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NVidia, AMD Subpoenaed In Antitrust Investigation

Posted by Zonk on Fri Dec 01, 2006 03:23 PM
from the business-of-making-shinies dept.
Graphics Software Government The Courts Hardware News
mustardayonnaise writes "CNN Money is reporting that graphics chipmakers Nvidia and AMD (who recently acquired NVidia rival ATI) said Friday that they received subpoenas from the US Department of Justice as part of a probe into potential antitrust violations involving graphics processing units and cards. Each company controls about 25% of the entire graphics chip market. According to the article, Intel, who makes their own fair share of graphics chipsets, has yet to be included in the investigation."
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NVidia, AMD Subpoenaed In Antitrust Investigation 50 Comments More /

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  • by that token (Score:5, Insightful)

    by eneville (745111) on Friday December 01 2006, @03:25PM (#17071602) Homepage
    well, if this is happening, why isn't intel/amd being questioned about their control over pc chips?

    • Re:by that token (Score:4, Informative)

      by hirschma (187820) on Friday December 01 2006, @03:28PM (#17071690)
      You mean, this [eweek.com]?

      • Re:by that token (Score:4, Interesting)

        by rwven (663186) on Friday December 01 2006, @04:39PM (#17072992) Homepage
        That's not what the parent meant... He meant "why isn't the goverment going after AMD *and* Intel just like they're going after AMD *and* NVIDIA."

        This is "gov't vs. business," not "business vs business" like the current AMD and Intel case.

    • Also investigate MS XBox / FOSS driver issues (Score:4, Interesting)

      by dsginter (104154) on Friday December 01 2006, @03:56PM (#17072212)
      Is is just a coincidence that both Nvidia and ATI were each awarded Xbox contracts (Nvidia = Xbox, ATI = Xbox 360)? Perhaps there was some behind the scenes deals to thwart the development of FOSS graphics drivers.

      With the top two graphics chip companies controlling the majority of the market, this could have happened. Perhaps the "patented code" in the drivers that prevents them from opening the source is Microsoft-owned?

      I know that it will never happen, but it would be nice to bring it up just in case someone is listening.
  • Intel, who makes their own fair share of graphics chipsets, has yet to be included in the investigation.

    From TFA: "To my knowledge, we haven't gotten a subpoena ourselves ... but I'm not 100 percent certain," said Intel spokesman Chuck Mulloy, adding he was checking with company lawyers to confirm.

    You know, as an investor, I'd rather go with the company that has been subpoened over the one that can't quite be sure!

  • priorities? WTF? (Score:5, Insightful)

    by User 956 (568564) on Friday December 01 2006, @03:29PM (#17071704) Homepage
    CNN Money is reporting that graphics chipmakers Nvidia and AMD (who recently acquired NVidia rival ATI) said Friday that they received subpoenas from the US Department of Justice as part of a probe into potential antitrust violations involving graphics processing units and cards. Each company controls about 25% of the entire graphics chip market.

    Meanwhile, the RIAA, who has a stranglehold over the music industry, gets to drive their truckloads of money straight to the bank.

    • Re:priorities? WTF? (Score:4, Insightful)

      by jimstapleton (999106) on Friday December 01 2006, @03:35PM (#17071826) Journal
      Please mod whoever said that is off topic as "stupid"

      Honestly, it's a very good point, why are two agressively competative companies, having half the market share being examined for antitrust, while the RIAA fatcats, who are obviously a TRUSTworthy consortium not?

        • Re:priorities? WTF? (Score:4, Insightful)

          by Tweekster (949766) on Friday December 01 2006, @04:06PM (#17072380)
          They are highly competitive against each other. they are only deadlocked because of their competition, if one just sat back they would soon see their asses handed to them.

