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The U.S. DoJ probes graphics makers for antitrust violations

Both AMD and NVIDIA have received subpoenas from the U.S. Department of Justice Antitrust Division in connection with the DOJ’s investigation into potential antitrust violations related to graphics processors and cards. The root of the AMD subpoena is its recent acquisition of ATI Technologies last month, which was approved according to Canadian antitrust laws.


The DOJ has not made any specific allegations against AMD, ATI, or NVIDIA. Both AMD and NVIDIA said that they intend to cooperate with the DOJ in its investigations.


Together, AMD and NVIDIA hold just over half of the entire graphics market, each with about an equal share. Following the news, NVIDIA shares fell 3.6 percent on Nasdaq trade, while AMD shares fell 2.1 percent on the New York Stock Exchange.

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RE: Seriously?
By Chadder007 on 12/1/2006 2:29:47 PM , Rating: 2
So they are possibly going after Video Card makers for Price Fixing???....but not the Oil Companies in the US? Instead they went after Oil companies for "Price Gouging" to which they knew they wouldn't be found guilty of.

Also doesn't Intel have a very large part of the integrated video market?...maybe even more so than both NVidia or AMD?

RE: Seriously?
By patentman on 12/1/2006 2:36:26 PM , Rating: 3
OIl companies were not price gouging, because there is no such thing as price gouging. The fact of the matter is that people can set what ever price they want for a product, but the maximum price they will set is the price the market will bear. Oil cos in the U.S. charged a lot for oil because supply was relatively tight, cost per barrel was up, and people still bought their product.

As for this AMD/ATI/Nvidia thing, the market share aspect of things really doens't seem to have any relavence in this case. Certainly the DOJ would not be going after them for monopoly with only 25% market share each. Another poster was likel right that they are going after something price fixing. Horizontal minimum price fixing is a per se violation of the antitrust laws.

RE: Seriously?
By camped69 on 12/1/2006 3:37:54 PM , Rating: 2
That is crap. What the market will bear is how it's supposed to work. The US is so dependant upon oil that they could charge 10 dollars a gallon and to keep the country running we would have to pay it. The only reason they don't is because it would be extremely evident that they were screwing us. To many it is already obvious what Bush and his buddies from the oil companies are/have been doing. To increase prices due to a "possible" shortage, give me a break. Not to mention the fact that there is no proof that oil does not renew itself. Artificial supply problem. The sooner the human race moves away from fossil fuels the better. Only then will the mega rich be irrelevant and without power as they were before the industial revolution.

RE: Seriously?
By Sunrise089 on 12/1/06, Rating: 0
RE: Seriously?
By duzytata on 12/1/2006 4:57:20 PM , Rating: 2
Actually from 2003 to 2006 Oil Companies profits rose 52%, and that's not including the record breaking profits they posted through out 2006. So that extra $1.50 a gallon would have helped with a lot of problems in my life.

RE: Seriously?
By othercents on 12/1/2006 6:52:00 PM , Rating: 3
That link is Earnings Increase. While they earned more the price per barrel is also higher. The increase should be an equivalently percentage increase compared to the cost per barrel. Even though I believe that oil prices are high they can show the DOJ why their prices are high.

AMD/ATI and NVIDIA can not show why their prices are higher than Intel. This is probably why there is a probe into price fixing. However most technically savvy people understand that GPUs are more complex than CPUs and the high end GPUs should at least cost as much or more than high end CPUs.


RE: Seriously?
By redbone75 on 12/2/2006 7:33:22 AM , Rating: 3
However most technically savvy people understand that GPUs are more complex than CPUs and the high end GPUs should at least cost as much or more than high end CPUs.

Maybe that's how AMD and Nvidia can show the government why their prices are so much higher than Intel's, because Intel doesn't make discrete graphics solutions. I mean, R&D costs money, doesn't it. However, being a consumer, I never felt that $600 for a graphics card was ever justified. If it were absolutely necessary for them to charge that much for a graphics card at initial launch, I would think that they wouldn't really be able to afford releasing a new product as often as they do, at least not until they recoup the costs of development, and I don't see that happening in what, 6 months?

RE: Seriously?
By Sunrise089 on 12/2/2006 1:58:00 PM , Rating: 2
How hard is it for people to try to understand numbers before making a post. If I sell a product for $11 and it costs me $5 to buy it and then $5 to do business (pay my employees, advertise, research new products for the future), my profit margin is 10%. If I raise my price to $12 the next year, that year my profits will have risin 100%. That does not meen I'm making a profit of 100% on the product. I'm actually making a profit of 20%, and that's basically all I can reduce my prices by and not operate at a loss.

Now, let's say I decide I'm going to set my price at a 10% margin on my actual total cost, rather than just deciding to add the dollar to two dollars or whatever. So when my cost is $10, as above, I charge $11. But now say my supplier raises her price to $15, and I still have my $5 additional cost, now I sell my product at $22, and once again show a 100% increase in profits, although I'm making the exact same on each dollar I myself spent. That's the situation the oil companies find themselves in.

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