AMD, Nvidia Conspire to Price Fixing; Sued

In late August of this year, a major class action lawsuit was filed in the state of California against ATI/AMD and Nvidia, alleging that the two primary graphics cards companies conspired to price fixing of GPU processors and graphics cards.

The suit was filed in the U.S. District Court for the Northern District of California and the courts have ruled that the filing may proceed. The plaintiffs are Jordan Walker and Michael Bensingor, who have filed the suite on behalf of themselves and anyone else who has been an ATI or Nvidia customer.

According to the class action filing:

"The Named Plaintiffs allege that, in violation of the federal antitrust laws, Nvidia and ATI conspired to fix, raise, maintain and stabilize prices of graphics processing chips and cards. The Named Plaintiffs also contend that Defendants unlawfully colluded to coordinate new product introductions."

Just two years ago, both AMD and Nvidia were reported to have conspired to similar antitrust behavior. According to reports from 2006, AMD and Nvidia allegedly exchanged emails between top executives in an effort to stabilize and maintain minimum pricing for both chips and cards.

Now those half truths seem to be true. Tom’s Hardware was able to obtain the legal documents for the filing as well as exhibits, showing detailed email exchanges between top ATI executives and managers and those from Nvidia. In one such email, Paul Ayscough of ATI exchanged long emails with Kevin Shuh of Nvidia, talking about working more closely together:

"We launch the GPU initiative at some industry show together. Perhaps something like Meltdown or IDF. We could even share a GPU initiative booth together to get tons of PR from the press."

Another email exchange between Ayscough and Shuh even had Ayscough saying that Intel would never make a discrete GPU part, and asserted to taking advantage of this situation to bolster each other’s position in the market. As we all know today however, Intel has stepped into the graphics playground in a very big way with it’s Larrabee architecture.

In another email between Dan Vivoli of Nvidia and Dave Orton of ATI, 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."

In the same email, Dan wrote:

"Both of us have spent the last three years trying to bring the perceived value of our products up to the level of Intel. The "GPU" category is clean and has served us well that way. We both have increased the price of our high end product several fold over the last 4 years while Intel’s high end prices have more than halved. Creating another category serves to work contradictory to that. How does one cleanly position it versus a GPU and a CPU?? It will tear down what we have both built."

The class action also seeks to cover triple damages, attorney fees and other costs associated with federal antitrust laws. The suite is being represented by Boies, Schiller, and Flexner LLP. The overall case will be looked over by District Judge William Alsup. The law firm indicated that those who do not wish to be represented by this suite can send in a letter to the firm by October 12, 2008 to the following address:

Request for Exclusion Form to:
In re: GPU Antitrust Litigation,
1999 Harrison Street,
Suite 900,
Oakland, CA 94612