European Union Investigates Hard Drive Mergers
European Union Investigates Hard Drive Mergers
Posted 05/31/2011 at 11:36am
| by Brad Chacos
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The European Union frowns on mega-mergers and doesn't like it when a handful of companies control an entire industry. It's not afraid to spank companies that try to grab power, either; just ask Microsoft and Intel, who were each slapped with bowel-quiveringly huge antitrust fines in excess of 1 billion euros in the past. Now, Seagate and Western Digital find themselves in the regulatory spotlight as each company tries to take over competitors in the increasingly cut-throat hard drive business.
Seagate wants to absorb Samsung's hard drive division while Western Digital is hungrily eying Hitachi's storage business, Bloomberg reports. The European Commission put dampers on both moves to conduct a detailed investigation of the proposals. The inquiries would be complete by October 10th, the Commission said.
Joaquin Almunia, the European Union's competition commissioner, cited concern that the mergers would limit the number of hard drive manufacturers to just three. "The sector has already experienced significant consolidation and the proposed acquisitions will further reduce competition," Almunia says. If approved, Western Digital would hold 50 percent of the hard drive market, Seagate would control another 40 percent, and Toshiba would bring up the rear with the final 10 percent. US regulators are taking their own look at the deals.
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JohnP
May 31, 2011 at 7:01pm
Geez. Not too hard to make a spinning disk drive. Besides, by the time the Europes decide their fate, SSDs will start taking over anyways...
Why are the Europes always so far behind the curve? Look at the Galileo satellite nav system that is costing 5 billion euros and they have not even got ONE satellite up yet. Meantime, US is working on Rev 3 of our GPS nav...
jedisamurai
May 31, 2011 at 4:45pm
Then again...I never found any fault with Activision or EA before they ate up all my favorite game companies and closed them down either...
HeartBurnKid
May 31, 2011 at 4:15pm
As much as I find the idea of a monopoly or a duopoly in any market distressing, I've never found fault with WD or Seagate. I wouldn't cry too hard if they froze some of the absolute shit brands (*coughHitachicough*) out of the market.
Speaking of, if WD does buy Hitachi, I hope they just kill all their freaking product lines. With extreme prejudice. "Bob" damn, those are some of the least reliable hard drives I've ever had the displeasure of working with.
routine
June 01, 2011 at 8:09am
You cannot have a monopoly w/o government intervention. Only government can create monopolies, by making laws that say only so-and-so company can do this-or-that.
For example, the US Postal Service is a monopoly b/c the govt says only the USPS can deliver mail in your mailbox.
bling581
June 01, 2011 at 9:52am
Using the USPS as an example is bad in so many ways I can't even write them all down. Do you even know what the start up costs would be for another company to try and create the same system?
bling581
June 02, 2011 at 10:05am
FedEx is mostly for packages, and even though it's similar to USPS there are a lot of things they can't do. You have to physically go to a FedEx location to ship something or request a pickup. There's no convenient drop box outside your home where they deliver and pick up mail from. I work for a company that prints mail and there's a lot more to the postal system than what the average person understands.
jedisamurai
May 31, 2011 at 1:44pm
People are so used to hearing corporate propoganda that interfering with businesses is a bad thing they are starting to believe it. Unlike this country where corporations get away with murder to thunderous applause in Europe companies are actually PUNISHED for dangerous and harmful behavior.
routine
June 01, 2011 at 8:08am
The problem with your argument is, property rights.
When the government comes in and says, "no you can't do that with your company," the government is essentially saying, "the company does not belong to you, you have no rights to your property."
kevaskous
May 31, 2011 at 12:06pm
If a company wants to sell their business, who the fuck are they to tell them they cannot? Get lost, christ. These guys are as bad as the RIAA.
HeartBurnKid
May 31, 2011 at 4:13pm
Nobody's saying that Samsung and Hitachi can't sell. The question is whether WD or Seagate can buy. Ultimately, the answer should depend on whether the move would be good for consumers or not -- and, if the end result is a duopoly, the answer to that is "no."
If the merger doesn't happen, I'm sure Samsung and Hitachi will find other buyers.
DDRDiesel
May 31, 2011 at 12:56pm
They are not saying that the companies cannot sell their FAILING markets, nor are they saying that the businesses can't merge their divisions. Instead, they are trying to prevent certain companies from monopolizing the industry and gouging prices to a new high
I see what you are trying to say, but the EU is not stepping in every time a business does something, only if they fear that a particular industry presents a danger of a company getting too powerful
routine
June 01, 2011 at 10:30am
The point you are missing is, if they were to merge and gouge its consumers, they would only be hurting themselves.
First of all, when prices go up, demand goes down. Secondly, it would make an oppurtunity for another entreprenuer to make money.
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