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NVIDIA and ATI would each pay $850,000 to settle price fixing allegations

NVIDIA has offered to settle some of the pending lawsuits against it out of court. The suits in question that NVIDIA is trying to settle stem from allegations of price fixing in the GPU market.

NVIDIA filed an 8-K form that outlines the settlement offer to close the litigation against it out of court. The agreement to settle claims from the class action suit that alleged NVIDIA and ATI conspired to fix pricing for their respective GPUs to inflate and stabilize GPU prices. Settlement of the claims will have NVIDIA paying $850,000 into a fund for the class with ATI/AMD providing a matching $850,000 contribution.

While NVIDIA filed the 8-K form outlining and making its intent to settle the claims public, no official statement has come from AMD on the proposed settlement. Courts still need to approve the class action suit before the case is over. The settlement with the class waiting for approval by the courts does not obligate NVIDIA to pay for the plaintiffs’ attorney fees, costs, or any other payments besides the $850,000.

NVIDIA also offered to settle a suit brought by plaintiffs for $112,500. Settlement with the plaintiffs needs no approval by the courts. In exchange for the $112,500 settlement, all claims and appeals related to the plaintiffs denied class action status would be dropped.

NVIDIA said in the K-8 filing that the $112,500 is "in exchange for a dismissal of all claims and appeals related to the Action raised by the individual indirect purchaser plaintiffs. This settlement is not subject to the approval of the District Court. Pursuant to the settlement, the individual indirect purchaser plaintiffs in the Action have dismissed their claims and withdrawn their appeal of the class certification ruling."

The out of court settlement, if accepted by the courts, would get NVIDIA and ATI off the hook without having to be found innocent or guilty in a court of law.

The original suit was filed against NVIDIA along with several other suits for a total of 51 pending lawsuits in May of 2007. This year NVIDIA is in even hotter water than its price fixing allegations over its failing notebook GPUs.

NVIDIA is currently fighting a pair of class action lawsuits over defective GPUs in notebook computers. The core of the suit alleges that NVIDIA knew about the defective GPUs in November, 2007 and the potential costs to it to repair or replace effected notebook computers and failed to tell its investors. Both suits seek financial compensation for investors who purchased stock in NVIDIA between November 8, 2007 and July 2, 2008.

NVIDIA maintains that as soon as it knew there was a potential issue with the GPUs failing at a higher than average rate, it notified investors and put a plan into place to repair or replace the GPUs. The cost of the repair and replacement program is the main factor that drove NVIDIA to its first quarter in the red in a long time.

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No Settlements!
By iFX on 9/29/2008 1:00:26 PM , Rating: 2
Send it to trial! They are trying to weasel out!




RE: No Settlements!
By jadeskye on 9/29/2008 1:05:11 PM , Rating: 2
lol both companies are probably pulling in that kind of cash a day. drop in the ocean.


RE: No Settlements!
By vbNetGuy on 9/29/08, Rating: 0
RE: No Settlements!
By sprockkets on 9/29/2008 1:28:28 PM , Rating: 2
It's kinda hard to put a price tag on it. It probably took them both many millions of dollars to engineer their products, but each gpu only costs around a few bucks to manufacture. Don't forget driver engineering and testing.

I mean, c'mon, if you want to sue someone over price fixing, do it to OPEC; they intentionally do it all the time.


RE: No Settlements!
By swizeus on 9/29/2008 2:07:40 PM , Rating: 2
there are limits to what you can do though


RE: No Settlements!
By theapparition on 9/29/2008 3:15:31 PM , Rating: 4
For the record, OPEC does not set prices. Oil is sold as a commodity through traders, much like frozen concetrated orange juice :-) (+1 if you get the reference). Capitolism at it's finest.

Opec does however set quotas for quantity.....which was summarily broken by Saudi Arabia a week ago by refusing to limit production. OPEC has pretty much been rendered useless, for the time being.


RE: No Settlements!
By Oregonian2 on 9/29/2008 3:39:22 PM , Rating: 4
quote:
OPEC has pretty much been rendered useless, for the time being.


Don't think this is true at all. The quotas they set are like speed limits on highways. Limits may not be observed by many, but it does have the intended effect, more or less. If the limit is raised or lowered, the overall effect occurs even if not at the theoretical production (or speed) point.


RE: No Settlements!
By TheFace on 9/29/2008 3:51:31 PM , Rating: 2
Billy Ray Valentine would be proud. But OPEC is still a force to be reckoned with, and they do, in effect, set prices. No they don't have direct control over them, but they do have most of the product in their lands, which means they control what is done with it, and how much of it goes out to the rest of the world at any given time. They are a cartel, which is illegal by U.S. law, but you won't see any President or lawmaker complaining about it.
Whatever happened to Duke & Duke? I'll bet you $1 they went under in this current economic crisis. I mean they couldn't have seen this one coming...


