News MSI Subsidiary Caught Selling RTX 30-Series GPUs at Scalper Pricing on Amazon, eBay

[Zerk2012]

I never had a problem with MSI so I will continue using their products. No their customer care is not the best but really none of them are.

You can even look at the so called great Asus. Send a board in for warranty and get the same board back not fixed or a so called referb that was not fixed.

If you stop buying from companies with bad service or use questionable tactics you would have nobody to buy from.

Edit for all we know they might of actually found a way to get the new product without the parent company knowing.

 

[agentbb007]

I wondered if this was happening. The potential profit $800 a card is very tempting for people who have access to these cards. Sounds like these companies are going to need to tighten down who has access to cards to make sure they are actually ending up on newegg or amazon for sale at MSRP.

 

[King_V]

I'm sorry but this comment is so off base. If I am reading your comment correctly, you are basically advocating for government price setting of an enthusiast PC product. Nothing MSI did here is illegal. The beauty of capitalism and a free market economy is that the consumer gets to vote with their wallet. In this case, the guy says he will still buy MSI. It's a wonderful thing that he has the freedom to make that choice. For most others (including myself) we will not be buying MSI for this and the other aforementioned reasons/scandals. This will then impact their bottom line and hopefully deter this type of behavior by them going forward. That is the beauty of the free market at work.

I have no idea where you got that. I did not at all advocate the government setting a price. Why is everything assumed to be one extreme or the other? And I am so totally pleased to see that you joined this forum just to grossly misinterpret what I said.

I don't know whether MSI was aware of what was going on or not. Maybe they were part of it, maybe the subsidiary was acting rogue.

That said, price-fixing is most certainly illegal, as are numerous other actions that could very readily be described as the natural state of a truly free-market. The so-called free-market even as the US practices it, is not, as you might suggest, meant to be a dog-eat-dog free-for-all.

If I may quote from the FTC (and let me reiterate, I don't know if what Starlit and maybe MSI as well, did, constitutes price fixing, or falls afoul of some other law, or applies to none of these)

Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. Generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor.

That's from https://www.ftc.gov/tips-advice/com...itrust-laws/dealings-competitors/price-fixing - which does go into a bit more detail than I did, but is still just a basic summary.

I don't know if this truly falls under that, but "inferred from conduct" might be a point that runs afoul of the law, as the scalpers generally seems to be charging roughly the same "premium" as it were (I discount the outliers of the troll-bots pushing scalpers auctions up to the 5-digit levels).

Ticket scalping, for example, is a chaotic mess, but some states have laws regarding that. Some just "it can't be done on the premises" whereas others, such as New York, expressly limit the scalper's profit margin to either $5 or 10%.

I should point out, however, that I am not a lawyer.


EDIT: I should point out that I think anyone would be foolish to buy an Ampere card at such inflated values. Just because I don't have any sympathy for the people who are ripped off by scalpers, ESPECIALLY those who are supposed to be acting in something of an official manner, doesn't mean I don't think what the scalpers are doing is wrong at the least, possibly legally questionable at the worst under certain conditions.

 

[mlee 2500]

Yeah, I'm sure this was a total mistake or accident. Nobody was sneaking a profit here counter to their agreements with the VAR. Even worse, MSI has such a sketchy past nobody would ever even give them the benefit of the doubt.

Was considering maybe going MSI for my 2080 a couple years back but now glad I didn't and won't in future.

 

[thepersonwithaface45]

Sells as much at whatever price as long as it's legal.

haha, well, a very large large LARGE portion of the US economy is illegal so it really is "free" in that sense.

 

[TJ Hooker]

If I may quote from the FTC (and let me reiterate, I don't know if what Starlit and maybe MSI as well, did, constitutes price fixing, or falls afoul of some other law, or applies to none of these)

Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. Generally, the antitrust laws require that each company establish prices and other terms on its own, without agreeing with a competitor.

That's from https://www.ftc.gov/tips-advice/com...itrust-laws/dealings-competitors/price-fixing - which does go into a bit more detail than I did, but is still just a basic summary.

