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You are mixing two things Intel does with low prices. One is legal and one is not. Intel used both Against AMD during the Opteron and the Athlon 64 era. Intel

You are mixing two things Intel does with low prices. One is legal and one is not. Intel used both Against AMD during the Opteron and the Athlon 64 era. Intel is absolutely allowed to compete with low prices and cutting into profit margins. Intel is not allowed to to pay rebates in exchange of being single supplier, or attempting to restrict access from the competitors. The difference is between “aggressive competition” and “antitrust abuse” as the source you provide clarifies. Intel has the margins that allow it to compete aggressively and legally.

loeg 8y ago
I think the "And" at the beginning of OP's comment shows they are cognizant that they are pointing out the second mechanism, not contradicting the first mechanism.
Nomentatus 8y ago
Actually, low prices can be illegal, too. It's illegal to lowball prices to cost or below (dumping) either - and the rebates are part of what determines cost, not just a possible offense themselves.
- loeg 8y ago
  Do you have more information on that claim? It seems difficult to believe given the plethora of VC-funded companies selling products below cost in order to grow market share.
  - bradknowles 8y ago
    Private companies have much more freedom to do as they wish with regards to price dumping in their local markets, as compared to public companies.
    - loeg 8y ago
      Can you point to a specific law here? Thanks.
  - Nomentatus 8y ago
    If you have no market power, then you can sell at below cost, true. Intel had immense market power.
    - loeg 8y ago
      Again, looking for a specific law or more detail here.
      - Nomentatus 8y ago
        It would have been kinder for you to Google first: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Competition_law https://en.wikipedia.org/wiki/Competition_law
        loeg 8y ago
        I don't think I would have found these articles with googling, since I didn't recall the term "predatory pricing." They don't really support your original claim, either -- "It's illegal to lowball prices to cost or below." From the first: > Predatory pricing, also known as undercutting, is a pricing strategy in which a product or service is set at a very low price with the intention to achieve new customers (Loss leader), or driving competitors out of the market or to create barriers to entry for potential new competitors. > ... > However, it can be difficult to prove that prices dropped because of deliberate predatory pricing, rather than legitimate price competition. I wonder how often predatory pricing has been prosecuted? > Predatory pricing practices may result in antitrust claims of monopolization or attempts to monopolize. Businesses with dominant or substantial market shares are more vulnerable to antitrust claims. However, because the antitrust laws are ultimately intended to benefit consumers, and discounting results in at least short-term net benefit to consumers, the U.S. Supreme Court has set high hurdles to antitrust claims based on a predatory pricing theory. > ... > In addition, the Court established that for prices to be predatory, they must be below the seller's cost. I.e., below cost pricing is necessary, but not sufficient. The second is just a generic article and doesn't mention low prices in particular or US law in any way. Here's a better source: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost https://www.ftc.gov/tips-advice/competition-guidance/guide-a... > Can prices ever be "too low?" The short answer is yes, but not very often.
  - shakna 8y ago
    In the US, this is regulated by the complexities of antitrust law,beginning with Sherman. Lowering prices beyond cost, in an attempt to control part of a market, can be considered a crime... But the regulations are exceedingly complex.

loeg 8y ago

I think the "And" at the beginning of OP's comment shows they are cognizant that they are pointing out the second mechanism, not contradicting the first mechanism.

Nomentatus 8y ago

Actually, low prices can be illegal, too. It's illegal to lowball prices to cost or below (dumping) either - and the rebates are part of what determines cost, not just a possible offense themselves.

loeg 8y ago
Do you have more information on that claim? It seems difficult to believe given the plethora of VC-funded companies selling products below cost in order to grow market share.
- bradknowles 8y ago
  Private companies have much more freedom to do as they wish with regards to price dumping in their local markets, as compared to public companies.
  - loeg 8y ago
    Can you point to a specific law here? Thanks.
- Nomentatus 8y ago
  If you have no market power, then you can sell at below cost, true. Intel had immense market power.
  - loeg 8y ago
    Again, looking for a specific law or more detail here.
    - Nomentatus 8y ago
      It would have been kinder for you to Google first: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Competition_law https://en.wikipedia.org/wiki/Competition_law
      - loeg 8y ago
        I don't think I would have found these articles with googling, since I didn't recall the term "predatory pricing." They don't really support your original claim, either -- "It's illegal to lowball prices to cost or below." From the first: > Predatory pricing, also known as undercutting, is a pricing strategy in which a product or service is set at a very low price with the intention to achieve new customers (Loss leader), or driving competitors out of the market or to create barriers to entry for potential new competitors. > ... > However, it can be difficult to prove that prices dropped because of deliberate predatory pricing, rather than legitimate price competition. I wonder how often predatory pricing has been prosecuted? > Predatory pricing practices may result in antitrust claims of monopolization or attempts to monopolize. Businesses with dominant or substantial market shares are more vulnerable to antitrust claims. However, because the antitrust laws are ultimately intended to benefit consumers, and discounting results in at least short-term net benefit to consumers, the U.S. Supreme Court has set high hurdles to antitrust claims based on a predatory pricing theory. > ... > In addition, the Court established that for prices to be predatory, they must be below the seller's cost. I.e., below cost pricing is necessary, but not sufficient. The second is just a generic article and doesn't mention low prices in particular or US law in any way. Here's a better source: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost https://www.ftc.gov/tips-advice/competition-guidance/guide-a... > Can prices ever be "too low?" The short answer is yes, but not very often.
- shakna 8y ago
  In the US, this is regulated by the complexities of antitrust law,beginning with Sherman. Lowering prices beyond cost, in an attempt to control part of a market, can be considered a crime... But the regulations are exceedingly complex.