          Antitrust issues come in when the consumer is getting screwed. in the case of video cards you may only have 2 major options, however they are constantly trying to out innovate the other in order to gain some market share (and not fall behind) defiantly a good situation for the consumer.

          there are many monopolies in industries, however if the consumer isnt being adversely affected then the issue isnt raised near as much

          • WTF? (Score:3, Insightful)

            by cbhacking (979169)
            It doesn't seem logical anyhow. Sure, there may be only two high capability options, but that doesn't make them monopolies. Besides, there AREW a few other companies out there... Intel doesn't have the other 50%. So, you have at least THREE major corporate players, all within a factor of two of each other marketshare-wise, plus third (fourth?) parties. Intel might not really directly compete with NVidia, but ATI has had and continues to have integrated solutions for laptops, at least. I've tried one; it's n
        • That's inaccurate to say the least. The majority of ATI/nVidia based video graphics cards are produced by 3rd parties, so obviously the market for video cards is healthy(maybe too competetive, I hear the margins are razor thin).

          If you are speaking of the graphics chips themselves, there is obviously competition. Both companies are enduring and adapting to a visciously short product revision cycle, where every couple months both companies release revamped versions of their graphics chips. This has had an inc
          • [quote]Just yesterday I picked up a new nVidia-based graphics card from Fred Meyers(Kroger for you east-coasters) for $75.[/quote]

            Ok, there's not many of them over here in SC, but last I checked Kroger was a grocery store. I don't know about you but I'd prefer to buy my graphics cards and my produce from different locations.
    • Oh please, we all know the RIAA doesn't have truckloads of money heading to the bank. They use a serious of tubes! Sometimes, they get clogged.
      • And that, boys and girls, is why pirating music isn't so bad after all. You wouldn't want the RIAA's tubes to get clogged with all your money, would you?
    • "CNN Money is reporting that graphics chipmakers Nvidia and AMD (who recently acquired NVidia rival ATI) said Friday that they received subpoenas from the US Department of Justice as part of a probe into potential antitrust violations involving graphics processing units and cards. Each company controls about 25% of the entire graphics chip market."

      Meanwhile, the RIAA, who has a stranglehold over the music industry, gets to drive their truckloads of money straight to the bank.

      To make a video chipset y

      • Meanwhile, the RIAA, who has a stranglehold over the music industry, gets to drive their truckloads of money straight to the bank.

        They're not subjected to the same laws as companies.

        Maybe ATI and NVidia should for the GCIAA (Graphics Chip Industry Association of America). That way, they could be just like the RIAA and MPAA and be completely above the law.

      • Re:priorities? WTF? (Score:5, Insightful)

        by Darth (29071) on Friday December 01 2006, @03:57PM (#17072228) Homepage
        the RIAA is made up of companies. it exists to represent the major companies' common interests.

        In the oligopoly of the music industry, the RIAA is the cartel that allows the major players to exert monopoly control on the market.

        The fact that the RIAA itself is not a company should not be sufficient to protect its existance and protect its members from antitrust prosecutions.
        • There are technically a non company organization (non profit i believe) acting on behest of the members.

          the labels tell the RIAA what to do, not the other way around.
  • Maybe NVidia and ATI need to bring 3Dfx back as a straw man to claim that there's no anti-trust issues. They could bring back S3 but people would fall down laughing. The days when graphic chips truly sucks are long gone.

  • OMG They are the only two companies... (Score:4, Funny)

    by jimstapleton (999106) on Friday December 01 2006, @03:30PM (#17071734) Journal
    that are making gaming graphics cards that are actually really useful - their great cards are making it impossible for competators to compete with their lackluster cards! It must be a case worth of an antitrust suit!
    • It's the SCO business plan: if you can't compete, litigate!

    • Re: (Score:3, Insightful)

      by erroneus (253617)
      I know... it's sarcasm, but you didn't mark it up that way specifically.

      But these kind of situations are most likely built on patents (licensing, trading, whatever) as a means to lock out competitors. This is obviously not what the patent system is supposed to be used for.