RE: No Settlements!
By foolsgambit11 on 9/29/2008 4:03:10 PM , Rating: 2
On the other hand, their executives weren't too frivolous - I mean, they only gambled a dollar....


RE: No Settlements!
By Regs on 9/30/2008 8:52:25 AM , Rating: 3
If they control and manipulate the supply, they control the price. End of story.


RE: No Settlements!
By NateSLC on 9/29/2008 6:22:29 PM , Rating: 1
That would be from the movie Trading Spaces when they were explaining the stock market to Eddie Murphy.


RE: No Settlements!
By PhoenixKnight on 9/29/2008 6:46:28 PM , Rating: 3
I don't mean to nitpick, but the movie is Trading Places. Trading Spaces is the tv show on TLC where 2 sets of neighbors trade houses for 2 days and redecorate one room. Unless there was an episode with Dan Akroyd and Eddie Murphy that I missed and they were talking about the stock market for some reason. Actually, that would be pretty interesting.


RE: No Settlements!
By NateSLC on 9/29/2008 7:28:11 PM , Rating: 2
True true.. :) I must have home improvement on the brain. Thanks for the correction.


RE: No Settlements!
By Oregonian2 on 9/29/2008 3:40:47 PM , Rating: 1
quote:
Exactly, 850,000 is nothing compared to what they gained. If they sold their 300$ GPU's for 600$, and 10,000 people bought them, they would have made an additional 3,000,000$. So a fraction of that for a settlement is nothing.


This must be why ATI is just rolling in cash, not knowing what to do with it all!

Right?


RE: No Settlements!
By afkrotch on 10/1/2008 2:24:31 AM , Rating: 2
quote:
Exactly, 850,000 is nothing compared to what they gained. If they sold their 300$ GPU's for 600$, and 10,000 people bought them, they would have made an additional 3,000,000$. So a fraction of that for a settlement is nothing.

These numbers are just a guess, and I'd be guessing their is a lot more than 10,000 people that overpaid.


And what happens if they aren't guilty of anything? What if there were absolutely no price fixing? Then they'd lose money. It's a lose lose situation for Nvidia/ATI and maybe Nvidia just didn't want to go down the route of months/years of being in court, for allegations that might not be true.


RE: No Settlements!
By Chadder007 on 9/29/2008 1:10:06 PM , Rating: 2
And who is getting the settlement money? The lawyers and the government??
What about the people who bought the cards and paid the inflated prices?


RE: No Settlements!
By jajig on 9/29/2008 1:34:47 PM , Rating: 2
The lawyers get the money from the settlement and the people who bought the cards get to pay the lawyers fees on top of that.


RE: No Settlements!
By gamerk2 on 9/30/2008 8:06:43 AM , Rating: 3
I want to know what cards were overpriced when they first came out.

ATI has always had great mid end cards ($150 for a 4500? What a deal).
On the NVIDIA side, the only cards which were overpriced in comparision to their performance were the 200 series, and those took a major hit in sales the minute the 4000 series came out.

Anyone who buys any tech prior to the first price drop (2 weeks later) deserves to overpay.

"Everything is worth what his purchaser will pay for it."
~Adam Smith, The Wealth of Nations 1776


RE: No Settlements!
By 325hhee on 9/30/2008 11:09:29 AM , Rating: 2
quote:
I want to know what cards were overpriced when they first came out.


8800 Ultra? I think it was released at $700 or so? I just remember it was something insane. And this year, their top of the line card, the GTX280, I think that was the card, it dropped $100 within 1 week, after the numbers came in for the ATI 4870s, they had two price drops within 2-3days of each other.


RE: No Settlements!
By afkrotch on 9/30/2008 3:16:10 PM , Rating: 2
The reason why the 8800 Ultra had and maintained a high price is because they had absolutely no competition when it released. The GTX280 on the other hand has to fend off the 4870 with lower prices, as they are pretty much on par with each other.


RE: No Settlements!
By 325hhee on 9/30/2008 4:15:02 PM , Rating: 2
quote:
The reason why the 8800 Ultra had and maintained a high price is because they had absolutely no competition when it released. The GTX280 on the other hand has to fend off the 4870 with lower prices, as they are pretty much on par with each other.


Exactly, they were milking the crap out of the Ultra, and scary part is some people SLI that card. It's scary thought to me that some people have money to burn like that, $1400 for a pair of vid cards.

The last time I did something insane like that was a decade ago where I had the Matrox G400 with the 8 meg upgrade, giving me a whopping 16 megs of ram and a pair of Voodoo 2s. I spent around $500 - $600 for that set up. And the next year the Voodoo 3 came out for only about $150 and destroyed my system on 3D, but still laggy on 2D.