I don't know if this truly falls under that, but "inferred from conduct" might be a point that runs afoul of the law, as the scalpers generally seems to be charging roughly the same "premium" as it were (I discount the outliers of the troll-bots pushing scalpers auctions up to the 5-digit levels).

Simply charging roughly the same price as the next guy is not price fixing. Even if there is any sort of consistent price that scalpers are selling RTX 3000 cards for as you claim, it's probably just people seeing what others are listing them for and what the ultimately end up selling for (i.e. if it gets bid up on eBay), and listing theirs accordingly. It doesn't make sense to charge significantly less because you get less money (unless you really want to make sure it gets sold quickly), and it doesn't make sense to charge significantly more because nobody would buy it (unless you're not in a rush and hope prices will rise at some point). That just becomes the market value. Implying it might be price fixing without evidence of communication between the sellers is a huge stretch.

 

[King_V]

Agreed - but I'm not clear on what the "inferred by conduct" part of the summary meant, and I don't have the legal expertise to know what that detail means.

 

[digitalgriffin]

It might fall under RICO anti racketeering act.

They offered a service (selling hard to acquire rare cards) at inflated prices through a shell company when no such service was necessary. Quite frankly msi could have sold them all close to msrp no problem. The fact a shell corporation was set up to save outrage just looks really really bad and leads to racketeering. There were no services offered here as msi controls the flow and whom the resellers are. So msi is guilty through greed or incompetence of profiteering on their own product through a perceived shortage generated in part by themsleves.

https://en.m.wikipedia.org/wiki/Racketeering

The irony is they could have avoided this mess and say "f you all. Were charging $1300 for them because we have a right to." And they do. But the fact they tried to hide it through a shell company to likely avoid wrath of others just shows how swarmy they are. And their leadership has shown they arent that smart time and time again.

Remember that guynamed Shekcel who charged a fortune for AIDS drugs that were once cheap? He claimed he had a right to. Well he's now serving prison time and barred from running a publically traded company again. What about that ceo who made mandatory epi pens so expensive. A couple thousand $ a year can easily break a family. Congress grilled the hell out of that ceo. And she was the daughter of a senator iirc.

Hording toilet paper and selling it at a profit led to serious jail time. Same for face mask.

The us gov't doesnt take kindly to people who try to take advantage of others through scrupulous means. Not that a video card is a life staple. But it will draw an eye towards their practices along with how they pay taxes

 

[Schlachtwolf]

2 options here.....

1.MSI genuinely did not know what a section of THEIR company was doing...... poor managment at many levels that no-one picked it up = poorly run outfit

2.MSI knew what was happening and thought, ah feck it sell what you can boys...... poor managment at many levels that no-one thought that was a bad idea = poorly run outfit

I just installed my Asus Crosshair x570 to prepare for the new Ryzens, so happy not an MSI right now.....

 

[Co BIY]

These resellers/scalpers/middlemen/wholesalers are not the problem. Inadequate supply is the problem.

One of the real solutions to inadequate supply is higher prices that justify increased investment. Ideally it would be Nvidia (or TSMC) collecting the profits and rolling part of it back into the production to satisfy market demand. They underpriced the cards or released them too early.

Those $10-20 billion dollar fabs have to get paid for.

The previous Nvidia strategy of Founders Edition Cards with a "early adopter" premium price made a lot of sense. The company creating the value should be trying to capture the profits. Direct sales by the card manufacturers also makes a lot of sense.

I'd rather see straight forward higher prices rather than inefficient "package deals" with motherboards or other tech.

 

[atomicWAR]

MSI, what's that stand for again...Massive Scalpers International...or something.

Yeah this does not look good for MSI. I don't know that I would buy another MSI product willingly again for some time....There has been just way to many infractions by the company in the last few years. Threatening youtuber's, bloatware, their CEO "accidentally" falling to his death. It just seems like there is nothing but shady dealing with them as of late. You wouldn't catch me buying anything else from them for some time and you certainly wouldn't get me to tour their roof after this post 😉

 

[Shadowclash10]

Remind me again what was going on with MSI and those youtubers? Wasn't it something like some smaller Youtuber was offered money by MSI to not publish a bad review of their Bravo 15? And AMD sided with the Youtuber? I think I remember Linus saying something about that...