      I'm certain there are a multitude of patents related to the implementation of OpenGL, for example. It would be my guess that the costs for implementing cards that would otherwise violate these patents would cost more than they could sell

  • Glad the DOJ has their priorities straight (Score:5, Insightful)

    by darkwhite (139802) on Friday December 01 2006, @03:37PM (#17071850)
    Ah, so the DOJ is perfectly happy with multibillion-dollar competition-free contracts for "rebuilding Iraq" and blatantly monopolistic behavior by telecom providers, they think allowing Microsoft to racketeer OEMs into forcing customers to buy Windows with every machine they sell is absolutely fine, and of course they won't even dare to think about prosecuting other branches of their own government for numerous violations of the Constitution and war crimes, but when two companies, by persistently competing with each other and achieving near-perfect parity for long periods of time, create one of the most staggeringly cutthroat markets on the planet, they must of course be investigated.

    Good job, DOJ!

    • Re:Glad the DOJ has their priorities straight (Score:5, Interesting)

      by Chris Burke (6130) on Friday December 01 2006, @04:02PM (#17072312) Homepage
      Well since there is no mention of what is actually alleged to be the problem, I can't really say whether or not this investigation has any merit. Certainly neither company has a monopoly, so the only thing I can think of is that the DOJ suspects some kind of collusion (the 'trust' in 'anti-trust' refers to multiple organizations agreeing to lock out competitors, not just individual monopolies).

      Frankly I'm not going to assume anything. Yeah, the graphics card market is competitive and NVidia and ATI have done a very nice job of leapfrogging each other over and over into the stratospheres of graphics performance, and I hope that doesn't change. However if they are using illegal business tactics to ensure it doesn't become a 3-way race, then that has to stop. Kinda like when Rambus (*spits*) turned around and sued the Dramurai, who it turned out were colluding to control prices and lock out Rambus (*spits*).

      Of course I'd rather they spent their time worrying about all the other things, but I'm sure it's not an either-or proposition, and again we're operating under a dearth of facts. Though I'll admit that unlike anti-trust action against Microsoft and Intel, I'm not already aware of shady business practices on the part of these two companies that would warrant it.
    • The antitrust division of the DOJ doesn't handle fraud cases like that...
    • by persistently competing with each other and achieving near-perfect parity for long periods of time

      That's the problem. That's terribly unlikely unless there is some kind of collusion going on.

      But your logic of MS="evil" monopoly and AMD+Nvidia="good" monopoly... well, I guess there is no logic.

  • Huh? (Score:3, Insightful)

    by PingSpike (947548) on Friday December 01 2006, @03:38PM (#17071870)
    I don't get it...what is the DOJ's angle here? There is real competition in the graphics card market, more so then the processor market and definately more then say...the operating system market.

    Why are they going after these guys anyway?

    • Re: (Score:3, Interesting)

      by soft_guy (534437)

      I don't get it...what is the DOJ's angle here? There is real competition in the graphics card market, more so then the processor market and definately more then say...the operating system market.
       
      Why are they going after these guys anyway?
      Probably they didn't contribute enough money to the Bush re-election campaign.
    • Just because there are 2 companies with competing products doesn't mean that they don't collude on price fixing, etc. Ever hear of a firm called Archer Daniels Midland? They have lots of competitors worldwide. In the mid/late 1990s they were found guilty of price fixing along with their global "competitors." Just Google "ADM price fixing" for the whole story. Also, there's a great segment on "This American Life" about the executive that helped nail ADM. It's a very twisted tale about how this fellow w

  • Well, it's a pretty crooked market (Score:5, Informative)

    by 91degrees (207121) on Friday December 01 2006, @03:43PM (#17071956) Journal
    I worked for a company that made 3D chips. We had a pretty good component. Not astoundingly fast, but a competitive mid-range component more than adequate for the current crop of games. Faster and cheaper than the GeForce 2 when that was still considered a competitive card.

    So, the sales people went to various board manufacturers, and said "Do you want to buy our chip". The board manufacturers said Gosh. That's perfect for our mid-range market. We'd love to. Our sales people went home happy. nVidia's sales people said "Do you want us to keep selling you our chips?" The board manufacturers sid "Yes, of course we do". nVidia said "well, don't buy chips from that other upstart company".

