Nvidia plays hardball with 3D card pricing

Flexing its muscle at online retailers.

(Credit: Nvidia)

If you've gone video card shopping online lately, you may have noticed that you certain retailers are now asking you to click through to your shopping cart to see a price for Nvidia-based 3D graphics cards. As H Enthusiast reported earlier this week, that newly inconvenient shopping experience is part of a calculated effort by Nvidia to regulate the advertised pricing of its 3D cards.

The gist is that Nvidia is conducting a test run of this pricing scheme, and if online retailers like NewEgg, Buy.com, and others don't comply, they will face a series of penalties, and ultimately they will be cut-off from Nvidia-based 3D cards after a certain number of infractions. This strategy, called Manufacturer Advertised Pricing, is not exactly price-fixing, but it's illegal in other countries, and, as H enthusiast reports, it's only recently legal in the U.S.

Compliance thus far seems spotty. Some cards listed at NewEgg obfuscate the price, others with the same chip do not. The same with TigerDirect. Amazon, Buy.com, and ZipZoomFly all list prices as normal.

Nvidia's reasons for implementing this strategy are unclear. H Enthusiast was not able to get anyone on the record, although the going theory seems to indicate that it's a way to regulate non-US certified board partners from undercutting the Nvidia-approved US competition.

With only some vendors complying with Nvidia's request, and only then partially, it seems that Nvidia's plan is only an occasional annoyance. Whether Nvidia makes the plan permanent, cracks down on stray listings, and forces other retailers to go along all remain to be seen.

[sjsilverman]

Minimum Advertised Pricing has always been legal. What was per se illegal, until a relatively recent supreme court decision, was vertical price fixing -- that is agreements between manufacturers and retailers about pricing. The Supreme Court has not given a blanket green light to agreements about price, but has now said that they will be evaluated on a case by case basis to determine their effects on competition.