Graphics card manufacturer Nvidia Corp. has revealed it is facing some 51 civil complaints alleging price fixing and anti-competitive business practices relating to its competition with rival ATI, now owned by Advanced Micro Devices Inc. (AMD), alleging the companies conspired to keep component prices artificially high.
The Santa Clara, Calif.-based company revealed in its annual report in March that 42 civil complaints had been filed against it. While the majority were filed in the Northern District Court of California, a number were also pending in the Central District Court of California and several other Federal district courts. Published reports last week indicate the number of suits has now reached 51.
The suits appear to be related to an investigation by the anti-trust division of the U.S. Department of Justice (DOJ) into potential antitrust violations related to graphics processing units and cards. Although no specific allegations have been made by the DOJ, subpoenas were issued last November against Nvidia and AMD.
“Although the (civil) complaints differ, they generally purport to assert federal and state claims based on alleged price fixing, market allocation and anti-competitive business practices between us and (AMD) as a result of its acquisition of ATI,” Nvidia said in its annual report.
Nvidia did not return requests by Computer Dealer News for comment, but in its annual report the company indicated it viewed the allegations as “without merit” and indicated it planned to vigorously defend the cases. It is unclear if AMD if facing similar civil suits and a request for comment from AMD was not returned.
Michelle Warren, a senior research analyst with Info-Tech Research Group in London, Ont., said she finds it interesting AMD has yet to face similar suits.
“If both organizations were (alleged to be) fixing prices on their graphic components then wouldn’t both [be sued]?” said Warren.
Without reviewing the complaints Warren said it is difficult to comment on their merit, but she said Nvidia and AMD/ATI have traditionally been strong competitors, particularly in the high-end component space. While Nvidia has generally been the leader, she said ATI was never far behind.
While the legal process is underway Warren said she doesn’t expect much impact on either end users or the reseller market, particularly given Nvidia’s strong technology and its strong following with system builders and tier one vendors.
She recommends, however that system builders keep an eye on the issue, and on component pricing.
“That’s what would have affected the system builders to begin with; they would have (allegedly) seen price-fixing between ATI and Nvidia,” said Warren. “Just be aware of what the prices are between AMD and Nvidia and if you notice something a bit off call the vendors on it. Ask what that’s all about.”
Comment: [email protected]
