Hardware
Email Reveals Nvidia and ATI May Have Colluded to Inflate Prices
Posted by Matt Buchanan at 3:30 AM on July 19, 2008
A graphics card can cost you almost as much as a bona fide Batman gadget, especially when you get up to ridiculous amounts of power and performance, but that ludicrous price is actually less ludicrous than it could be, because of the cutthroat competition between ATI and Nvidia, right? Not so fast. An email Nvidia sent by Nvidia senior VP of marketing, Dan Vivoli, to ATI's president and COO, Dave Orton made public by the judge in an ongoing anti-trust suit against the two companies reveals that they both see eye-to-eye on prices. Namely, that they should be higher:
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. $5 and $8 stocks are a result of no respect.
'Cause price-fixing definitely gets you more respect. It definitely gets you more money though! [Crunchgear]

Comments (AU Comments · US Comments)
There are currently no AU comments for this post.
92BuickLeSabre
Posted 4:14 AM 19/7/08
@Log1c: Absolutely not, and the more I think about it the more frustrated I am by the CrunchGear story and this post referencing one email cited by the plaintiff out of context as though that were a case.
The only statement by the judge is essentially that it is certainly relevant. (It's not good for the defense; a jury would like to see it.)
"Out of 9 million documents turned over in discovery, of particular interest was a 2002 email from Nvidia senior vice president of marketing, Dan Vivoli, to ATI's president and chief operating officer, Dave Orton."
So out of 9 Million documents is this the best evidence the plaintiff has? Is it all the plaintiff has? Was the judge essentially saying, well, this is enough that I'm not going to dismiss the case?
And it's a conversation about how a lack of industry respect has led to low stock prices and they should both step up marketing more? Is that inherently price fixing?
We know so little. Did this happen in relation to a particular event? Did PC manufacturer make fun of them in a magazine the day before?
This may all turn out to actually be something bad, but as of right now we're essentially saying that it must be true because a class-action attorney says it is (and I know how popular class-action attorneys are around these parts.)
92BuickLeSabre
stallionz53
Posted 4:14 AM 19/7/08
This one time I setup a network for a local autobody shop, and the owner was in the other room talking to another body shop saying, "I've talked to X body shop and Y body shop and we're thinking of raising the labor rate to...."
This goes on just about everywhere.
stallionz53
Oracle989
Posted 4:09 AM 19/7/08
@radikaled: Not the system, just the players.
But really, I didn't read that as they decided "LET'S CHARGE MORE! YAY!" I read it more as "LET'S TEAM UP AND MASSACRE INTEL'S GRAPHICS MARKET! YAY!"
Oracle989
Log1c
Posted 4:07 AM 19/7/08
@92BuickLeSabre: I would agree, although it looks bad, they are talking about stock prices and not about fixing the price of graphics cards. We know what they are probably talking about, but that doesn't make it an open and shut case.
Log1c
radikaled
Posted 4:01 AM 19/7/08
This is why Capitalism is so fu**ing stupid sometimes.
radikaled
TheCyberBob
Posted 4:01 AM 19/7/08
Well I'd like to say I'm surprised but I'm not. This is news but at the same time it really isn't sadly.
TheCyberBob
MikeSWelch
Posted 4:01 AM 19/7/08
Fuck those fat fucks. I want a 280 GTX and I want to pay $100 for it.
MikeSWelch
92BuickLeSabre
Posted 3:59 AM 19/7/08
@willyolio: Yeah, while I think the Judge is correct that a jury would want to see it, I'm in no way convinced this email is "the smoking gun" that the plaintiffs' attorneys want you to believe it is.
92BuickLeSabre
Citizen Kang
Posted 3:58 AM 19/7/08
Just how stupid do you have to be to do this in a fashion that leaves an electronic trail? They should do the old way...in back alleys and strip joints. They really should have taught this to those two douchebags in business school. If you're going to break the law, don't leave the evidence laying around.
Citizen Kang
Mike918
Posted 3:56 AM 19/7/08
Nvidia: Hey Ati, i could use a new Ferrari wanna help me?
Ati: Well i want a Porsche...so why the hell not?
Mike918
willyolio
Posted 3:54 AM 19/7/08
wait... what? they agreed to market their products more, to make discrete graphics card sales as a whole to increase. and they do this by... inflating prices together?
if anything, this email is telling me they were trying to drop prices and get more people to buy cards instead of settling with crappy Intel GMAs.
willyolio
wild homes has been retconned!
Posted 3:53 AM 19/7/08
Ouch. This is not going to end well at all.
@stokessd: Yeah, it's like a weird suicide pact. They agreed to artificially fix prices, and then they both agreed to make lethal firebomb video cards-- and only one went through with that part.
wild homes has been retconned!
brjahu
Posted 3:53 AM 19/7/08
So does this mean I get some of my money back?
brjahu
mpar
Posted 3:48 AM 19/7/08
they are going to pump you up
mpar
Weihovah
Posted 3:46 AM 19/7/08
that's not very surprising. what is surprising is that these dumb asses discussed this over email.
