Friday, March 9th 2018
NVIDIA's New GPP Program Reportedly Engages in Monopolistic Practices
A report from HardOCP's Kyle Bennet aims to shake NVIDIA's foundations, with allegations of anti-competitive business practices under its new GeForce Partner Program (GPP). In his report, which started with an AMD approach that pushed him to look a little closer into GPP, Bennet says that he has found evidence that NVIDIA's new program aims to push partners towards shunning products from other hardware manufacturers - mainly AMD, with a shoot across the bow for Intel.
After following the breadcrumb trail and speaking with NVIDIA AIBs and OEM partners ("The ones that did speak to us have done so anonymously, in fear of losing their jobs, or having retribution placed upon them or their companies by NVIDIA," Bennett says), the picture is painted of an industry behemoth that aims to abuse its currently dominant market position. NVIDIA controls around 70% of the discrete GPU market share, and its industrious size is apparently being put to use to outmuscle its competitors' offerings by, essentially, putting partners between the proverbial rock and a hard place. According to Bennet, industry players unanimously brought about three consequences from Nvidia's GPP, saying that "They think that it has terms that are likely illegal; GPP is likely going to tremendously hurt consumers' choices; It will disrupt business with the companies that they are currently doing business with, namely AMD and Intel."
The crux of the issue seems to be in that NVIDIA, while publicly touting transparency, is hiding some not so transparent clauses from the public's view. Namely, the fact that in order to become a part of NVIDIA's GPP program, partners must have its "Gaming Brand Aligned Exclusively With GeForce." Bennet says that he has read NVIDIA papers, and these very words, in internal documents meant for NVIDIA's partners only; however, none of these have been made available as of time of writing, though that may be an effort to protect sources.
But what does this "exclusivity" mean? That partners would have to forego products from other brands (case in point, AMD) in order to be granted the GeForce partner status. And what do companies who achieve GPP status receive? Well, enough that it would make competition from other NVIDIA AIBs that didn't make the partner program extremely difficult - if not unfeasible. This is because GPP-branded companies would receive perks such as: high-effort engineering engagements (likely, aids to custom designs); early tech engagement; launch partner status (as in, being able to sell GeForce-branded products at launch date); game bundling; sales rebate programs; social media and PR support; marketing reports; and the ultimate kicker, Marketing Development Funds (MDF). This last one may be known to our more attentive readers, as it was part of Intel's "Intel Inside" marketing program which spurred... a pretty incredible anti-trust movement against the company.
As a result of covering this story, HardOCP's Kyle Bennet says he expects the website to be shunned from now on when it comes to NVIDIA or NVIDIA partner graphics cards being offered for review purposes. Whether or not that will happen, I guess time will time; as time will tell whether or not there is indeed any sort of less... transparent plays taking place here.
Sources:
HardOCP, NVIDIA GeForce Partner Program
After following the breadcrumb trail and speaking with NVIDIA AIBs and OEM partners ("The ones that did speak to us have done so anonymously, in fear of losing their jobs, or having retribution placed upon them or their companies by NVIDIA," Bennett says), the picture is painted of an industry behemoth that aims to abuse its currently dominant market position. NVIDIA controls around 70% of the discrete GPU market share, and its industrious size is apparently being put to use to outmuscle its competitors' offerings by, essentially, putting partners between the proverbial rock and a hard place. According to Bennet, industry players unanimously brought about three consequences from Nvidia's GPP, saying that "They think that it has terms that are likely illegal; GPP is likely going to tremendously hurt consumers' choices; It will disrupt business with the companies that they are currently doing business with, namely AMD and Intel."
But what does this "exclusivity" mean? That partners would have to forego products from other brands (case in point, AMD) in order to be granted the GeForce partner status. And what do companies who achieve GPP status receive? Well, enough that it would make competition from other NVIDIA AIBs that didn't make the partner program extremely difficult - if not unfeasible. This is because GPP-branded companies would receive perks such as: high-effort engineering engagements (likely, aids to custom designs); early tech engagement; launch partner status (as in, being able to sell GeForce-branded products at launch date); game bundling; sales rebate programs; social media and PR support; marketing reports; and the ultimate kicker, Marketing Development Funds (MDF). This last one may be known to our more attentive readers, as it was part of Intel's "Intel Inside" marketing program which spurred... a pretty incredible anti-trust movement against the company.