I learned my lesson back then.


RE: No Settlements!
By crystal clear on 9/30/2008 8:48:04 AM , Rating: 2
quote:
What about the people who bought the cards and paid the inflated prices


Yes you are right in asking this question.- all D.T. commentators should be focused on this point.

Set aside that fanboyism & all the thrash comments/responses
that you read here.

Focus on the above question & give your responses.


RE: No Settlements!
By therealnickdanger on 9/29/2008 2:34:59 PM , Rating: 3
Yeah, send it trial! Increase lawyer fees! Decrease money spent on R&D! Yeah! Because we really need a third batch of 8800 SKUs!


RE: No Settlements!
By vhx on 9/29/2008 5:50:42 PM , Rating: 3
Don't send it to trial, don't hold them accountable for bad and illegal practices, I just want my new video cards! How petty of you.


RE: No Settlements!
By therealnickdanger on 9/29/2008 7:18:13 PM , Rating: 2
Petty? Nah... New videocards for better/faster folding for improved life for everyone!


RE: No Settlements!
By BruceLeet on 9/29/2008 7:40:08 PM , Rating: 2
I think you mean 6th batch


RE: No Settlements!
By cheetah2k on 9/30/2008 1:25:54 AM , Rating: 2
The 8800's were great GPU's in their "hay day".

I think theres a lot of us out there with some sort of 8800, and I still have a pair of XFX 8800GTX's in SLi. While I dont play Crysis, they still generate enough FPS in other games (BF2, BF2142, etc) to keep me happy.

I just feel for those with the overheating failure issues that plagued a lot of 8800 series desktop video cards and laptops. Nvidia needs to be royally spanked for that!.


RE: No Settlements!
By omnicronx on 9/29/2008 2:50:21 PM , Rating: 4
From the tiny settlement they are willing to pay out, chances are Nvidia/ATI think that the plaintiffs have no case.. It would probably cost them more to go to trial, than the settlement fees they are willing to pay out.


"ONLY IN AMERICA !"
By Oralen on 9/29/2008 1:20:35 PM , Rating: 5
quote:
along with several other suits for a total of 51 pending lawsuits in May of 2007


I think the lawyers should drop all pretence of helping Justice and just fight it out in an arena, live on TV, gladiator-style.

The winner would get all the money, and an accolade from his "sponsors". (the corporation, or a representative of those he claims to defend...)

The loser, if he survives, could sue the hospital and the doctors who would treat him afterwards. (for a re-match...)

And the customers... Would pay and get screwed, as usual.

But at least... We could enjoy a good show.

"To the death!"




RE: "ONLY IN AMERICA !"
By Aquila76 on 9/29/2008 10:47:19 PM , Rating: 2
No! To the PAIN!


RE: "ONLY IN AMERICA !"
By Regs on 9/30/2008 9:08:23 AM , Rating: 2
I'm sure there is some hot shot college professor out there making his students try to think of a better way to change the legal system. You can't, it's not going to get better.

I would stand up and tell Mr.Professor that it's not the system that is the problem, it's the people who govern it. Of course he'll likely fail me for taking the easy way out of writing 30 pages of BS...

These judges up on their podium should stand up, lift up their gown, and show some of these lawyers what god gave them. Then proceed to blow their nose on the case papers and tell the to shove it up their butts (Figuratively speaking of course). These cases should not make it to trial and the defendants shouldn't have to settle to avoid costly court proceedings. If I really wanted to change the system, I would charge the defendants nothing and make the prosecution pay out for everything. The burdon of proof does not mean crap anymore.


How Ironic
By BansheeX on 9/29/2008 1:38:06 PM , Rating: 2
The government allows the banking industry to price fix interest rates, and unions labor. Trying to artificially suppress a price causes shortages, and raising it creates unused excesses. Time to stop being selective, or shall we just call ourselves the USSA?




RE: How Ironic
Can AMD afford 850K
By toyotabedzrock on 9/29/2008 5:07:55 PM , Rating: 2
Are they trying to hurt ATI/AMD? It seems they haven't discussed this offer with AMD, and that they are trying to pressure them into settling as well.




RE: Can AMD afford 850K
By Aloonatic on 9/29/2008 5:59:54 PM , Rating: 2
Just another $850K to be added to the already well endowed losses column on ATI/AMDs balance sheet, they probably wouldn't notice it.


How do I join the class?
By the goat on 9/30/2008 7:37:21 AM , Rating: 2
How do i join this class action group? I have purchased many nvidia GPU's over the years. I want my $0.75 back.

On that point. Why don't class action settlements ever generate anything significant for the class?




