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Nvidia and ATI accused of fixing prices
Email trail between the two companies appears, while the case alleges that the two companies conspired to fix, raise, maintain and stabilise GPU prices
On the surface, you may think that ATI and Nvidia are plotting the most efficient ways to obliterate each other, but a recently revealed trail of emails between the two companies appears to show a joint strategy to boost the GPU market.
The emails form a part of the exhibits in a case brought against the two companies in California last month. A PDF outlining the case, claims that ‘Nvidia and ATI conducted numerous secret meetings and communications in which they conspired to fix, raise, maintain and stabilize prices of GPUs sold in the United States. At these meetings, Defendants also colluded to coordinate the timing of new product introductions that were based on similar, competing technologies which also had the effect of fixing, raising, maintaining, and stabilising GPU prices.’
According to the document, ‘prior to entering the conspiracy [in 2004 - before ATI had been bought by AMD], Nvidia and ATI competed vigorously on innovation, speed-to-market, and price, with product introductions at varying times and price points, often leapfrogging each other in product advances.’
However, the complaint says that the companies then ‘began a pattern of introducing products simultaneously or near simultaneously at identical or near identical prices. In addition, GPU prices trended upward while the prices of GPU components and raw materials, and the prices of comparable products, most notably CPUs, continued to drop.’ The case demands a trial by jury.
It’s an accusation that’s been doing the rounds for a while, with similar antitrust allegations being made in 2006. However, Tom’s Hardware has got its hands on some of the emails that form a part of the exhibits in the case, and they appear to add some weight to it. You can see them in full here, and they reveal an apparent dialogue between key figures at both ATI and Nvidia.
Among the topics discussed is ‘The GPU Initiative,’ which appears to be a team-effort between the two companies to define the specific characteristics of GPU (ATI previously called its graphics chips VPUs). However, in one email, ATI’s Paul Ayscough also hints at the possible ‘son of “get in the game/the way it was meant to be played.”
The emails also reveal a dialogue between ATI’s then CEO Dave Orton and Nvidia’s Dan Vivoli, where Vivoli says ‘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.’ Vivoli also admits that ‘we both have increased the price of our high end product several fold over the last 4 years while Intel’s high end prices have more than halved.’
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In this day and age, when retailers are paring prices unbelievably,compared to one or two years ago, and a PC can now be bought for less than three hundred pounds - graphics cards are still skyrocketing, as they have done for the last ten years. A graphics card can cost double the cost of a PC! How can you explain that?
Comment by ssscotty at 6:57pm 15th September 2008
Yeah I think there is something going on and it's more than price. Especially when you have a card launching at $600+, then dropping to $400 two weeks later! They purposely dig into the fanboy's pocket. But then again something is only worth what you're willing to pay for it. So if you're unhappy then speak with you're wallet. Hopefully Intel can shake things up.
Comment by Warrior24_7 at 11:44pm 10th September 2008
Are we really that bothered, they brought us the graphics cards of the future, they even contribute to the survival of the human race with folding@home capability. Putting a price on that? Two of the biggest and probably the only companies in the industry, is it any wonder they are setting a monopoly? Intel, Nvidia and AMD control the only markets, so why aren't they allowed to set the prices of their products? It seems silly to me that monopolisation is allowed, yet the fixing of prices is not. Its just someone brought it up because they bought a card @ £400 and within a week it dropped to £300. *Sigh* Can we leave them to getting on with creating the 3000gb 90kMhz graphics processors, rather than hassling them with something thats still going to cost us anyway for a top of the market graphics card? Some right tight people in this world :/
Comment by Lightning_Pete at 12:44pm 9th September 2008
Come on they announce cards and price plans to the way in advance of release and then if the competion releases something better the price drops like an inchanted stone look at the gtx260 it went from £260 like its name sake to 200 almost overnight when the 4780 came out. I think the worst offender is intel there top end is so far removed from reality at 400 to what 800 pounds they need some competion even some one who will price fix with them.
Comment by Cool_CR at 11:58am 8th September 2008
Welcome to last month, this "conspiracy" is old news in the US. The courts already dismissed the case. Regardless, these companies are offering high-end non-essential luxury items. They can charge whatever the market will bear, which to this point is about $550US for the top models. Anyone who is unhappy about pricing can settle for the cheaper GT models or software-rendered 3D. Top-end graphics with hdr and directx10 support are not a right, they are a luxury. Otherwise someone should sue Ferrari for charging so much for their cars.
