http://dailytech.com/NVIDIA+Facing+51+Pending+Lawsuits/article7445.htm

Quote :

"NVIDIA under fire for anti-competitive and price fixing business practices Analysts expect a stormy summer as NVIDIA faces not one, but fifty-one pending lawsuits. The 51 civil complaints filed against NVIDIA claim that the company participated in anti-competitive business agreements and price fixing strategies. Some of these civil suits allege that NVIDIA entered into these agreements with graphics rival AMD. In March 2007, 42 civil suits were filed against NVIDIA for anti-competitive business practices; 14 of those suits alleged that the company colluded with AMD to fix prices. According to NVIDIA, most of the suits were filed in the Northern District of California. NVIDIA states that while there appear to be many civil suits, all of the suits are putative class-actions, indicating that they are from direct or indirect purchasers of NVIDIA graphics products. Price fixing occurs when a company enters an agreement with its competitor to set a minimum selling price for a particular product or family of products. In this case, many of the suits allege that AMD (then ATI) and NVIDIA artificially inflated the value of high-end and enthusiast components. Currently there is roughly an even-split in market share between AMD and NVIDIA, with NVIDIA holding 28.5% of the graphics market and AMD picking up another 23%. AMD saw the biggest loss last year with the introduction of NVIDIA's G80-family GPUs -- the company's high-end GPU. Late last year AMD and NVIDIA received subpoenas from the U.S. Department of Justice alleging that both companies violated antitrust laws. The suit was sparked after AMD's acquisition of ATI was approved, which lead to the belief that NVIDIA had somehow cooperated with AMD in regards to the acquisition. The fact that AMD and NVIDIA are long time partners also sparked debate, but the U.S. Department of Justice did not reveal any specific allegations against AMD, ATI or NVIDIA. Along with the U.S. Department of Justice, Intel also issued subpoenas against AMD and ATI, requesting that all documents related to the AMD-ATI merger be reviewed. Intel, also under anti-trust litigation with AMD, was unsuccessful in lobbying for further sanctions. AMD successfully absorbed ATI last year. AMD senior executives indicated last year that even with ATI under its wing, it will still be cooperating, while simultaneously competing, with NVIDIA for the foreseeable future. "

5/31/2007 5:51:05 PM

yes... we all can visit websites too...

6/1/2007 6:59:12 PM

^that was uncalled for...now please go wreck your bike again an post some more stupid stories about it on your blog mkay

6/2/2007 7:16:04 AM

no shit, like no one links to sites on TWW.

6/2/2007 11:32:19 AM

Quote :

"now please go wreck your bike again an post some more stupid stories about it on your blog mkay"

And that was called for?

6/2/2007 11:59:02 AM

^Seems a general rule that being a dick makes it open season on said dick?

6/2/2007 12:09:15 PM

Leave NVidia alone, you big bully!

6/2/2007 1:58:13 PM

lol, saying that we can visit the web is uncalled for? ppl on tww getting a lot more touchy then usual it seems.

6/3/2007 11:26:01 PM

so who's going to be the first to actually post about the article?

6/3/2007 11:27:57 PM

what article? thought this was just rambling talk?

6/3/2007 11:29:40 PM

I did post about the article. I'll do it again:
"anti-competitive business practices" and "colluded with AMD to fix prices"

If they (AMD & NVidia) colluded to fix prices too low, then how is that any different from agressive competition? They don't need to collude to drive each other into bankruptcy.

Similarly, if they colluded to fix prices too high, then how is that anti-competitive? Sounds to me like that is just what their competitors want them to do, since it will allow smaller competitors such as Intel to dramatically increase their market share (since their products are now priced lower).

This and all other cases like it are merely distraction tactics companies throw against each other in an effort to drain treasury (it costs more to defend yourself than it does to launch an attack). The only beneficiaries are lawyers and the politicians they pay to keep such laws on the books.

[Edited on June 4, 2007 at 7:59 AM. Reason : .,.]

6/4/2007 7:57:10 AM

Quote :

"Similarly, if they colluded to fix prices too high, then how is that anti-competitive? Sounds to me like that is just what their competitors want them to do, since it will allow smaller competitors such as Intel to dramatically increase their market share (since their products are now priced lower)."

Sweet, and for the 3-5 years it would take capitalism to get it all sorted out, both companies have fleeced the consumers beyond their wildest imaginations and made some executives super rich.

And, we only hope that intel doesn't join into the "wink wink" gentleman's agreement at setting the prices artificially high. How many memory makers was it that entered into a price fixing cartel? And the cool thing was, after we got screwed on high memory prices, companies like Dell and HP were the ones that received the fines payed, not the end consumer.

