When Colluding With A Competitor, Perhaps Don't Send A Direct Email Suggesting You Keep Prices High

from the might-come-back-to-bite-you dept

Thu, Jul 17th 2008 3:13am — Mike Masnick

It's rather rare these days to see collusion lawsuits where there's overt evidence of collusion. Instead, it's usually implicit collusion where a case needs to be made that this is a problem. However, every once in a while you still get those good old fashioned situations where there's evidence of direct price fixing. For example, the Inquirer points us to a case involving questions of collusion in the graphics card market between ATI and NVIDIA, where it appears NVIDIA's VP of marketing sent an email to ATI's president and chief operating officer suggesting that, while the two companies were competitors, they should work more closely to make sure their stock prices each remained high. Apparently, the lawyers in the case tried to hide that document as a "trade secret." If you consider it to be a "trade secret" that the two companies may have been collaborating, then perhaps they have a point. But the judge didn't buy it: "This court is not a wholly-owned subsidiary of your companies. I am against you hiding information from the public."

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: collusion, email, video cards
Companies: ati, nvidia

25 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Eeqmcsq, 17 Jul 2008 @ 3:48am

Law and Order
"This court is not a wholly-owned subsidiary of your companies. I am against you hiding information from the public" - This line sounds like something that belongs perfectly in an episode of Law and Order.
[ link to this | view in chronology ]
Alex, 17 Jul 2008 @ 4:54am

That's strike fifteen against nvidia, I think. Buy amd, guys
[ link to this | view in chronology ]
Haywood, 17 Jul 2008 @ 5:04am

They are beginning to annoy me
I've been a Nvidia fan since the Geforce 2. When they started the confusing model nonsense, (shouldn't a 5600 be better than a 5200?) I lost a lot of faith in them, but still I sorted through it. I always suspected they were price fixing.
I also suspect they artificially dry up the supply of old chips/cards when the new one is released, killing the chance to bottom feed on last years model. Wake up guys, I now have my first ATI based system, and I'm liking it.
[ link to this | view in chronology ]
- Anonymous Coward, 17 Jul 2008 @ 5:26am
  
  Re: They are beginning to annoy me
  Umm... Werent they colluding with ATI? I fail to see how you stuck it to them.
  [ link to this | view in chronology ]
  - ATI STOOGE?, 17 Jul 2008 @ 5:33am
    
    Re: Re: They are beginning to annoy me
    sorry, where do you work again?
    
    Just a thought. :)
    [ link to this | view in chronology ]
    - Haywood, 17 Jul 2008 @ 6:40am
      
      Re: Re: Re: They are beginning to annoy me
      Long retired, and not in the tech sector at that. I'm a builder/ gamer, and my lone ATI is in my Media Center, where they are supposed to be a tick better. I've had 8 Nvidia cards & still have 3 7900s in everyday use, 2 in dual sli & 1 single. The driver thing has kept my loyal, as they always seem to keep that end of it up. But as I said they are starting to annoy me.
      [ link to this | view in chronology ]
- Um... that's not cricket, 17 Jul 2008 @ 5:31am
  
  Re: They are beginning to annoy me
  Nice to hear you try ATI for their graphics cards... but aren't they also being charged in this lawsuit?
  [ link to this | view in chronology ]
- Possible ATI STOOGE?, 17 Jul 2008 @ 5:34am
  
  Re: They are beginning to annoy me
  so... does ATI pay well?
  [ link to this | view in chronology ]
  - Anonymous Coward, 17 Jul 2008 @ 8:36am
    
    Re: Re: They are beginning to annoy me
    Your an iphone fanboy, aren't you?
    [ link to this | view in chronology ]
- mdmadph (profile), 17 Jul 2008 @ 6:11am
  
  Re: They are beginning to annoy me
  I think you've got some points, but just to be devil's advocate, ATI's guilty of the same thing -- remember the Radeon 9600? Yeah, it was slower than the 9500. :P Other than that, though, ATI is a lot better with their version names.
  [ link to this | view in chronology ]
Chuck, 17 Jul 2008 @ 5:07am

FYI
It takes two to collude
[ link to this | view in chronology ]
- Anonymous Coward, 17 Jul 2008 @ 5:32am
  
  Re: FYI
  Exactly. If its collusion, ATI/AMD is in on it as well. And I've noticed that if you buy ATI or NVIDIA it tends to be based entirely on personal experience.
  
  For example, *every* ATI card I've ever known has performed poorly for its price and I constantly have driver issues.
  
  NVIDIA cards on the other hand, I've always felt like I've gotten my money's worth (only card I bought when it was first released was the 7800GTX) and never had any driver issues.
  
  And I'm running Vista Ultimate x64! How the hell do I NOT have driver issues with anything but the Asus Xonar D2X?
  
  That said, if its mobile I want ATI. For some reason (in my experience, again) their mobile graphics solutions always are rock solid.
  [ link to this | view in chronology ]
  - Matt (profile), 17 Jul 2008 @ 6:16am
    
    Re: Re: FYI
    interesting; I am in the reverse scenario: I want ATI for desktop, Nvidia for mobile. This makes it sound like your point is valid, however, it is not.
    
    Its not a personal experience at all. What generation of card you and I used, and driver support for that generation and what games came out and what processor you used with the graphics card all come into play whether one card or the other was a better experience. There are sites that do performance testing and they will show you which card does better in what scenarios, etc. Personal opinion is when I say something like "I think ATI cards are better in the long run", not "we had a better experience" because most people don't even know what constitutes a better experience when it comes to graphics cards and how they impact your system.
    