Comment by MikeDe at 7:46am 6th September 2008
If it's okay for OPEC to do it, why is it not okay for ATI and Nvidia?
Comment by ricka at 9:31am 5th September 2008
Where are all the ATi 'fanboys' now? I thought NVIDIA were milking us? Oh wait, you thought wrong. Both companies have been screwing people over with pricing schemes but at the end of the day who has been supplying the goods? Mr. Green that's who. I am just waiting for the next lot of NVIDIA cards to come out for everyone to jump on the band wagon and shout 'ATi have been milking us!' Honestly, what a joke.
Comment by Syzygy2005 at 4:07pm 5th September 2008
High end graphics units and motherboards are aimed at enthusiasts. As a group these are too enthusiatic for their own good and play right into the hands of companies like Nvidia, Asus and ATI. That's why individual enthusiarses complain bitterly when competitive pressures cause prices to fall just after they paid top dollar for the latest and greatest from their favourite rip-off merchant. A true enthusiarse gets burned time and time again, as he (or she?)finds it impossible to control themselves. Two months after Nvidia launched the 280 you can get one for £240, which seems pretty good value to me. And if anthusiarses stop complaining about being ripped off and delay purchasing goodies like the 4870x2 and the Rampage mbd they'd soon follow the 280 down. There's plenty of slack waiting to be taken in, especially in the good old UK. But it'll never happen of course.
Comment by Cybersciver at 1:26pm 5th September 2008
surely the similar feature set is also much down to microsoft. They have detailed what DX requires to run and so both ATi and Nvidia have release products that do that. Other than that it is difficult to overly compare the products. The prices will remain competative with each other. Then there is the third party to compare. A quick look on overclockers.co.uk shows you can get a GTX 280 for anywhere between £250 and £400. Depending on what the 3rd party happens to want to charge. OK there is some OCing in there and the £400 card has a water cooler. But its the same card from Nvidia. Given that price range it is not surprising ATi have something of similar performance for between £250 and £400.
Comment by reashlin at 2:08pm 5th September 2008
I understand your point, and I realise CPC have to be careful of what they say (as anyone does) I just feel that there is more to this story than just nvidia and ati colluded to rip us off. That they were in collusion at all is news, and some of those extracts from the emails were nothing to do with ripping people off, but about raising the profile and awreness of the graphcis card industry. Who on earth wouldn't benefit from a standardised way of refering to the GPU, surely this is a good thing, and it isn't just an opinion it is a real extract from one of the emails, it is a fact, I felt this would have been worth comment as well as the less positive stuff.
Comment by NewParadigm at 1:43pm 5th September 2008
Yes...I can see your point there too...I suppose one good thing though, is the company with the most money will usually get the best talent! The English Football Premiereship is like that... Why can't everyone just play fair, DAAMIT lol ;-)
Comment by ultrasbm at 1:37pm 5th September 2008
Well I guess it depends of your view of a corporation. If you believe that companies/people are idealistic and do what is best for the customer or if they will exploit the price fixing and raise the price far beyond what the research requires. Ultimately do I think price competition is a good thing. As i think it fosters innovation. Just look at any of the government organisation/councils, that is what happen when people know they will get their salaries independently of how efficient they are. I believe the same thing happens in organisation where they are price fixing. They dont use extra money to sharpen their organisation, rather people start to relax, efficency is no longer very important etc But you have got a point that companies need money to research etc. But if there isnt enough money, they start to do things more efficiently instead. Less people to do the same job etc etc
Comment by jonisaksson at 1:11pm 5th September 2008
I can see everyones point about the cost of graphics cards if the prices weren't fixed, but then is it worth saving a few quid at the expense of future developments? The reason I say this, is if the profits were too low, neither company would bother spending vast amounts of money on R&D with the high risk of hardly making profit. Paying that bit more for a multi-GigaFLOP card isn't as bad as it seems when you think that it'll ensure future products will be a lot faster. R&D is *NOT* cheap, and it has to be funded somehow. I'm all for price fixing as it stabilizes the market. It if weren't fixed, then the biggest fish wins, and they'd have no competition therefore we'd see no where near the price/performance we have now. Just my $0.02 guys :)
Comment by ultrasbm at 12:55pm 5th September 2008
I agree with harrymanback, it will be incredibly hard to prove. For example just drive around the local petrol stations and be amazed how closely they are priced. Different oil sources, different refineries etc, still they end with just pennies in difference... yeah right. Whether that is price fixing or just adjusting the price to exactly match your competitor is of course debatable, whihc is why they get away with it. But still growing up in Norway, who has the 3rd largest oil reserves in the world, still Norsk Hydro (pumping their oil a few miles out to the sea, refineries in Norway so very different costs) still had the same price for their petrol as for example Q8. Thats price fixing on a massive scale
Comment by jonisaksson at 12:21pm 5th September 2008
I imagine it will be near impossible to actually prove these claims, unless one of the emails provides a smoking gun (the ones quoted certainly don't). Proving a pricing cartel for a product whose production costs have so little relation to its retail price is going to be real tricky. When mid range chips are just deliberately crippled top end chips its clear the price charged is pretty arbitrary. Then again, you only have to look at our energy market to see that companies don't need to explicitly agree a strategy to form a cartel. The gas and electricity companies just have to sit back, all raise their prices together, and a guaranteed billion pound profit drops in their laps every 6months. Free market capitalism my arse.
