NVidia, AMD Subpoenaed In Antitrust Investigation

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."

Comments

by that token

[eneville]

well, if this is happening, why isn't intel/amd being questioned about their control over pc chips?

Re:by that token

[hirschma]

You mean, this?

Re:by that token

[rwven]

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.

Intel Correction

[Shadow Wrought]

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!

Re:Intel Correction

[Iamthefallen]

An Intel spokesman later followed up and said: "We're 99.999999999990437% certain we have not been subpoenaed."

priorities? WTF?

[User 956]

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?

[jimstapleton]

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?

[Darth]

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.

Re:priorities? WTF?

[Tweekster]

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

Re:priorities? WTF?

[tehSpork]

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?

OMG They are the only two companies...

[jimstapleton]

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!

Re:Linux whining ahead

[MrBulwark]

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 ;)

Glad the DOJ has their priorities straight

[darkwhite]

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

[Chris Burke]

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.

Huh?

[PingSpike]

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?

Well, it's a pretty crooked market

[91degrees]

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

[Prof.Phreak]

"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.

Also investigate MS XBox / FOSS driver issues

[dsginter]

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.

Re:Also investigate MS XBox / FOSS driver issues

[mrchaotica]

I'm probably one of the bigger tin-foil-hat-wearers around here when it comes to Microsoft, and not even I would believe something like that. You're just flat-out crazy, buddy.

Re:Mod Parent Informative

[mpapet]

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? ?