Originally Posted by http://blog.wired.com/business/2006/12/in_the_span_of_.html

Friday, 1 December 2006
Ominous tea leaves in AMD, Nvidia subpoenas


In the span of less than 24 hours Advanced Micro Devices (which completed its acquisition of ATI in October) and Nvidia disclosed that they received subpoenas from the antitrust division of the U.S. Department of Justice as part of an investigation into anticompetitive practices in the market for graphics chips.

Both companies said no specific allegations have been made and that they are cooperating with investigators. Nvidia spokesman Michael Hara said the subpoenas were broad and included demands for documents relating to sundry topics including prices, volume shipments, orders, customers, competitors and market studies. Intel, another big player in the graphics industry, has not received a subpoena, spokesman Chuck Mulloy said.

PR people for the company and the DOJ are saying little else, which leaves us to parse the tea leaves/ At this early stage, they are lining up in a way that looks ominous.

For one thing, the issuance of a subpoena indicates that investigators "are contemplating the possibility that it will involve criminal matters," says Mark Ostrau, a Fenwick & West partner who clerked with the DOJ's antitrust division during law school. (He's careful to note a subpoena is not a guarantee it involves a criminal investigation.) The DOJ usually issues what are known as civil investigative demands when investigating civil matters.

Speculation among analysts and attorneys is that when the two major players in what's known as the discreet graphics market both get subpoenas they are likely to involve suspected price fixing. And sure enough, they come on the heels of price-fixing scandal in the industry for market for dynamic random access memory that has resulted in charges against four companies and 17 executives, prison sentences and fines of more than $730 million.

Nvidia said the subpoenas were issued by the antitrust division's San Francisco office, which was also responsible for the DRAM prosecution.

So far no word of AMD or Nvidia partners being approached by investigators, a move that is typical in large-scale investigations. If anyone is aware of such requests, please email me.