Nvidia and ATI accused of fixing prices

Posted at: 5:58pm 4th September 2008 by Ben Hardwidge

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.’