6/4/2007 8:33:24 AM

I think it's just a bogus claim really. For the latest and greatest tech gadgets, of course they are going to price gouge the consumer. Bleeding-edge technology has a high-limited value when first introduced and once it's been out in the market place for a while, it looses steam, becomes more mainstream, and then the produce declines in product life. Look up "product life-cycle" to understand more. Look at razor cell phones, they were the hotness 2 years ago and sold for 600 when first introduced, now they give them away for free with a contract.

This is especially true for the high-end market or the "niche" market. Because of their high price and high value, your looking at 1% or less of the total market. Nvidia and ATI (err AMD) knows that they can set a high margin on cards because gamers or enthusiasts will be willing to buy them compared to normal user and thats what they try to bank on. Considering what their overhead costs are, I wouldn't blame them for setting up high-end cards to be inflated for what they are. They make little or no money in the low end of their line-up and unless they can sell on large volumes like intel does, they don't really see a large return.

Remember, they have loads of R&D since they introduce a new gpu core every 18 months and pretty much introduce new lines of products every 6 months at the height of the gpu wars.

Is it ridiculous of a price?
Yes, considering when 10 years ago, the most expensive video card was about 150ish; 5 years ago was no higher than 300ish.

As a consumer, I wouldn't may no more than 300 for a graphics card and most consumers who are semi-gamers like myself, agree around this point. It's the sweet spot so that's why you see a lot more mid-ranged cards in the 200-300 range. Their margins and volume gives enough returns for the company. But since there are people buying the massive $600+ cards, they will still have $600+ cards available. Just supply and demand.

[Edited on June 4, 2007 at 5:38 PM. Reason : ]

6/4/2007 5:36:51 PM

Quote :

"And, we only hope that intel doesn't join into the "wink wink" gentleman's agreement at setting the prices artificially high. How many memory makers was it that entered into a price fixing cartel? And the cool thing was, after we got screwed on high memory prices, companies like Dell and HP were the ones that received the fines payed, not the end consumer."

As far as industries go, the semiconductor industry would be one of those that is most prone to abuse by cartels. It is because you have to be good at semiconductor manufacture to produce a lot (get a good yield), and it can take years to get good at it.

But cartels are more often broken by members, not new-comers. By virtue of the process, each additional chip you make out of your existing plant is pure profit; that is a lot of incentive to produce more if you can.

All the state needs to prove is that you are not producing as much as they believe you should be, and bam, antitrust conviction. If you suffer production problems and prices rise enough to piss off your customers, then you are screwed, plead guilty and beg for mercy.

6/4/2007 6:10:15 PM

Doesn't AMD own (at least a part of) ATI now?

6/4/2007 7:13:17 PM

Quote :

"The suit was sparked after AMD's acquisition of ATI was approved"

that should have answered your question in the article.

I totally agree with you LoneSnark. AMD had the same issue with their X2 duo cores when they first came out because they had production problems. They had a higher then usual failure rates on those chips because of the fact that there were two cpu cores's that were designed to be together. In modern manufacturing processes, each core is different because of minute differences in the transistors (think atomic scale that could alter the voltage capabilities). And both cores must be running in sync to work properly so they had a lot of variance. One core could be clocked high while the other one is the weakling, then the whole chip would have to be set to the lowest one.

The one advantage was to create a better, more process efficient chip even though their failure rates were reaching 20%+ in a batch (10% or less is relatively ok). Even if one core is perfect and the other one failed, they couldn't take the good one out, unlike the Pentium D's (which are two separate cores that were combined on one chip). Because of intel's simple design, they could pair up the correct core speeds and keep their failure rates low. One main advantage of why Pentium D's were so cheap and kicked X2's in the market even though the intel chip wasn't technology superior.

6/4/2007 11:30:19 PM

JBaz, ummm, wtf? You are applying what you know about chip manufacturing incorrectly.

Quote :

"I think it's just a bogus claim really. For the latest and greatest tech gadgets, of course they are going to price gouge the consumer."

This isn't price gouging. When the bleeding edge is hits, the supply is low and there still is a demand for the latest and greatest from an exceedingly small segment. As the yields improve, they make more chips and can sell them at a lower price.

Something you are missing entirely, is this isn't just about the top of the line, elite, cards that cost $retardo when they come to market. ATI/Nvidia could lock into a price fixing agreement across their entire line of cards from the cheapest to the most expensive. If they make an extra 5% on every card they produce over what the market says the price really should be, they have great bottoms lines, and it's hard to detect the fixing.

6/5/2007 10:28:01 AM

by price gouging, i mean about it being more of a fad because it is such a new technology. While supply and demand has a big play on it, using marketing to give it more exclusivity really sells it at a higher price. Just a perception of value (or in terms, demand).

6/5/2007 4:32:35 PM