 

[atomicWAR]

Remind me again what was going on with MSI and those youtubers? Wasn't it something like some smaller Youtuber was offered money by MSI to not publish a bad review of their Bravo 15? And AMD sided with the Youtuber? I think I remember Linus saying something about that...

Yeah that is part of it. They "allegedly" offered money to delay or bury bad reviews, it wasn't just one youtuber also. When Youtubers refused they allegedly went with legal threats and then paid a Nigerean Company to file as many false copyright flags they could on the youtuber's content hoping they wouldn't fight it (making them fear a copyright strike might stick) or conversely the cards had time to sell out while the flag was overturned. It was all really super shady stuff.

I had stopped buying their air cooled GPUs because 3 GPU purchases in a row ended up with dead fans within 6 months. I did get my wife a MSI laptop after the whole bloatware deal only because we got a nearly 3 grand lappy for just under 2.
Plus i figured they had scrubbed much of the bloatware do to the outcry (truth was it was better but not fully scrubbed until I scrubbed it). And I also got a water cooled RTX 2080Ti (A variant) shortly there after because my wife couldn't beleive it was cheaper than all other RTX 2080Ti's (A or non a variants) on the market at that moment by over 160 dollars (air cooled) and 700 cheaper then other liquid (non hybrid) cooled cards. So almost the same kind of price deal. But after the Death of the CEO, the youtubers and now this I am so done with them for the foreseeable future.

 

[jasonf2]

It might fall under RICO anti racketeering act.

They offered a service (selling hard to acquire rare cards) at inflated prices through a shell company when no such service was necessary. Quite frankly msi could have sold them all close to msrp no problem. The fact a shell corporation was set up to save outrage just looks really really bad and leads to racketeering. There were no services offered here as msi controls the flow and whom the resellers are. So msi is guilty through greed or incompetence of profiteering on their own product through a perceived shortage generated in part by themsleves.

https://en.m.wikipedia.org/wiki/Racketeering

The irony is they could have avoided this mess and say "f you all. Were charging $1300 for them because we have a right to." And they do. But the fact they tried to hide it through a shell company to likely avoid wrath of others just shows how swarmy they are. And their leadership has shown they arent that smart time and time again.

Remember that guynamed Shekcel who charged a fortune for AIDS drugs that were once cheap? He claimed he had a right to. Well he's now serving prison time and barred from running a publically traded company again. What about that ceo who made mandatory epi pens so expensive. A couple thousand $ a year can easily break a family. Congress grilled the hell out of that ceo. And she was the daughter of a senator iirc.

Hording toilet paper and selling it at a profit led to serious jail time. Same for face mask.

The us gov't doesnt take kindly to people who try to take advantage of others through scrupulous means. Not that a video card is a life staple. But it will draw an eye towards their practices along with how they pay taxes

As a basic premise I can agree that your listed cases have just enough similarities to define a perceived level of precedent. But most of the cases you are going after are issues of price gouging in cases where laws were in place post 911 that prohibit such actions in a national emergency (toilet paper) and/or the company put the public safety at risk (drug manufactures) in cases where held patents prohibited fair market competition and/or anticompetitive practices created a monopoly on specific lifesaving drugs (underpricing to drive out competition and then overcharging). I am not a lawyer (or a judge) but I don't think a sold out video card is going to make the baseline for the criminal statutes that those others were charged on.

As far as racketeering goes you are going to have to establish that MSI as a company systematically and repeatedly created a false need to establish the price increase. Assuming that this relates to literally 4 cards in their retail channel on a short term non repeating basis relative to thousands being sold under normal channels and also assuming they were charging at prices comparable to others in the free bid marketplace, the practice is shady at best, but again probably not criminal.