As a result of covering this story, HardOCP's Kyle Bennet says he expects the website to be shunned from now on when it comes to NVIDIA or NVIDIA partner graphics cards being offered for review purposes. Whether or not that will happen, I guess time will time; as time will tell whether or not there is indeed any sort of less... transparent plays taking place here.
317 Comments on NVIDIA's New GPP Program Reportedly Engages in Monopolistic Practices
An example:
Asus is a manufacturer, but also a brand.
ROG is Asus' gaming sub-brand, but could be argued to have sufficient name recognition to be considered a brand of its own.
Ares/Mars are, at best, sub-brands of ROG, with minimal if any separate name recognition. They're barely a step above model designations. If you asked me to guess what GPU manufacturer was behind each name, I'd have no idea.
EVGA is a manufacturer and a brand, but has no "gaming" sub-brand. Then again, they're a much smaller company, and barely make non-gaming products at all.
Now, where to draw the line for what entails a reasonable understanding of this with regards to this report?
- It seems unlikely that Nvidia would require top-level brands (manufacturers' names) to be Nvidia exclusive. Not to mention that that would be blatantly anticompetitive, and hence, illegal.
- Likewise, it seems unlikely that Nvidia would care at all (or even want!) a constant, Nvidia only sub-brand below ROG. Not only does it not match the reported wording ("exclusive... gaming brand"), but it would make for god-awful product names, which Nvidia (or anyone with a marketing department) would see is a bad idea. "Asus ROG Strix GTX 1060 OC" is bad enough. "Asus ROG Mars Strix GTX 1060 OC" is... well, awful. The more sub-brands, the more confusing it all becomes and the less these actually end up meaning.
- As such, it doesn't seem unreasonable to interpret this as if Nvidia would require the ROG brand (Asus' "gaming brand") to be Nvidia exclusive. To keep selling AMD while joining the GPP, they'd need to establish a separate gaming brand, or just sell them as Asus - which of course gives Nvidia a massive PR advantage given ROG's brand recognition. The wording makes it unlikely that establishing a new gaming brand for Nvidia next to an established one (left to AMD) would fulfill this requirement, as the word "the" is consistently used rather than "a".
Asus might be an extreme case, as they're probably the biggest AIB partner out there, but would that mean that they'd get preferential/different treatment than smaller OEMs? I doubt it, as that would be a hard sell for Nvidia to the other OEMs.So, if this is true, what does it all boil down to? A dominant market leader imposing strict-seeming exclusivivity requirements on partners with the possible penalties having significant economic impacts, especially for smaller partners. That does indeed sound like anticompetitive business practices to me when put in terms that simple - but there are a lot of details and nuances here, not least in terms of how this is put into practice and enforced. I'm no legal expert either, of course. But I'd say it warrants an investigation at the very least.Wow. Seriously? Your answer is "AIB partners should unionize"? That is an absurdly naive stance. Of course Nvidia can bully them around - the vast majority of their GPU business is beholden to the whims of Nvidia. Even as a group, AIB partners have very little say if Nvidia decides to change something. Besides, this is why we have laws and regulations, so that the responsibility of maintaining a somewhat fair society doesn't fall om individuals and minor actors.Sorry, but how exactly do you think the status quo is? You realise that the incentives and monetary support mentioned here already exists, right? Nvidia already pays out large sums to help partners with advertising. Do you believe Asus alone pays for all those Asus ROG GeForce gaming laptop ads? If so, you're sorely mistaken. And this, of course, flips the script entirely. Nvidia isn't saying "join the GPP and get more", it's saying "unless you restructure and give us favorable branding, we'll stop paying you." Which, of course, is the kind of thing that drives investors and board members to the verge of hysterical fits in fear of projected profits dropping. Which, again, is why this thing has power.
Of course, should this prove to be true, it really shouldn't surprise anyone. It's the nature of profit-oriented business, particularly publicly traded business, to seek the maximization of profits to the highest degree possible. Of course that entails pushing the limits of the law - especially when they can reap the benefits of said practices while under investigation or on trial (or during appeals, and so on...). In the end, they gain more than they stand to lose. AMD would probably do similar things if they were in a dominant market position. It's the name of the game, and the entire reason why "the free market" is a wildly misleading term - free(dom) implies equality and fairness, to which deregulation and "free competition" (i.e. "do whatever you can to win") are diametrically opposed. Unregulated or underpoliced markets are unfree, fundamentally unfair markets. The hunt for ever-growing profits makes this a given.