    Apart from the huge board manufacturers who would be able to seriously dent nVidia's sales, none of them were interested in us any more.

    • Re:Well, it's a pretty crooked market (Score:4, Interesting)

      by Prof.Phreak (584152) on Friday December 01 2006, @04:01PM (#17072292) Homepage
      "well, don't buy chips from that other upstart company".

      Frankly, as a consumer, I wouldn't buy a graphics card from an upstart (or a board that has built in graphics from an upstart). It's a chicken-egg problem.

      Many folks got stuck with 3d hardware cards and no company and/or no supported drivers... with Nvidia (dunno about ATI), you can take their TNT2 card and still get it to work with their -current- drivers (even on Linux!). Had it been some unknown-brand card, you might not even get X to come up (and have to use Windows in VGA mode).

      So yeah... competition sucks. What a small corp can do is compete on openness. Sure, I'd buy some unknown brand if it follows some open standard, has open source drivers, and works with Linux out of the box. In fact, that's the only way I see how a small corp can get ahead in this business.
      • Frankly, as a consumer, I wouldn't buy a graphics card from an upstart (or a board that has built in graphics from an upstart). It's a chicken-egg problem.

        Well, *you* might not, but someone else might. However, that someone else didn't have the opportunity to do so (that is, if the story is true).

      • Many folks got stuck with 3d hardware cards and no company and/or no supported drivers...

        I'm using Linux and FreeBSD. Nvidia's out-of-date crippleware drivers don't count as "supported". The non-existant ATI drivers even less so.

        I don't agree with this anti-trust move, but that doesn't mean I think NVidia/AMD are above criticism.

    • Re:Mod Parent Informative (Score:4, Interesting)

      by mpapet (761907) on Friday December 01 2006, @04:02PM (#17072322) Homepage
      The number of times this particular order of events happens in the tech world qualifies it as Standard Operating Procedure.

      I didn't RTFA, I'm more interested to hear the chain of events that got the DOJ started on this particular issue. As I recall, it was intense lobbying in DC by Microsoft's competitors that finally got them into trouble.

      Which competitor(s) got the DOJ started on this one? Microsoft? Intel? ?
    • MS did the same thing with BeOS...

      "If you want to continue selling Windows machines, youll forget about this little BeOS thing"
    • If I'm a little skeptical that is all that prevented you from coming to market. See, there have been (and are) other companies that try to compete with nVidia and ATi. Matrox, S3, XGI, and Bitboys have all tried at one time or another to directly compete in the performance market. In every case the basic problem has been the same: They failed to deliver on their claims. Bitboys failed to deliver at all. They kept talking up this awesome accelerator but nobody ever actually saw the thing in final silicon. Th
      • See here [wikipedia.org]. The article specifically mentions the GF2 as a competitor. It was a very good chip for the time and the price.
        • I remember benchmarks for the powervr... In some cases it was competitive but it lackded features like hardware T&L and framerates and benchmark were lower then the radeon/geforce of the time because of it.

          Those were the primary reasons i avoided their Kyro line of graphics cards for the pc. The performance was lacking overall when you put hardware lighting into consideration.
        • PowerVR is alive and well in my Nokia cell phone.

  • What are they wasting our tax dollars on now? (Score:3, Insightful)

    by HermMunster (972336) on Friday December 01 2006, @04:18PM (#17072618)
    I think there's great competition and I doubt any sort of fixing of price has been happening. One has to wonder the motivation behind this. Why are they spending our tax dollars when it is obvious that we have great competition, lots of manufacturers, great prices, lots of power, enormous competition with integrated chipsets, etc.

    Any word on why this is happening or are we just funding some Justice Dept's employee's rise to celebrity?

    • Re: (Score:3, Insightful)

      by MrBulwark (862510)
      My guess would be that the cost to develop working drivers would outweigh the profits that they would see from increased Linux user base. By the conspiracy idea is a good one too ;)

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