Nvidia, ATI Get Bad News In Price-Fixing Lawsuit

[Andy Chalk]

Nvidia, ATI Get Bad News In Price-Fixing Lawsuit

An email suggesting collusion between ATI [http://www.nvidia.com] to keep the price of GPUs artificially high was read in court today as part of a class action lawsuit against the companies.

The suit combines 51 separate civil antitrust suits against Nvidia and ATI, now owned by AMD [http://www.amd.com], alleging price fixing in the GPU market as the result of a conspiracy between the two companies. According to the allegations, the two companies held secret meetings to determine prices, synchronize their product launches and "stage competition" to camouflage their cooperation. The collusion has been going on for several years, according to the charges.

U.S. District Court Judge William Alsup told lawyers representing the plaintiffs, "This is not a bad document for you. It is not a home run but it is a base hit." Alsup had previously criticized defense lawyers at the opening of the trial for attempting to keep "trade secrets" under seal and out of the trial, saying, "This court is not a wholly-owned subsidiary of your companies. I am against you hiding information from the public. If we get to summary judgment in this case, nothing will be under seal."

The email, written in 2002, was sent by Nvidia Senior Vice President of Marketing Dan Vivoli to ATI CEO Dave Orton. In it, Vivoli wrote, "I really think we should work harder together on the marketing front. As you and I have talked about, even though we are competitors, we have the common goal of making our category a well positioned, respected playing field. $5 and $8 stocks are a result of no respect."

"That's not good for the defense," Alsup said after reading the document. "A jury would like to see this." A detailed breakdown of the suit against Nvidia and ATI, including graphs showing their pricing and release schedules before, during and after the conspiracy period, is available here [http://madmikemagee.files.wordpress.com/2008/07/nvid.pdf]. (PDF format)

Sources: Law.com [http://www.techpowerup.com/index.php?65970]


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[Skrapt]

If they're found guilty this would be very interesting for the graphics card market. Not sure whether it would be good in the short term, as depending on how much they're fined this could put a huge dent in AMD's capacity to produce graphics cards, and competition, whether it is staged or not is ultimately better for the consumer then one company holding a monopoly.

 

[PedroSteckecilo]

So technically the reason PC gaming is so expensive is because of them?

 

[BallPtPenTheif]

So technically the reason PC gaming is so expensive is because of them?

it would seem like it.

i'm sure many of us would have upgraded by now instead of buying a console if these twits weren't out dicking around.

 

[faselei]

Erm, of course i haven't seen the other evidence but if...

"I really think we should work harder together on the marketing front. As you and I have talked about, even though we are competitors, we have the common goal of making our category a well positioned, respected playing field. $5 and $8 stocks are a result of no respect."

...is the worst anyone can dig up then hah! All this shows if they both have a stake in making PC GPU's serious business. They can work together to increase the market size without colluding on price.

 

[stompy]

On the one hand, it'll reduce the prices of graphics card, usually the most expensive component in a PC. On the other, this lawsuit could really hit ATi hard, causing a possible monopoly... which one is the greater evil?

 

[smallharmlesskitten]

Monopolies

But then governments normally split them up to maintain fair and healthy competition

 

[ElArabDeMagnifico]

So technically the reason PC gaming is so expensive is because of them?

it would seem like it.

i'm sure many of us would have upgraded by now instead of buying a console if these twits weren't out dicking around.

Same could be said to the console side if you think about it, everyone's trying hard to keep their price at the "minimum maximum" - then there's the "multiple SKU" business.

 

[Fandan]

This lawsuit is ridiculous and should be thrown out. Nvidia and AMD should counter-suit each of the complainants for base stupidity. Boo hoo, their products cost too much. High-end GPUs are a luxury item. If you can't afford them, tough. You don't see people suing fashion designers for making handbags so expensive. It's not like Nvidia or AMD sell a necessary commodity that everyone has a right to. Hey, I can't afford an F430 because Ferrari prices them too high. Maybe I'll sue them so they'll lower their prices. This kind of frivolous lawsuit keeps companies from spending more on R&D to give us a better product.

 

[ReepNeep]

Commodities are priced based on what the market will bear. An item is 'worth' what people are willing to pay for it and people are apparently willing to pay 600$. Some real nutcases will drop 1200 for two of them or even 1800 for three.