Weihovah
TerryinSt.Paul
Posted 3:42 AM 19/7/08
Integrated graphics FTW!
TerryinSt.Paul
ddaq89
Posted 3:40 AM 19/7/08
BASTARDS!!
ddaq89
Mr.DuckSauce
Posted 3:40 AM 19/7/08
@Puck: You are correct sir!, wow, me and a friend had a discussion on the graphic's card market of inflation, I said they weren't doing it, but he is right, they are doing it. Everything is so corrupt on many markets now.
Mr.DuckSauce
stokessd
Posted 3:38 AM 19/7/08
Wait a second, they colluded on prices, but only one of them will blow up. That's the one I want.
stokessd
Puck
Posted 3:36 AM 19/7/08
What's next, other oligopolies like oil companies and automakers colluding to inflate prices as well?
Oh wait...
Puck
impreza
Posted 3:35 AM 19/7/08
hopefully the courts fuck them and I get get a quad SLI setup for 1/3 the cost.
impreza
zimstyles
Posted 4:50 AM 19/7/08
might be time to go back to the likes of matrox or integrated graphics!
zimstyles
jchasse
Posted 4:46 AM 19/7/08
@impreza: You think if they take a big hit on the chin they are going to drop prices? To bad you won't be able to get any stable drivers for that setup because they had to cut overhead to cover any settlement. I am sure the suits will feel awful when they don't get their bonus this year even after they "save the company millions" by cutting back on r/d and programming staff.
This won't end well for anyone.
jchasse
wwilsonxp
Posted 4:40 AM 19/7/08
I'm not surprised at all. I hope they get a beating for this one.
wwilsonxp
Zomb
Posted 4:37 AM 19/7/08
There is no way that can hold up in court if either company has a half decent lawyer. They aren't even talking about the price of their product. He just said they should work together on marketing
Zomb
newgalactic
Posted 4:36 AM 19/7/08
@Puck: ...Good point, but don't forget Verizon/AT&T.
newgalactic
jmckee
Posted 4:35 AM 19/7/08
Exactly, product cost and stock cost aren't always directly related. They could be discussing that the importance of their technology is under appreciated by investors and both working on focusing marketing on the importance of graphics chips in general outside of just gaming such as military, science and medical uses of them.
There is nothing really wrong with that. Feeling that both companies are undervalued by investors and wanting to change that doesn't necessarily that you want to raise the prices of your products.
jmckee
Scott
Posted 4:28 AM 19/7/08
Is there really a problem here? If you are willing to pay it then more power to them. I for one will not pay those prices and as a result don't buy the latest and greatest games. I make do with something less.
Scott
Log1c
Posted 4:21 AM 19/7/08
@92BuickLeSabre: Yup, and even I'm guilty a bit for preconceived notions in that we infer that because they have low stock prices the only way to increase them is via price fixing because there is now a lawsuit about it.
Log1c
CTRLled
Posted 5:10 AM 19/7/08
Quite honestly, this really bites. I respected these companies for what they made. HELL! I cut my digital teeth on them.
CTRLled
damnElantra
Posted 5:05 AM 19/7/08
three words, nvidia developer zone
got two quadro 5600's at cost, $495 a pop
damnElantra
ps61318
Posted 4:57 AM 19/7/08
@92BuickLeSabre: Yes, but...
I guess I don't understand how the law works in this regard. It looks as though two businesses competitors are colluding to manipulate the market. Even though the stock price (and not the product price) was at issue, it is still talking about market manipulation.
ON THE OTHER HAND... What about trade shows? Competitors always get together to discuss the industry and how to "raise all ships" and that's certainly ok. Is the difference here that it's NOT the whole industry, just two companies?
Hmmm. The more I learn the more I realize what an ignoramus I am.
ps61318
Sh3rpa
Posted 5:48 AM 19/7/08
@ radikaled
yeah, cause we all want graphics cards issued by the state.
"Did you check out The People's Card 4000?"
Sh3rpa
tenio
Posted 5:34 AM 19/7/08
to me it sounds more along the lines of
"lets stop telling consumers your cards suck, lets instead tell them intel sucks"
kindof like obama/hillary and mccain
but i can also see this as possible price fixing if there are other emails to back that up
tenio
ps61318
Posted 5:25 AM 19/7/08
@92BuickLeSabre: Maybe that's why he wants a jury to decide... fine lines and too darn much grey area.
ps61318
92BuickLeSabre
Posted 5:22 AM 19/7/08
@ps61318: Maybe. I guess it depends on what "I really think we should work harder together on the marketing front." Maybe it's obvious and I just don't see it, but what if they're just planning on creating a trade show? Or Industry Association?
