6 ms·

everyone is stuck on the word monopoly. Antitrust law is much larger than just monopolys. and, if you can prove it, predatory pricing is illegal. amazon is a

by basch 8y ago

everyone is stuck on the word monopoly. Antitrust law is much larger than just monopolys. and, if you can prove it, predatory pricing is illegal. amazon is absolutely subsidizing a bunch of stuff with profit from elsewhere. if and what and how the government can do something about that is a huge can of worms with wide reaching implications outside the tech industry. IF the government wants to get involved with separating product development from distribution, they should be going after splitting primevideo from aws (like saying movie studios cant own theaters), or trying to prove that netflix is being unfairly charged for resources different than primevideo (price discrimination.) they should go after amazon logistics. amazon is a vertical conglomerate problem not a monopoly problem (if its a problem at all.) whatever amazon is, the law wasnt ready for, but whether amazon is a good or bad thing is more a matter of perspective.

scarface74 8y ago
So since most of the things we use everyday on the Internet is free, that means most products we use are run by companies that are using predator pricing. Does that mean that HN should also come under scrutiny because it can price HN free? What if I wanted to start a competitor to HN? Should the government make it so there is an environment that makes that easier?
- basch 8y ago
  predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, far from it, as a link aggregator its business model is to push eyeball views elsewhere, similar to drudge. https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing http://signalvnoise.com/posts/1407-why-the-drudge-report-is-one-of-the-best-designed-sites-on-the-web http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...
  - scarface74 8y ago
    Everyone here is talking about helping “future competitors”. How can you compete with free?
    - airstrike 8y ago
      It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.
      - scarface74 8y ago
        By keeping prices “artificially low” it’s keeping competition from forming. Yes this argument is silly. But it’s no sillier than the other arguments being discussed.
  - bko 8y ago
    Why else would anyone lower their prices below that of a competitor if not to get the upper hand? So charging too much is wrong (exploiting your power) but charging too little is wrong (undercutting competitors). Whats the solution? Centrally planned prices have been tried failed.
    - basch 8y ago
      it is usually used in the context of selling at a loss. so if amazon makes a ton of money on aws and then starts selling everything on amazon.com AT A LOSS, to purposely drive their competitors out of business, because nobody else can afford to sell at a loss for a substantial period of time. to prove it, you basically need written/recorded communication of them admitting they priced things that way to be anti competitive. theres probably some argument to be made that uber/lyft and any of the venture capital products being sold with vc subsidization are kind of doing this.
      - scarface74 8y ago
        I assume that almost every company that YC funds is losing money and selling thier services at a loss. How could I compete by selling profitably? The whole idea of most VC backed companies is to grow big and lose money until they get acquired.
        basch 8y ago
        which is not the same as trying to purposely extinguish competition. its about INTENT, not just selling at a loss.
        jjeaff 8y ago
        A textbook example of this would be Bezos dropping diaper prices through the floor and doing it long enough to nearly drive diapers.com out of business. After which, he squired the company.
        8y ago
  - tathougies 8y ago
    > predatory pricing is undercutting a competitor to purposely drive them out of business. That is the purpose of all competition in a free market -- to achieve as large a market share as possible. In a stable market, this necessarily involves removing business from your competitors.
    - scarface74 8y ago
      No the entire purpose is to make a profit. The most profitable company in the US is Apple. They didn’t get there by chasing market share.
      - tathougies 8y ago
        Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: https://wccftech.com/apple-iphone-counterpoint-premium-smartphone-market-share/ https://wccftech.com/apple-iphone-counterpoint-premium-smart...
        scarface74 8y ago
        Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. Are you really saying that Apple has no competition in computers? Apple has been competing against commodity PC makers for 40 years. Or are you saying that Apple doesn’t have competition making MacOS computers? Apple competes with generic PC makers by making a differentiated experience. There was nothing stopping any PC maker from doing the same. It wasn’t like Apple was making massive profits in the late 90s when it bought NeXT and started developing OS X. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: They out competed. Any of the PC manufacturers could have produced a differentiated ecosystem in the 80s or 90s instead of using Microsoft. Apple didn’t have a monopoly on marketing channels.
- AnthonyMouse 8y ago
  > So since most of the things we use everyday on the Internet is free, that means most products we use are run by companies that are using predator pricing. Don't forget "if it's free then you're not the customer you're the product" -- which means it's the users who are engaged in predator pricing by not charging for access to their eyeballs. Of course, the users aren't giving their eyeballs for free, they're trading them for services. And the companies are trading services for eyeballs. There is no money because it's barter, not because there is no exchange of value. And that's the case with all of this. Because the marginal costs for everything in tech are so low, the "cost" of providing something to the incremental user is negligible and nothing is ever really below cost because the ecosystem benefits to the company are worth more than the incremental cost of providing service to the user. What creates these conglomerates isn't predatory pricing, it's the network effect. People use Facebook because their friends use it. They buy stuff on Amazon because the sellers are there, and the sellers are there because the buyers are there.
  - scarface74 8y ago
    I’m well aware of that. I’ve been arguing against government regulation.
    - AnthonyMouse 8y ago
      It is possible to respond to someone while agreeing with them. But allow me to disagree with your conclusion. The problem isn't predatory pricing, but the network effects problem is still a problem. Now, granted, the problem is as much created by the government as anything. The law (CFAA, DMCA) makes it so that people can't create a Facebook "client" without Facebook's permission. If they could, suddenly you've got a bunch of clients that consolidate many social networks into one interface, which makes it easier for users to switch to others. If Facebook is doing something you don't like, you install another back end to your client and transparently use that service with any friends who also have it. The more people Facebook offends, the more users they lose, without any specific other service ever having to reach some critical mass before most people can stop using Facebook. That could be brought about by removing laws rather than adding them (though you could also pass new legislation to the same effect), but in either case it does require a piece of legislation to be passed to bring it about.