RE: How do I join the class?
By afkrotch on 10/1/2008 2:29:18 AM , Rating: 2
It generates significant income for lawyers and significant loss of work for those in the class action lawsuit.


By crystal clear on 9/30/2008 11:55:26 AM , Rating: 2
quote:
NVIDIA has offered to settle some of the pending lawsuits against it out of court.


Note this-

The Agreement calls for NVIDIA to pay $850,000 into a $1.7 million fund to be made available for payments to the certified class.

So AMD will also pay out its share of the $1.7 million fund

To summarize it all-

"Courts still need to approve the class action suit before the case is over".

The very fact they offer to settle that means allegations of price fixing in the GPU market are in fact TRUE.

In short Nvidia pays out $850,000 + $112,500 in settlement at the moment.

The plaintiffs lawyers (be sure) will definitely get their full fees & in no way be left out of any settlement deal.

The very fact Nvidia offers to settle will encourage many more lawsuits of similar nature from others,who will jump into the fire sale of settlements-from 51 lawsuits the number could jump to hundreds.

Now its the USA then the E.U. then Japan & S Korea etc etc

You cant stop it, it spreads like wild fire......

Nvidia has now in hand besides price fixing those defective GPUs plus those shareholder cases add to this those dwindling sales...

Nvidia can collapse under such conditions plus given the current financial crisis in the USA & the spill over effect over other countries,this will drive them to chapter 11 for protection ...Bankcrupsty on the way ????




By crystal clear on 9/30/2008 12:31:06 PM , Rating: 2
Here AMD's FORM 8-K

On September 16, 2008, ATI Technologies ULC (“ATI”), an indirect wholly-owned subsidiary of Advanced Micro Devices, Inc. (the “Company”), AMD US Finance, Inc., a subsidiary of the Company, and 1252986 Alberta ULC, an indirect wholly-owned subsidiary of the Company, and the Company (collectively, the “ATI Entities”), executed a settlement agreement (the “Agreement”), in connection with the consolidated action In re Graphics Processing Units Antitrust Litigation, MDL No. 1826, pending in the District Court for the Northern District of California (the “Action”). The Agreement relates to the claims of the certified class of direct purchaser plaintiffs previously approved by the District Court, which consists of purchasers who bought graphics cards directly from the websites of ATI or NVIDIA Corporation (“NVIDIA”) in the United States during the period December 4, 2002 to November 7, 2007. The Agreement calls for the ATI entities to pay $850,000 into a fund to be made available for payments to the certified class in exchange for a dismissal of all claims related to the Action. The ATI entities are not obligated under the Agreement to pay attorneys’ fees, costs, or make any other payments in connection with the settlement other than the payment of $850,000. The Agreement is subject to court approval and, if approved, would dispose of all claims raised by the certified class in the Action against the ATI Entities.

The ATI Entities have also reached a settlement agreement with the remaining individual indirect purchaser plaintiffs in the Action. On July 18, 2008, the District Court denied a motion seeking to certify a class of all indirect purchasers in the United States who purchased a product containing a graphics processing unit initially sold by the ATI Entities or NVIDIA. On September 9, 2008, the ATI Entities and NVIDIA reached a settlement agreement with the remaining individual indirect purchaser plaintiffs that provides for the ATI Entities to pay $112,500 in exchange for a dismissal of all claims and appeals related to the Action raised by the individual indirect purchaser plaintiffs. This settlement is not subject to the approval of the District Court. Pursuant to the settlement, the individual indirect purchaser plaintiffs in the Action have dismissed their claims and withdrawn their appeal.



http://secfilings.nyse.com/filing.php?doc=1&attach...


This is a joke
By BaronMatrix on 9/29/2008 1:33:38 PM , Rating: 2
But I'll gladly collect a few hundred bucks for my nVidia GPU. I guess with $1.7M, 850,000 people can get $2 each. But then most people won't file so that'll be more for me.




GPU
By chhimp on 9/29/2008 3:49:20 PM , Rating: 2
Nvidia needs to solve the notebook GPU failure issue. I just had my dell m1330 motherboard replaced because the GPU overheated. Dell did an excellent job servicing the notebook, but this will happen again when my warranty expires. In other words, they replaced the defective motherboard with another similiar board that will fail eventually. Lawsuit please!!!!




surprised
By James Wood Carter on 9/29/2008 7:58:14 PM , Rating: 2
... surprised that GPU market is still growing, i thought its about to level out and slow its growth mainly because of consumer demand issues, as well as hardware limitations. Well maybe a price fixing is indicating my presumption




Price fixing
By ICE1966 on 9/30/2008 5:32:57 PM , Rating: 2
maybe we should launch a class action against the oil companies. they price fix and gouge us all the time. It's no different




whining nVidia, greedy investors
By jmurbank on 9/29/08, Rating: 0
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer











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