Another short primer on antitrust.
ATI is accused (not yet by the government which is just investigating) of illegal "collusive" conduct. In this case that would be conspiring with nVidia to set pricing on video cards.
First off all the Intellibee morons can stop with the Intel didn't but AMD did violate antitrust laws. AMD has owned ATI for about 15 minutes so unless somebody has evidence that they worked a deal with nVidia since then (a period when nVidia is kicking AMD/ATI's ass by the way) AMD is as much victim as anybody (maybe more I'll get to that).
Just as many of the AMD allegations about Intel behavior are about per se violations of the antitrust code, it is illegal on its face for two companies with a substantial share of the market to agree to some particular pricing schedule in order to increase their joint profits. Any direct evidence of such discussions would be prima facie evidence of violation. In the absence of direct evidence (notes, emails, tape recordings etc.) that top people at ATI and nVidia explicitly agreed to a certain pricing regime, this case ain't going anywhere. Just as Intel could take advantage of their market dominance to charge $4000 for a Xeon processor, there is no limitation on ATI and nVidia charging whatever prices the market will bear - as long as they have not negotiated an agreement between them not to undercut one another.
Circumstantial evidence is against this case. While the discrete graphics market is down to ATI/AMD and nVidia now, it held many players just a few years ago, it is hard to understand how they were all driven out of the business while ATI and nVidia were conspiring to keep prices artificially high. Moreover Intel remains the largest seller of graphics processors, and it is hard to argue that they (or indeed anybody else) face substantial barriers to entry in this market (ATI and nVidia use contract fabs, several companies have the necessary IP portfolios to (legally) compete), so one needs to explain why artificially high prices haven't induced new entrants, but rather the reverse.
Finally about AMD. If ATI and nVidia were conspiring to keep prices high AMD lost twice. First, to the extent that high graphics costs held down demand for computers generally and processors specifically, AMD lost some revenue. Essentially ATI and nVidia were gaining a larger share of the total computer revenue market (especially high end gaming machines) at the expense of everyone else (component suppliers, OEMS and consumers). Second if ATI profits in the years preceding the purchase were inflated by illegal collusion, AMD paid too much for ATI (unless they knew about the arrangement).
I haven't researched and don't know how the courts would respond to the fact that ATI has been acquired after the alleged collusion occurred. Unless there is evidence that AMD and nVidia explicitly agreed to continue the illegal pricing regime, there is no evidence of ongoing behavior which requires a remedy. The financial beneficiaries of the behavior would be the shareholders of ATI, not the shareholders of AMD prior or post the merger) I assume that AMD remains liable for civil and criminal(unlikely) damages but again these would be hard to calculate and diffuse except for OEMs who presumably want to maintain a working relationship with AMD.
Which leads to where is this coming from? I have a theory that Intel wants to harrass AMD a bit a tit for tat, and also wants to disrupt the AMD nVidia relationship. My guess is they are pulling the strings behind this, that there is no real evidence of collusion (even if it happened it would be really dumb to leave fingerprints) and that Intel is hoping the scrutiny will limit AMD and nVidia's ability to work cooperatively on chipsets in the future.
E |