Edit: corrected GPU to GPP. That's what I get for typing on my phone, I guess.
www.techpowerup.com/reviews/MSI/GTX_580_Lightning_Extreme_Edition/27.html
www.techpowerup.com/reviews/MSI/GTX_680_Lightning/28.html
www.techpowerup.com/reviews/KFA2/GTX_680_Limited_OC/28.html
There you go. As for Nvidia's supposed practices, there's not much to talk about unless someone posted concrete evidence I missed.
Kind-of, never had respect for [H] or Kyle, but if he keeps the heat on this and investigating, this I might have a change in my opinion and perspective of their past ways of reporting and testing.
And yes this doesn't in theory "lock" an OEM/AIB out of selling AMD stuff, it just may polarize more AIB's into a particular camp.
Interestingly there was that news Asrock was talking about building/supplying AMD cards. Perhaps AMD got wind of some OEM/Contact manufacture is signed to this "GeForce Partner Program (GPP)" and came along and said well we're suspending/not reissuing the contact as your volume has been down and brands under-preform.
Business can be a fickle mistress!
But when the guy deactivates you from [H] forms for pointing out changes to methods, games, use of older drivers etc. Technically we should be able to ask for clarification of the data collection in any means testing if not above reproach. I can have change it's what thinking people are made to do... evolve.
"The crux of the issue with NVIDIA GPP comes down to a single requirement in order to be part of GPP. In order to have access to the GPP program, its partners must have its "Gaming Brand Aligned Exclusively With GeForce." I have read documents with this requirement spelled out on it."
Gaming brand exclusive to geforce.
And, "what's not explicitly forbidden is to be interpreted in favor of the party that didn't draft the document" - says who? I'm pretty sure Nvidia isn't saying that. Market regulators? Common sense? You're going to have to be more clear than that.Sorry, I don't quite get your meaning here. You mean 'subscribe' as in getting a paid subscription to a site (or giving other monetary support)? If there was a print magazine quality tech publication that could be relied on to provide serious investigative journalism and balanced reviews, I'd definitely consider that once I'm in a more comfortable financial situation than I am now. Working part-time does that to you. Then again, it's not like I'm supporting low-quality sites financially either. This is a general issue with web-based journalism, regardless of its subject.
Then again, I love your use of obvious and cliched distraction techniques here. Let's change the subject from 'quality investigative journalism' to 'whether I'm a hypocrite through not paying for news', no? That's a real productive subject for discussion. Not to mention individualizing blame for larger societal issues, such as funding journalism. I see your 'bullshit attempt at derailing the discussion', and raise you a 'let's stick to the topic, please'.
kyle is ok when he reviews and shows mods and stuff but he sucks at investigative journalism.
he don't know how to play that game.
I just cant understand how he goes onto say that nv wants to take over the gaming sector form these aibs.
but then he goes on to say later about steam (unrelated) but its ok for them to own our games?
have you gotten a game lately for pc that lets you boot from the box?
but that's ok?
many things are unjust in this world for gamers gpp is not one of them
if it hurts one of his friends at where ever(maybe at the amd gaming of one of the big 3?) then sorry for him
but as it stands now you showed your hand and you don't have much at all.
Mentions when he tried to talk to anyone about GPP they wouldn't.
This is one of many instances in the latest trend from tech companies to push the boundaries of the law by blatantly breaking them. This is a very troubling trend..
but he was not "the sky is falling "unlike kyle or the shills on youtube
remember they get money for that with ads and advertising that we can't choose and they don't have a ad free channel or media.
1 of the same crappy things they claim what's so wrong with gpp
why not have gaming cards go to way of the games themselves and all that bullcrap involved with the gaming industry...we have a lot of restrictions when how and where we can play the game right?
no one stopped ngreeda on the way to the top,as a matter of fact amd basically did nothing to protect the market share
its your chance now brainiacks you can be the new number 2 gpu maker(that's for you intel just buy them already)
like I said put up or shut up AT this point we can not even reseasonably find arguments.