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
wantdemand that, they demand that AIB partners bar AMD from their established gaming brands (which, like ROG, carry a heck of a lot of brand value and consumer goodwill), and if AIB partners don't comply, they'll withhold early access to parts (launch partner status), engineering support and financial support in terms of advertising - all of which they're already getting, without these new demands. In other words, Nvidia is (alleged to be) saying "If you want to maintain the status quo, kick AMD out of your best gaming brand." How is that not anticompetive, when the company saying it has a market share of >70%?GPP says there has to be a gaming line exclusively dedicated to Nvidia.
And if Asus can do "ROG Green" (Nvidia) and "ROG Red" (AMD), I believe everyone will be happy. I'm not 100% sure that will be possible, but from what I have understood from GPP, it will be.
More to the point, I don't expect unlawful clauses to be written as such directly into GPP (it would make it far too easy to shoot it down in the court). So inserting quotes from the GPP won't shed much light on the subject atm. We need on the record input from more parties involved, imho. Until then, we're just pretending to be in the know.
not saying true or not(as for any anti consumerism) but I have my rags soaked in lamp oil, sticks and the pitch forks ready
-Are they allowed to use similar names (Like say ROG STRIX even with an additional word at the end like green or red)
-Will the cooler have to be different and if so how much?
-Will colors be a part of this (Doubtful one as I find that a bit extreme but you never know)
A lot of this sounds like it is up to Nvidia's discretion which I think is a bit of a problem. Mostly because that can be as easy as just a slight name adjustment to crazy demands about design and color.Now the question is does this violate anti-trust laws... Even if people find it unethical that does not matter in the long run compared to the law. In some ways I am leaning towards "It crossed the line" because it was so secretive and no one wants to talk about it. However, Nvidia is not stupid and would not do something without consulting its lawyers first (Then again I could have said the same about Intel in this regard).
Either way, this is going to be interesting.
So the answers to your questions would be yes, no and no. But it all depends on what other pressure Nvidia will put on manufacturers and of that we know next to nothing atm.
Think about this: if you were Nvidia and investing money in promoting brands, would you pay to promote ROG if ROG was made up of both Nvidia and AMD products? I'm sure Nvidia didn't come up with GPP out of goodness of their hearts, but at the same time I realize there can be legit reasoning behind those clauses.
I agree with your sentiment. Right now, NVidia is so far ahead in performance that it doesn't make any sense for uneducated consumers to see the same branding for such different performance levels. Hey, my RoG isn't performing as well as your RoG! WTH! RoG is a lie!
Reference base air blowers AIB cards never make it to Gaming Brands. Asus ROG, Gigabyte Aorus, MSI Gaming, those will be "Gaming Brand". What is more likely to happen is those current Non-gaming brand products get consolidated with the "Gaming Brand" with their own sub-brands or similar.
Or they simply wont sell them and Nvidia boxes them (AIBs/OEMs) out and sells more reference Founders Edition directly
Of course Nvidia isn't (even allegedly) saying "Asus can no longer sell AMD" - that would be blatantly illegal, and would be a PR disaster a lot worse than this - but the reported wording makes it quite explicit that shared branding (such as ROG) would be a no-go. You're welcome to disagree, but I expect you to be able to argue that point with regard to what's been reported, not just "all this is unconfirmed so we should just assume it's all ok."
The logical extension of this is that any AMD gaming brand from ASUS would need a name that isn't ROG - which locks AMD out from ROG's massive brand recognition and established consumer trust. Effectively, Asus AMD Gaming would be reset, starting from zero, while Asus Nvidia Gaming would keep going with current momentum at the very least. Is that anticompetitive? I'd say yes.
These are publicly traded for-profit companies in a multi-billion dollar industry with enormous R&D costs, multi-year development cycles, short product lifespans and tight profit margins. Of course they have incentives to push the boundaries of legality in order to maximize profits. That's almost a given. We have no reason to assume any big tech company (or really any other big company) wants anything more than our money. They are definitely not consumers' friends. I'd rather be a pessimist here and have the occasional happy surprise, rather than be constantly put down by all the shirt things these companies do.
While unconfirmed reports from off-the-record sources should always be taken with a pinch of salt, this is exactly the type of situation where no-one would be able to go on the record, as they'd no doubt lose their jobs. That Kyle had the story corroborated from various sources at different companies is about as much as we can expect. Nvidia's non-reply to this can also be read as telling: if these "unofficial" GPP clauses didn't exist, why not just say so? What do they stand to lose? Still, as with any investigative reporting we have to trust in the integrity of the journalist responsible. I'm frankly not familiar enough with Kyle or HardOCP to pass judgment on that, but as all I've ever heard is that he's been accused of pro-Nvidia bias, this doesn't exactly add up either. I'm open to this being the proverbial mountain made out of a molehill, but so far I've seen nothing to convince me that there isn't something significantly fishy going on.
I also asked the same question at [H]'s forum, but noone gave me a logical answer!! :shadedshu::(