    How the cards truly tend to differ is like this: Nvidia's cards do better under low performance strain, ATI's perform about the same across all performance strain; thus allowing ATI to do better at high resolution and Nvidia to do better at low resolution. That is, of course, until recently with the 4800 series where ATI crushes both ends.
    [ link to this | view in chronology ]
    - Paul, 17 Jul 2008 @ 10:10am
      
      Re: Re: Re: FYI
      Matt said: "interesting; I am in the reverse scenario: I want ATI for desktop, Nvidia for mobile. This makes it sound like your point is valid, however, it is not.
      
      Its not a personal experience at all. What generation of card you and I used, and driver support for that generation and what games came out and what processor you used with the graphics card all come into play whether one card or the other was a better experience. There are sites that do performance testing and they will show you which card does better in what scenarios, etc. Personal opinion is when I say something like "I think ATI cards are better in the long run", not "we had a better experience" because most people don't even know what constitutes a better experience when it comes to graphics cards and how they impact your system."
      
      I've used and installed close to a hundred different cards in my PCs and in my line of business. For some site to do performance testing claiming one card is better than another is not accurate. No-one will have the same situation as you do personally. When you take in all the different hardware configurations (more than several billion with different MOBOs, RAM, CPUs, bus types, etc.) and all the different software configurations (more than several trillions with different OSs, retail, OEM, shareware, spyware, etc.) you really just need to try different boards and manufacturers to find the BEST for you.
      Sure the testers have optimum test machines to get their results but who plays games with just a fresh OS and drivers? My PC has a ton of stuff on it!
      So Matt, yes it IS a personal experience!
      
      Both of these companies should be punished severely if they have colluded!
      [ link to this | view in chronology ]
Huh?, 17 Jul 2008 @ 5:30am

I say let them collude. That way new lower priced competitors can come in and put them both under. Idiots.
[ link to this | view in chronology ]
Overcast, 17 Jul 2008 @ 6:11am

Price Fixing does not = trade secret, lol.
[ link to this | view in chronology ]
perilisk, 17 Jul 2008 @ 6:49am

Umm... companies don't actually set the prices of their stocks, so that "damning" line doesn't really indicate price fixing of any sort. It may subtle imply they can achieve better stock prices by colluding on prices, but it's nowhere near explicit.
[ link to this | view in chronology ]
- pookemon, 17 Jul 2008 @ 7:20pm
  
  Re:
  Perilisk - companies DO set the prices of their stocks by making profit announcements. If they say "We're not going to make much profit this year" then their stock price drops. If they say "We're going to make $x this year" then it goes up if the value of x is attractive to the investors. And if they get x right - then investors have far more confidence in their ability and the stock goes higher. And the best way to get x right, is to make sure that competition doesn't drive your profit margins down.
  [ link to this | view in chronology ]
Aaron, 17 Jul 2008 @ 7:56am

depressed
This is the first time since I started using Nvidia cards, after their buy-up of VooDoo, that I am not happy with them and it's not because of a bad product. This really distresses me, especially considering the state of the market. I am all for rising stocks, but legitimatly!
[ link to this | view in chronology ]
PRMan, 17 Jul 2008 @ 7:57am

Since when?
"This court is not a wholly-owned subsidiary of your companies. I am against you hiding information from the public."

I thought the government, congress and the courts WERE wholly owned subsidiaries of Big Business™ (used with permission).
[ link to this | view in chronology ]
- DCX2, 17 Jul 2008 @ 8:30am
  
  Re: Since when?
  The executive and legislature are. Fortunately, judges need pander to no one once elected. This helps keep them more impartial (probably why Judge Vaughn Walker actually stands up to the Bush administration)
  [ link to this | view in chronology ]
Benjamin Wright, 17 Jul 2008 @ 8:21am

Smoking Gun e-mails
Vice Presidents (like this one for NVIDIA) sometimes make stupid, poorly-worded or wholly unauthorized statements in e-mail. It's a risk in the information age. I argue companies like NVIDIA can diminish this risk (albeit imperfectly) by taking proactive steps that discredit the VP from the moment he sends that e-mail. For example, the VP's e-mail could include an automatic disclaimer at the bottom that disowns any stupid or illegal things he may say. What do you think? --Ben http://hack-igations.blogspot.com/2008/05/nix-smoking-gun-e-discovery.html
[ link to this | view in chronology ]
- Anonymous Coward, 17 Jul 2008 @ 9:57am
  
  Re: Smoking Gun e-mails
  Typically disclaimers aren't worth the paper they are written on. You cannot disclaimer away an illegal action. If I send you a message about, say, a murder for hire scheme and put a disclaimer at the bottom it would hold up in court about as well as a trailer park in a tornado.
  [ link to this | view in chronology ]
Anonymous Coward, 17 Jul 2008 @ 11:06am

Evidence is a secret
I love that idea of declaring evidence of a crime to be a trade secret. I'm going to use it the next time I'm out dealing crack and the cops want to look in my trunk. The color, consistency, packaging, and handling methods of my product are a trade secret that I don't have to reveal.
[ link to this | view in chronology ]
Mark Winshel, 18 Jul 2008 @ 12:54pm

It's extremely interesting that lawyers are usually allowed to get away with the position, and including without them being both disbarred and also sent to prison, that just about anything they and/or their clients do is legal just because a lawyer came up with a "reason" declaring it "legal," and based on "reasoning" so absurd, that therefore if a high school dropout had engaged in the same type of reasoning it would have caused the high school dropout to be considered severely mentally retarded, and such as for example declaring that illegal collusion does not have to be disclosed since a crooked lawyer took the position that it is to be treated as a protected trade secret.
[ link to this | view in chronology ]