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Price fixing is not the same as "businesses are held guilty of overcharging if they price their products as high as the market will bear". The fact that lawyers

Price fixing is not the same as "businesses are held guilty of overcharging if they price their products as high as the market will bear". The fact that lawyers will make exorbitant profit is more palatable to me than 3 mega corporation's that collude to make X times the lawyers exorbitant profit.

eecsninja 8y ago
That's not what he said. To summarize: - "price gouging"/"overpricing" -- "businesses are held guilty of overcharging if they price their products as high as the market will bear" - "predatory pricing" -- on the other hand they are guilty of dumping if they keep cutting their costs and lower prices below what some busybody feels is right - "price-fixing" -- "they charge the same as their competitors happen to charge"
- mark212 8y ago
  None of those are actually alleged in the complaint. Price gouging is only rarely a crime and in most definitions involves taking advantage of things like natural disasters. Charging what the market will bear isn’t the same thing at all. And more to the point, isn’t what this complaint is about. Conspiring to fix prices is indefensible under any economic theory. If three companies who have 96% of the market agree not to compete with each other and inflate prices, that’s bad. Your grandmother and a sophisticated Econ PhD would agree. “Charge the same as their competitors happen to charge” also isn’t price fixing. That would be parallel pricing and is entirely legal. Price fixing is as described above, conspiring together in restraint of trade. And it’s really hard to prove without a whistleblower or some very clear (repeated) pricing moves that are statistically highly improbable to have been the result of coincidence. As for why the other 4% of the market doesn’t step up and grab the market share, some industries just don’t work like that. It costs $10 billion or more to build a chip fab and doesn’t happen overnight. It could be that the 4% player is at capacity and is selling out by slightly underpricing, but doesn’t have enough production to affect the market. There are certainly rapacious attorneys out there. But Samsung here is a victim? Micron? If the charges are specious, they’ll sort it out in short order and the legal fees to do so won’t even cause them to break a sweat. I’ll save my pity for those who deserve it.

eecsninja 8y ago

That's not what he said. To summarize: - "price gouging"/"overpricing" -- "businesses are held guilty of overcharging if they price their products as high as the market will bear" - "predatory pricing" -- on the other hand they are guilty of dumping if they keep cutting their costs and lower prices below what some busybody feels is right - "price-fixing" -- "they charge the same as their competitors happen to charge"

mark212 8y ago
None of those are actually alleged in the complaint. Price gouging is only rarely a crime and in most definitions involves taking advantage of things like natural disasters. Charging what the market will bear isn’t the same thing at all. And more to the point, isn’t what this complaint is about. Conspiring to fix prices is indefensible under any economic theory. If three companies who have 96% of the market agree not to compete with each other and inflate prices, that’s bad. Your grandmother and a sophisticated Econ PhD would agree. “Charge the same as their competitors happen to charge” also isn’t price fixing. That would be parallel pricing and is entirely legal. Price fixing is as described above, conspiring together in restraint of trade. And it’s really hard to prove without a whistleblower or some very clear (repeated) pricing moves that are statistically highly improbable to have been the result of coincidence. As for why the other 4% of the market doesn’t step up and grab the market share, some industries just don’t work like that. It costs $10 billion or more to build a chip fab and doesn’t happen overnight. It could be that the 4% player is at capacity and is selling out by slightly underpricing, but doesn’t have enough production to affect the market. There are certainly rapacious attorneys out there. But Samsung here is a victim? Micron? If the charges are specious, they’ll sort it out in short order and the legal fees to do so won’t even cause them to break a sweat. I’ll save my pity for those who deserve it.