by basch 8y ago

scarface74 8y ago

So since most of the things we use everyday on the Internet is free, that means most products we use are run by companies that are using predator pricing. Does that mean that HN should also come under scrutiny because it can price HN free? What if I wanted to start a competitor to HN? Should the government make it so there is an environment that makes that easier?

basch 8y ago
predatory pricing is undercutting a competitor to purposely drive them out of business. i dont think hackernews is trying to put other sites out of business, far from it, as a link aggregator its business model is to push eyeball views elsewhere, similar to drudge. https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing http://signalvnoise.com/posts/1407-why-the-drudge-report-is-one-of-the-best-designed-sites-on-the-web http://signalvnoise.com/posts/1407-why-the-drudge-report-is-...
- scarface74 8y ago
  Everyone here is talking about helping “future competitors”. How can you compete with free?
  - airstrike 8y ago
    It's not like there's a paid alternative to HN that's struggling because this website is free. The existence of a free product doesn't imply predatory pricing.
    - scarface74 8y ago
      By keeping prices “artificially low” it’s keeping competition from forming. Yes this argument is silly. But it’s no sillier than the other arguments being discussed.
- bko 8y ago
  Why else would anyone lower their prices below that of a competitor if not to get the upper hand? So charging too much is wrong (exploiting your power) but charging too little is wrong (undercutting competitors). Whats the solution? Centrally planned prices have been tried failed.
  - basch 8y ago
    it is usually used in the context of selling at a loss. so if amazon makes a ton of money on aws and then starts selling everything on amazon.com AT A LOSS, to purposely drive their competitors out of business, because nobody else can afford to sell at a loss for a substantial period of time. to prove it, you basically need written/recorded communication of them admitting they priced things that way to be anti competitive. theres probably some argument to be made that uber/lyft and any of the venture capital products being sold with vc subsidization are kind of doing this.
    - scarface74 8y ago
      I assume that almost every company that YC funds is losing money and selling thier services at a loss. How could I compete by selling profitably? The whole idea of most VC backed companies is to grow big and lose money until they get acquired.
      - basch 8y ago
        which is not the same as trying to purposely extinguish competition. its about INTENT, not just selling at a loss.
        jjeaff 8y ago
        A textbook example of this would be Bezos dropping diaper prices through the floor and doing it long enough to nearly drive diapers.com out of business. After which, he squired the company.
        8y ago
- tathougies 8y ago
  > predatory pricing is undercutting a competitor to purposely drive them out of business. That is the purpose of all competition in a free market -- to achieve as large a market share as possible. In a stable market, this necessarily involves removing business from your competitors.
  - scarface74 8y ago
    No the entire purpose is to make a profit. The most profitable company in the US is Apple. They didn’t get there by chasing market share.
    - tathougies 8y ago
      Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: https://wccftech.com/apple-iphone-counterpoint-premium-smartphone-market-share/ https://wccftech.com/apple-iphone-counterpoint-premium-smart...
      - scarface74 8y ago
        Profit is a function of competition. If Apple had competitors, it would not be able to charge as much as it did for its computers. Are you really saying that Apple has no competition in computers? Apple has been competing against commodity PC makers for 40 years. Or are you saying that Apple doesn’t have competition making MacOS computers? Apple competes with generic PC makers by making a differentiated experience. There was nothing stopping any PC maker from doing the same. It wasn’t like Apple was making massive profits in the late 90s when it bought NeXT and started developing OS X. You argue that Apple does have competition, and that's nominally true if you are very coarse and sloppy with your comparisons, but due to marketing and their walled garden, they are basically a monopoly over the upper / more artistic portions of the market: They out competed. Any of the PC manufacturers could have produced a differentiated ecosystem in the 80s or 90s instead of using Microsoft. Apple didn’t have a monopoly on marketing channels.
AnthonyMouse 8y ago
> So since most of the things we use everyday on the Internet is free, that means most products we use are run by companies that are using predator pricing. Don't forget "if it's free then you're not the customer you're the product" -- which means it's the users who are engaged in predator pricing by not charging for access to their eyeballs. Of course, the users aren't giving their eyeballs for free, they're trading them for services. And the companies are trading services for eyeballs. There is no money because it's barter, not because there is no exchange of value. And that's the case with all of this. Because the marginal costs for everything in tech are so low, the "cost" of providing something to the incremental user is negligible and nothing is ever really below cost because the ecosystem benefits to the company are worth more than the incremental cost of providing service to the user. What creates these conglomerates isn't predatory pricing, it's the network effect. People use Facebook because their friends use it. They buy stuff on Amazon because the sellers are there, and the sellers are there because the buyers are there.
- scarface74 8y ago
  I’m well aware of that. I’ve been arguing against government regulation.
  - AnthonyMouse 8y ago
    It is possible to respond to someone while agreeing with them. But allow me to disagree with your conclusion. The problem isn't predatory pricing, but the network effects problem is still a problem. Now, granted, the problem is as much created by the government as anything. The law (CFAA, DMCA) makes it so that people can't create a Facebook "client" without Facebook's permission. If they could, suddenly you've got a bunch of clients that consolidate many social networks into one interface, which makes it easier for users to switch to others. If Facebook is doing something you don't like, you install another back end to your client and transparently use that service with any friends who also have it. The more people Facebook offends, the more users they lose, without any specific other service ever having to reach some critical mass before most people can stop using Facebook. That could be brought about by removing laws rather than adding them (though you could also pass new legislation to the same effect), but in either case it does require a piece of legislation to be passed to bring it about.