NVIDIA Facing 51 Pending Lawsuits

NVIDIA under fire for anti-competitive and price fixing business practices

Analysts expect a stormy summer as NVIDIA faces not one, but fifty-one pending lawsuits. The 51 civil complaints filed against NVIDIA claim that the company participated in anti-competitive business agreements and price fixing strategies. Some of these civil suits allege that NVIDIA entered into these agreements with graphics rival AMD.

In March 2007, 42 civil suits were filed against NVIDIA for anti-competitive business practices; 14 of those suits alleged that the company colluded with AMD to fix prices. According to NVIDIA, most of the suits were filed in the Northern District of California. NVIDIA states that while there appear to be many civil suits, all of the suits are putative class-actions, indicating that they are from direct or indirect purchasers of NVIDIA graphics products.

Price fixing occurs when a company enters an agreement with its competitor to set a minimum selling price for a particular product or family of products. In this case, many of the suits allege that AMD (then ATI) and NVIDIA artificially inflated the value of high-end and enthusiast components.

Currently there is roughly an even-split in market share between AMD and NVIDIA, with NVIDIA holding 28.5% of the graphics market and AMD picking up another 23%. AMD saw the biggest loss last year with the introduction of NVIDIA's G80-family GPUs -- the company's high-end GPU.

Late last year AMD and NVIDIA received subpoenas from the U.S. Department of Justice alleging that both companies violated antitrust laws. The suit was sparked after AMD's acquisition of ATI was approved; leading to the belief that NVIDIA had somehow cooperated with AMD in regards to the acquisition. The fact that AMD and NVIDIA are long time partners also sparked debate but the U.S. Department of Justice did not reveal any specific allegations against AMD, ATI or NVIDIA.

Along with the U.S. Department of Justice, Intel also issued subpoenas against AMD and ATI, requesting that all documents related to the AMD-ATI merger be reviewed. Intel, also under anti-trust litigation with AMD, was unsuccessful in lobbying for further sanctions. AMD successfully absorbed ATI last year.

AMD senior executives indicated last year that even with ATI under its wing, it will still be cooperating, while simultaneously competing, with NVIDIA for the foreseeable future.
Reference:Tuan Nguyen ,dailytech