A
fter recently sending a handful of
DRAM executives to the pokey for
price-fixing, the Department of Justice is
now focusing its attention on graphics
giant Nvidia and its primary competitor, ATI
(now owned by AMD).
“The Antitrust Division is investigating
the possibility of anticompetitive practices
involving the graphics processing units and
cards industry,” a spokesperson for the
DOJ said. Beyond that, the DOJ is keeping
mum on the exact nature of its investiga-
tion, but many experts believe it has to do
with price-fixing. While vendors may set
similar prices independent of each other,
getting in a room or making a phone call to
fix a price is illegal.
Officials with Nvidia and AMD con-
firmed receipt of federal subpoenas
seeking records, but would not elaborate
further. Both companies’ reps claim not to
know what the feds are looking for.
Mike Hara, a spokesperson for Nvidia,
said the DOJ has requested records from
as far back as the 1990s, including mar-
ket studies, volume price agreements,
and other documents. “It’s a pretty wide-
sweeping set of documents,” Hara said.
He added that despite the scrutiny, the
company takes a positive view of corpo-
rate regulations and believes they’re gen-
erally good for the industry.
Although the records request dates back
to the days of the Nvidia Riva 128 and ATI
Rage 3D, the investigation is likely focused
on modern discrete GPUs as opposed to
integrated graphics, as the DOJ has not
targeted Intel, the largest manufacturer in
the integrated sector.Industry analyst Jon Peddie said
very little is known about the investiga-
tion, but it might have originated from
one of two things: In the course of regu-
larly watching industries and prices, the
antitrust division decided that videocard
prices were a little too close—and, indeed,
ATI and Nvidia’s cards consistently fall
within the same price range—or a smaller
system-builder or even a board builder
complained to regulators.
And regarding conspiracy theories
that AMD and Nvidia may have made a
backroom deal to deep-six ATI products,
Peddie said it’s very unlikely: “That would
be a waste of $5.8 billion [the price AMD
paid for ATI].”
“The irony of this is that far from col-
lusion by ATI and Nvidia, which would be
like God and the devil getting together, [theclose pricing] is more an indication of com-
petition,” said Peddie.
Maxwell Blecher, a former DOJ antitrust
lawyer now in private practice, said that
from the bits of information the feds asked
for, it sounds like they are opening a price-
fixing investigation. Blecher noted that these
cases can be pretty difficult to prove without
a paper trail. “That’s what [DOJ lawyers] are
looking for, and that’s why they issue these
dragnet-style subpoenas.” Blecher said
the bulk of DOJ antitrust investigations are
started by a complaint from a competitor or
by an insider who has decided to spill the
beans. He explained that during his days at
the DOJ, the antitrust division could have
two dozen or more investigations underway,
with few of them actually producing proof of
illegal activities. But, Blecher said, you’d be
surprised what people put down on paper.Nvidia
and AMD on
the Hot Seat
08 MAXIMUMPC february 2007
Feds open investigation on
AMD/ATI and Nvidia. Could
videocard price-fixing be
the cause?
It’s possible that two
major competitors in the
graphics game have
actually been in cahoots.GPU Price-Fixing? You Be the Judge
Product Release Date Launch Price (estimate)Nvidia GeForce 8800 GTX November 2006 $
Comparable AMD product not yet released TBA TBA
Nvidia GeForce 7950 GX2 June 2006 $
Radeon X1950 XTX August 2006 $
Nvidia GeForce 7900 GTX March 2006 $
Radeon X1900 XTX January 2006 $
Nvidia GeForce 7800 GTX June 2005 $
Radeon X1800 XT October 2005 $
Nvidia GeForce 6800 Ultra April 2004 $
Radeon X800 XT PE May 2004 $
Nvidia GeForce FX 5800 Ultra January 2003 $
Radeon 9700 Pro August 2002 $quick start The beginning of The magazine, where arTicles are small