These claims are pretty dubious, as these things are basically toys: totally discretionary entertainment items. If this were something essential to the functioning of society like Oil or wheat, I could see it. This just smacks of whining.

Although, it is rather strange that the prices nearly doubled around the time the Geforce 6 and Radeon 10 series came out. We go from the approx 350$ 9800 XT to the approx 600$ X800 PE.

Bah, what do I know. I just hope they don't get hit hard enough that Intel forces them both out of the market.

 

[MosDes]

Bah, what do I know. I just hope they don't get hit hard enough that Intel forces them both out of the market.

The only cool feature intel video chipsets have is the "ctrl + alt + up/down" trick... I would hope they don't ever come out on top...

I do find it kinda odd that everything was so "synchronized"...

Boo hoo, their products cost too much. High-end GPUs are a luxury item. If you can't afford them, tough. You don't see people suing fashion designers for making handbags so expensive. It's not like Nvidia or AMD sell a necessary commodity that everyone has a right to. Hey, I can't afford an F430 because Ferrari prices them too high.

I don't quite understand how you equate GPUs to handbags. I see many more jobs in graphic design, video game production, etc., than with any job using handbags... As for vehicles, I buy what works and is inexpensive, which seems synonymous to GPUs, I have a card that is better than a junker but is well in my price range and works quite well. Who says I need anything high-end?

On the one hand, it'll reduce the prices of graphics card, usually the most expensive component in a PC. On the other, this lawsuit could really hit ATi hard, causing a possible monopoly... which one is the greater evil?

Why would it hit ATi so hard? Did they do more to cause problems or did nVidia just let it happen? I feel they are both to blame, but understand inflation will make us all poverty stricken, not the price of video cards...

 

[Fandan]

Boo hoo, their products cost too much. High-end GPUs are a luxury item. If you can't afford them, tough. You don't see people suing fashion designers for making handbags so expensive. It's not like Nvidia or AMD sell a necessary commodity that everyone has a right to. Hey, I can't afford an F430 because Ferrari prices them too high.

I don't quite understand how you equate GPUs to handbags. I see many more jobs in graphic design, video game production, etc., than with any job using handbags... As for vehicles, I buy what works and is inexpensive, which seems synonymous to GPUs, I have a card that is better than a junker but is well in my price range and works quite well. Who says I need anything high-end?

That's exactly my point. High-end GPUs are no more a necessity than expensive handbags or Italian sports cars. Price parity does not need to exist for such luxury items. If a company requires a high-end item, whether it be a graphic design house or video game production team, or a racing team, or a fashion design house, then they will have to pay for it.

Suing companies for price-fixing of luxury items is ludicrous. Surprisingly no one has sued Starbucks for $4 cups of coffee. I guess they decided to opt for $1 cups at Dunkin Donuts instead of suing and accusing them of collusion.

 

[Skrapt]

So technically the reason PC gaming is so expensive is because of them?

Nope, if you look at the information the alleged price fixing happened nowhere near the current generation of graphics cards.

Why would it hit ATi so hard? Did they do more to cause problems or did nVidia just let it happen? I feel they are both to blame, but understand inflation will make us all poverty stricken, not the price of video cards...

It would hit them hard because AMD, the company who owns them is making billion dollar losses per quarter and they're already putting a stop to some of ATI's other activities a huge fine would probably just mean they could not compete effectively.

edit:

Actually AMD has made a $1.2 billion loss this quarter, and they're abandoning the hand held graphics and digital TV markets.

 

[ReepNeep]

Bah, what do I know. I just hope they don't get hit hard enough that Intel forces them both out of the market.

The only cool feature intel video chipsets have is the "ctrl + alt + up/down" trick... I would hope they don't ever come out on top...

If Nvidia and AMD/ATI get smacked around hard enough, Intel may just steal the discrete graphics market from both of them. I read a few years ago that Intel's R&D budget was approximately equal to AMD's entire revenue. If they get serious about a market they can and will throw money at it till they force everyone else out of meaningful competition. They're just way too big for anyone but Microsoft to stand up to.

If you're curious, look up Larrabee http://en.wikipedia.org/wiki/Larrabee_(GPU)

Intel can just leverage their deep pockets and unrivaled manufacturing expertise to make a place for themselves in the market. The only question is how serious they are about this.

 

[The_root_of_all_evil]

Personally, having an ATI card, I'd like to see these gits hang for the hundreds of downloads I've had to make, the third party drivers being BETTER than the originals (and less intrusive) and the fact they still can't make GRAW2 etc. work.