Comment by harrymanback at 12:12pm 5th September 2008
With both ATi and Nvidia fanboys shouting the odds on the current releases which let's be honest are so closely matched now in price and performance. You could say their planning has actually done what they conspired to do.
Comment by crazyceo at 10:00am 5th September 2008
i think thats exactly it l3v1ck, the 8800 HAS been around for 2 years. its way too long and the new gen arent that much faster than it. then again, by history, the performance leap per year is still running as expected.
Comment by thegreat0mi at 2:24am 5th September 2008
This was a court case brough about last month so CPC has hardly jumped onboard with a conspiracy theory! As for their own personal points of view, I'm sure being a well respected publication with sensitive bridges to be kept with both Nvidia and ATi they have to be ever-so-careful with what they say ... :P ... us on the other hand ... we can shout and swear (****) about it 'til the cows come home!
Comment by CSQuake at 9:41pm 4th September 2008
That CPC has jumped on the 'OMG conspiracy' bandwagon... there is a lot more that could have been made of this story, positive and negative. For instance I whole heartedly agree with a lot that was said in those emails... especially "team-effort between the two companies to define the specific characteristics of GPU" ... "we have the common goal of making our category a well positioned, respected playing field"... Also if we stop and think about it, having equivalent products on the market at the same time, shouldn't be bad for pricing, if one or the other company has a stronger product that is the defacto choice then they can charge more for that product. What this does harm though is breakthroughs in performance increases. I'd like to see a bit more from CPC in the way of their own views on the news they p[resent... we can get the news from anywhere, but I respect their knowledge and insight in to the industry, neither of which I have.
Comment by NewParadigm at 9:31pm 4th September 2008
Something always seemed odd about them, Because you see AMD and Nvidia slating intel, But you never see them slating each other... Now I see why...
Comment by NikoBellic at 7:52pm 4th September 2008
I got my 8800gtx way way way back it trounced the x1900xt that i already had and did not have any ATI compation till the 3870x2 well that was at least 2 years later even now (my ultra flashed 8800) will keep pace with a 4850 so im happy
Comment by Cool_CR at 7:09pm 4th September 2008
that the release in comparable products started back when nVidia's 6 series came out... and the prices for a high end nVidia or ATI card were very high at that point. Trouble is, some collaboration could be beneficial... I applaud efforts to work together on the marketting front and raise the profile of GPU's and the part they play in pc gaming, hopefully with the aim that pc gaming becomes better understood and more accessible. However there is a fine line between working towards common goals for the good of the customers, and working towards common goals to the detriment of the customer. I'd hate to see any kind of partnership killed dead because of this, and I hope they can focus the debate/case on those issues which are purely anti-competitive.
Comment by NewParadigm at 6:58pm 4th September 2008
I think this two horse race is crap, new blood is needed quick, hope intel gets into graphics big time real soon, and hopefully a few others.
Comment by blazinglory at 6:49pm 4th September 2008
Only in the US? Drat - I guess that means no rebate for my £300 X1950XTX bought in 2006!
Comment by Xonerater at 6:39pm 4th September 2008
Strange. I thought you could get a lot of power for your money with the likes of the 8800GT etc. A few years ago a high end card cost over £400. Until recently you could get a high end card for about £200. If this is true I wonder how much cheaper cards would have been.
Comment by l3v1ck at 6:12pm 4th September 2008
Sorry, Custom PC comments are now closed.
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