Nvidia Settles Price Fixing Lawsuit

A recent major class action lawsuit that was brought against both Nvidia and ATI for conspiring to fix, raise, maintain and stabilize prices of graphics processing chips and cards may soon be coming to a resolution.

According to a 8-K form filed on 24 September, Nvidia has put forth a settlement agreement to resolve the class action lawsuit brought against it and ATI. The settlement would have both ATI and Nvidia each paying $850,000 to the certified class, for a combined $1.7 million. While that agreement is still subject to court approval, a second settlement agreement has already been agreed to by the remaining individual indirect purchaser plaintiffs in the action. It would seem $112,500 is to be paid “in exchange for a dismissal of all claims and appeals related to the Action raised by the individual indirect purchaser plaintiffs.”

The class action lawsuit against both Nvidia and ATI was filed in late August of this year, by plaintiffs Jordan Walker and Michael Bensingor. According to the plaintiffs, Nvidia and ATI allegedly violated federal antitrust laws by conspiring “to fix, raise, maintain and stabilize prices of graphics processing chips and cards.” As well, the plaintiffs contended that both Nvidia and ATI were unlawfully colluding “to coordinate new product introductions.” The plaintiffs were seeking “triple damages, attorney fees and the costs under the federal antitrust laws.” The certified class is limited to “all individuals and entities who purchased graphics processing card products online from the defendants’ websites in the United States during the period from December 4, 2002 to November 7, 2007.”

According to the lawsuit, ATI and Nvidia had denied the allegations. Back in earlier September though, Tom’s Hardware obtained exhibit documents that showed alleged conspiring between top executives and managers of ATI and Nvidia. One of the documents showed an alleged email conversation between Dan Vivoli of Nvidia and Dave Orton of ATI, in which Dan wrote:

"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 the result of no respect."

Without admitting any wrong doing, it would appear ATI and Nvidia have avoided a possibly nasty legal case in which a potential guilty verdict may have been found. A settlement does not admit guilt, as a quick settlement could be beneficial even for an innocent party, though it still raises some suspicion. By agreeing to a settlement, it would seem ATI and Nvidia have chosen not to challenge the accusations made against them.

At this time, it’s still uncertain how affected consumers will be able to get a slice of the $1.7 million pool.