 

[Skrapt]

Bah, what do I know. I just hope they don't get hit hard enough that Intel forces them both out of the market.

The only cool feature intel video chipsets have is the "ctrl + alt + up/down" trick... I would hope they don't ever come out on top...

If Nvidia and AMD/ATI get smacked around hard enough, Intel may just steal the discrete graphics market from both of them. I read a few years ago that Intel's R&D budget was approximately equal to AMD's entire revenue. If they get serious about a market they can and will throw money at it till they force everyone else out of meaningful competition. They're just way too big for anyone but Microsoft to stand up to.

If you're curious, look up Larrabee http://en.wikipedia.org/wiki/Larrabee_(GPU)

Intel can just leverage their deep pockets and unrivaled manufacturing expertise to make a place for themselves in the market. The only question is how serious they are about this.

My personal opinion is that Larrabee will not be a success, at least in it's first iterations, though after refinement it could make a spot for itself. However I think that simply, Intel don't have the experience to be able to release an instant success into the discrete graphics card market. Since building a CPU and a GPU are two very different things. I would welcome more competition in the graphics card market, and although I don't believe Intel's Larrabe will be an instant success they do have the resources to make it one.

 

[ReepNeep]

Personally, having an ATI card, I'd like to see these gits hang for the hundreds of downloads I've had to make, the third party drivers being BETTER than the originals (and less intrusive) and the fact they still can't make GRAW2 etc. work.

I've had three different ATI cards over the years (Radeon 7200, Radeon 9500 Pro, Radeon X1950 Pro) and have been satisfied with all but the first one.

The drivers have worked fine since the R8500 days and ATI's Vista drivers actually worked from day one, unlike some others I could name. The only driver related reason to avoid ATI is if you're running Linux as they basically don't support it at all.

Hell, I can count the number of serious problems I've had with bugs on one hand and none of them were game breaking. Most were fixed within one driver release anyway.

My personal opinion is that Larrabee will not be a success, at least in it's first iterations, though after refinement it could make a spot for itself. However I think that simply, Intel don't have the experience to be able to release an instant success into the discrete graphics card market. Since building a CPU and a GPU are two very different things. I would welcome more competition in the graphics card market, and although I don't believe Intel's Larrabe will be an instant success they do have the resources to make it one.

CPUs and GPUs are are more similar than you think. A GPU is essentially nothing more than sixteen or so simple CPUs on the same chip that run specialized code. That said, I generally agree with you. I think Larrabee will do poorly on the market in it's first iteration and slowly better with subsequent ones. Think Microsoft and their XBox here. Getting people to write code with them in mind shouldn't be too difficult as I expect that Intel will start putting 8 core Larrabee derivitives on their motherboards. Developers won't be able to ignore them then, no matter how badly the discrete version may flop.

 

[The_root_of_all_evil]

I've had three different ATI cards over the years (Radeon 7200, Radeon 9500 Pro, Radeon X1950 Pro) and have been satisfied with all but the first one.

I've got a Radeon 9600. Even with the latest drivers, any graphically intensive game can't do translucencies and knocks my core temperature to 30 degrees/chip temperature to 65. Playing GTA VC crashes the ATI driver after ten minutes.

 

[ReepNeep]

I've had three different ATI cards over the years (Radeon 7200, Radeon 9500 Pro, Radeon X1950 Pro) and have been satisfied with all but the first one.

I've got a Radeon 9600. Even with the latest drivers, any graphically intensive game can't do translucencies and knocks my core temperature to 30 degrees/chip temperature to 65. Playing GTA VC crashes the ATI driver after ten minutes.

65 degrees is actually pretty normal for a video card at full load. They run much hotter than CPUs do. How long have you had the thing? Has it always done weird stuff like that? Other programs having trouble running for extended periods?

 

[Nugoo]

I've had three different ATI cards over the years (Radeon 7200, Radeon 9500 Pro, Radeon X1950 Pro) and have been satisfied with all but the first one.

I've got a Radeon 9600. Even with the latest drivers, any graphically intensive game can't do translucencies and knocks my core temperature to 30 degrees/chip temperature to 65. Playing GTA VC crashes the ATI driver after ten minutes.

65? That's fantastic. My 8800 idles at 70 and peaks above 90. Still runs like a dream, though.