Houston Division. The verdict and award were upheld on June 5, 2020 in the Fifth Circuit Court of Appeals.