There’s been plenty of media attention paid this week to a big class-action lawsuit that could see Canadians get a few bucks back in repayment for a 15-year-old ripoff.
And while that’s all well and good, what’s it really worth?
To backtrack, Canadian consumers are entitled to a slice of an $80-million class-action award accusing several electronics manufacturers of price-fixing. Samsung, Hitachi, Toshiba, and others allegedly fixed the prices of electronic devices containing DRAM, or dynamic random access memory.
As a result, any adult who purchased a DRAM device — such as a laptop, desktop, printer, mp3 player, video camera or game console — between April 1, 1999 and June 30, 2002 can apply for some compensation. Popular items back then included iMacs, iPods, and video game consoles such as the PlayStation 2 and Xbox.
Since only the most type-A personalities (or hoarders) may still have receipts for purchases made about 15 years ago, you can even apply for cash back without any proof.
Anyone filing on the honour system can get a big $20, the minimum amount for anyone who files. And if you have your receipt, you could get more, according to the website themoneyismine.ca, which was set up to handle the claims. To date, over 500,000 Canadians have filed claims, according to one lawyer involved in the suit.
But will you really get more even with those receipts? Probably not. A columnist with the St. John’s Telegram claimed $5,000 in eligible purchases and it promised him a refund of ... $20.
Meanwhile, would you care to guess how bad this hurts the defendants? According to court documents, those companies accounted for more than 75 per cent of worldwide DRAM sales during that 1999-2002 stretch, with sales in excess of US$80 billion. Granted, Canada’s not a huge market, but that means the $80 million going to Canadian consumers (actually closer to $57 million after legal fees and other costs) represents around 0.1 per cent of their global sales. And that’s not even accounting for the cringeworthy exchange rate at the time.
Oh sure, the defendants were hit in other countries too. The DRAM ripoff ball started rolling with a U.S. Department of Justice probe that led to a US$310 million class-action award south of the border. Collectively, the defendants have paid US$731 million in fines. A veritable drop in the DRAM bucket.
In one refreshing change, Canadians can actually come out ahead of our American counterparts; they’re only entitled to a minimum US$10 claim.
So while law firms and the media trumpet this as a big win for consumers, let’s keep things in perspective. It’s not really a free $20; if you’re filing honestly, it’s because you got ripped off and you’re likely not being fully compensated.
It’s better than nothing, but only a bit better.