Where MSI may be in trouble is more to do with Nvidia and its retail partners than anything else. Depending on their vendor agreement there can be stipulations regarding MSRP and vendor/retailer goodwill is always important. What those details specifically are though is anyone's guess. It isn't too unusual in the video card game for there to be a fair amount of variance in pricing in aftermarket cards (that often exceed the typical price that Nvidia branded cards go for) so I doubt Nvidia's rules are too tight. However retailers have the power to choose what they put on their shelves and MSI is certainly not going to gather any good will downstream by pulling this stunt.

 

[frodoitsmyname]

The real scandal here is that there are people who actually buy a product at this price.

 

[CerianK]

I don't see any real evidence that MSI intentionally did anything wrong here, and without further evidence, any claims to the contrary are pure speculation. That being said, as the saying goes "you cannot bury the dead under the snow".

What I do see wrong here is that Nvidia created a product that clearly does not meet the normal supply vs. demand pricing that would be expected. There are only two possible explanations for this behavior that I can think of (assuming that to intentionally create chaos in the market is not one of them): They entirely misunderstood their products value (unlikely, but possible), and/or they wanted to preemptively eliminate demand for future competitor products (poorly executed, IMHO, but time is a limiting factor).

 

[jonathan1683]

They literally listed it on ebay and Amazon at inflated prices and people still think they didn't know rofl. They knew exactly what they were doing.

 

[TJ Hooker]

It might fall under RICO anti racketeering act.

They offered a service (selling hard to acquire rare cards) at inflated prices through a shell company when no such service was necessary. Quite frankly msi could have sold them all close to msrp no problem. The fact a shell corporation was set up to save outrage just looks really really bad and leads to racketeering. There were no services offered here as msi controls the flow and whom the resellers are. So msi is guilty through greed or incompetence of profiteering on their own product through a perceived shortage generated in part by themsleves.

https://en.m.wikipedia.org/wiki/Racketeering

The irony is they could have avoided this mess and say "f you all. Were charging $1300 for them because we have a right to." And they do. But the fact they tried to hide it through a shell company to likely avoid wrath of others just shows how swarmy they are. And their leadership has shown they arent that smart time and time again.

Remember that guynamed Shekcel who charged a fortune for AIDS drugs that were once cheap? He claimed he had a right to. Well he's now serving prison time and barred from running a publically traded company again. What about that ceo who made mandatory epi pens so expensive. A couple thousand $ a year can easily break a family. Congress grilled the hell out of that ceo. And she was the daughter of a senator iirc.

Hording toilet paper and selling it at a profit led to serious jail time. Same for face mask.

The us gov't doesnt take kindly to people who try to take advantage of others through scrupulous means. Not that a video card is a life staple. But it will draw an eye towards their practices along with how they pay taxes

I don't see anything in the Wikipedia article that seems related to your description of MSI's activities.

I assume you're referring to Shkreli, and he was charged with securities fraud. Nothing to do with his price hikes on Daraprim as far as I can tell, the activities he was arrested for occurred before he worked at Turing (the pharma company that jacked up the medication's price).
https://en.wikipedia.org/wiki/Martin_Shkreli#Criminal_prosecution_and_conviction

As far as I know Mylan hasn't faced any legal consequences over their pricing of Epipens. Although even if they did (or do), that's very different than for GPUs, as Epipens are potentially life saving products whereas GPUs are non-essential. The same thing goes for people who hoarded toilet paper, face masks, etc. For price gouging to be an actual crime, it usually has to be for necessities and often has to occur during an emergency (e.g. pandemic, natural disaster, etc.). In the US anyway.
https://en.wikipedia.org/wiki/Price_gouging#United_States

I'm pretty skeptical the US government is going to start leaning on MSI over selling a few graphics cards at higher prices. The public outcry over RTX 3000 cards is nowhere near as broad as it was for the other examples you listed, and for good reason: the effects of a temporary graphics card shortage are not nearly as widespread, nor are the the consequences even remotely close to those resulting from shortages/price gouging of potentially life saving medicine/medical equipment.