Justice Dept. closes antitrust probe of ATI, Nvidia

This post was updated at 8:40 a.m. PDT with a confirmation from Nvidia.

Advanced Micro Devices on Monday announced that the U.S. Department of Justice has closed its nearly two-year antitrust investigation into ATI Technologies, a graphics chip company it acquired shortly before the investigation began.

The Justice Department has decided not to take action against the company regarding ATI's pricing and marketing practices.

In December 2006, antitrust regulators began to investigate ATI and Nvidia, the two largest add-in graphics technology players, for possible antitrust violations within the graphics processing unit and cards industry. AMD acquired ATI for $5.4 billion in October 2006, and within weeks of that merger closing, Nvidia debuted its GeForce 8800 graphics card.

At the time, one industry analyst noted that because ATI and Nvidia were the two main players in the graphics chip market, the pricing was often similar for products of theirs offering comparable performance.

Nvidia confirmed that on Friday the DOJ notified the graphics chipmaker that it had closed the investigation and no action was taken.

[The1egend]

Of course their prices were similar! You compete in price classes! If you offer a product that is 150% the speed of your competitor's why wouldn't you price it at 200% of their product? Or if your product is approximately the same as your competitor's then why wouldn't your prices be approximately the same or a little lower? People will pay premiums for premium products and they want competitive prices for products on the same level. It's just business.

[martin1248]

Your analysis is rather simplistic. Just because pricing is similar you cannot automatically conclude it is the result of open and fair competition, no matter how many exclamation marks you use. There are plenty of cases where similar pricing is indeed caused by cartels or price fixing. So I see the investigation as a good thing for consumer protection. I'd rather have them investigate and find there is nothing going on than just assume that everyone is playing by the rules as you seem to be willing to do.

[martin1248]

Doh. This reply was intended for The1egend. Too bad there is no way to edit or move/delete posts...

[Lerianis]

I agree, martin1248. There was a big thing a few years ago where prices for RAM were high, and they investigated and found that there was criminal collusion going on between the different RAM manufacturers. As to it not being the case with ATI and NVidia.....I'm pretty sure it actually IS the case that they are colluding on prices, to be honest. Otherwise, why would there only be 5-10 bucks difference between same models, same amount of memory, etc. in the graphics markets? It just doesn't make sense, one or the other developer is going to be able to undercut other with their pricing, unless there are criminal 'lowest price' things going on.