*shrugs*
92BuickLeSabre
saint88
Posted 6:04 AM 19/7/08
"A graphics card card can cost you" - error?
saint88
geowrian
Posted 6:03 AM 19/7/08
A behind-the-scenes email from senior members of one company to the senior members of one of their largest competitors regarding marketing and stock prices is very shady at the least. It should never have happened unless they were either idiots or were trying to inflate the price.
geowrian
jkadin
Posted 5:59 AM 19/7/08
@jchasse: "To bad you won't be able to get any stable drivers for that setup because they had to cut overhead to cover any settlement"
Wait, we've been getting stable drivers? When has this started happening? I've been having problems with trying to upgrade my ATI drivers for months now. I call and email and call and email and every time I talk to them, they basically end up saying "You must be lying, our drivers work perfectly" even though I can prove exactly whats wrong by uninstalling the drivers and making everything work again. What you say makes sense, but they haven't been providing quality support or stable drivers for a long time now, so I'd be happy if they lowered prices to compensate.
jkadin
DustyButt
Posted 5:51 AM 19/7/08
@ps61318: I think the problem is that two market entities are attempting to act as one to manipulate stock prices.
At a trade show they can say: "We've teamed together to raise the bar in performance, availability, distribution, and consumer appeal to ultimately increase our profits and stock value."
OK cool, you're a business that's what you're supposed to do.
However, what they can't do is say: "We're coordinating our efforts to box out competitors and generate ficticious positive speculation. We'll do this by using artificial means that cannot normally exist in a competitive environment in order to inflate both of our stock prices... Thank You."
Somewhere, between the two statements, is a line and they MAY have crossed it.
DustyButt
jonpeddie
Posted 4:43 AM 19/7/08
This in no way is a collusion for price fixing. What Vivoli is saying to Orton, who BTW happen to be very old friends and worked together at SGI, is they would like the segment of graphics to be more appreciated by the investor community and get their share price up - it has nothing whatsoever to do with price fixing.
jonpeddie
Digo
Posted 6:43 AM 19/7/08
Imagine pwning Crysis for $100. Then everyone could do it. Wait, then it wouldn't be cool anymore. I'm stuck at a crossroad within my mind, so I'll go with the one that costs me less.
Digo
matt buchanan
Posted 6:26 AM 19/7/08
@saint88: Late night showing of The Dark Knight exploded my brain.
matt buchanan
92BuickLeSabre
Posted 6:21 AM 19/7/08
@DustyButt: Well said.
92BuickLeSabre
SneakerFiend
Posted 7:57 AM 19/7/08
@Weihovah: you'd think they'd have a conversation face to face. It really is sad that they would result to that. I thought they were bitter enemies and wanted each other's heads on a GPU platter.
SneakerFiend
Alex2643
Posted 9:34 AM 19/7/08
its just good business
Alex2643
sirsri
Posted 12:16 PM 19/7/08
Of course they will argue:
"we have the common goal of making our category a well positioned, respected playing field" - means the graphics card business is confusing to consumers and they need to get together on the "marketing front" so that consumers "respect" the value of their products over the intel integrated POS's and more generally "respect" the value of a good graphics part over a poor one. When customers "respect [sic understand]" the value of their product the stock prices will go up.
One one hand they'd probably be lying, on the other hand, the PC gaming alliance is proof that this is certainly true even moreso now than 6 years ago when XP was new and could run with a graphics card that didn't support OpenGL or DirectX (any version).
sirsri
Absent Blue
Posted 1:24 PM 19/7/08
If they want more respect they need to keep developing their other areas like they have been. They're on the right path with looking into mobile devices and PMPs but also with Cuda and Gelatto. Heck, take a cue from that Swedish guy (he was Swedish, right?) that put four 9800GX2s together to make a super-computer for medical imaging.
Absent Blue
kamsolusar
Posted 1:47 PM 19/7/08
Actually, it seems this is pretty good evidence of wanting to manipulate product prices. By acting as an oligopoly and charging more due to less competition, they increase profits even though they sell fewer cards (basic supply/ demand). By increasing profits, they can push up their stock prices and get some of that street cred respect they so desire...(Wall street cred, teehee)
kamsolusar
michaelwiggins
Posted 2:19 AM 20/7/08
Wow, now gamers have even LESS going for them.
michaelwiggins
michaelleung
Posted 4:08 PM 21/7/08
Hey, who cares. I've got my trusty 8800GTX. As long as Peggle works, I'm fine.
michaelleung
rmoan1
Posted 8:59 AM 19/7/08
An out of context email from '02, which can be interpreted as you wish? lots of BAWWWWWWWWWWWW on the intertubes and a lawsuit?
Get real, if they wanted to fix prices nvidia wouldn't have released the g92/g90 chip sets, do any of you actually follow the market? Nvidia has been chipping away at ati's market for almost a half a year. They've finally caught up with the 48xx series cards. The 8800 GT was the most successful card nvidia has made to date and it dominated the market.
Now if they can catch up with intel's cpus that would be something to get excited about not stupid emails from 2002. - (thou posting losses for 7 quarters straight might make it a weebit hard for them)
rmoan1