7 ms·

Seems like the sort of scrutiny that would produce a well-intentioned law that will end up propping incumbents. Excited to be proven wrong though.

pydry 5y ago
There's already a law against predatory pricing. It just has a high burden of proof, isn't enforced, and the FTC's own website expresses skepticism that such a thing could ever really happen: 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...
- vlovich123 5y ago
  That’s frustrating. https://www.bloomberg.com/news/articles/2020-07-29/amazon-emails-show-effort-to-weaken-diapers-com-before-buying-it https://www.bloomberg.com/news/articles/2020-07-29/amazon-em...
minikites 5y ago
What is your solution? Should we just keep doing nothing?
- beiller 5y ago
  That could work. Market forces will play it out, investors will get burned and be more hesitant to pour more gasoline on the fire. The business model as it stands appears to not work long term (maybe). What company has had long term success with this model (operate at massive losses until no competition left)? But short term the investors have been dumping their money directly into consumers' pockets via cheap uber rides or uber eats subsidized by VC so whats not to love?
  - jonfw 5y ago
    Amazon, Uber, and Tesla have done pretty well by a similar model. They went a long time and spent a LOT of money before they turned reliable profits
    - lostcolony 5y ago
      Umm, is Uber profitable? Amazon is (and even in the past, was basically at a rounding error to zero on margin, since they were plowing so much money into R&D), and Tesla has had the past couple quarters be profitable (though amusingly more on bets on Bitcoin than actual car sales), both essentially creating a new market, and while not actually undercutting the competition. But I thought Uber was 'expecting' to be profitable by the end of the year? While basically making it so cab companies have a hard time competing, since they, you know, obey the rules (albeit ones they created to, themselves, maintain a monopoly), and have to turn a profit.
      - bee_rider 5y ago
        You misunderstand. Uber plans to be profitable within a year... but didn't say which year they'll be profitable within.
      - nickik 5y ago
        > Tesla has had the past couple quarters be profitable They have been profitable for almost 1.5 years. > (though amusingly more on bets on Bitcoin than actual car sales) That is simply false.
        lostcolony 5y ago
        Yeah, I wasn't commenting on how long Tesla has been profitable, just that currently they are. But it's been due to emission offsets and bitcoin. And given they don't make a profit on their cars...they've made more from bitcoin than on car sales. https://www.autoweek.com/news/green-cars/a36266393/tesla-made-more-money-selling-credits-and-bitcoin-than-cars/ https://www.autoweek.com/news/green-cars/a36266393/tesla-mad... https://www.motorbiscuit.com/tesla-loses-money-on-every-single-car-heres-where-the-profit-hides/ https://www.motorbiscuit.com/tesla-loses-money-on-every-sing...
  - andrekandre 5y ago
    investors will get burned and be more hesitant to pour more gasoline on the fire that defintely makes sense, but from what i hear we are in a glut of cheap capital in recent times, so this might not be so effective deterrent What company has had long term success with this model im not sure it needs to be long term sustained, as long as short term damage is severe enough, the player can just harvest the market share from the competition... when it heats back up again, just use that financial might again to clamp things down... it would be a huge deterrent to further investors/entrepreneurs
    - stavros 5y ago
      What does "cheap capital" mean? $1 is worth $1, how can it be cheap or expensive in terms of itself?
      - Shikadi 5y ago
        Interest rates are zero
      - deleted 5y ago
        [deleted]
  - bogwog 5y ago
    > Market forces will play it out The problem with anti-competitive practices is that they're immune to market forces.
    - dragonwriter 5y ago
      > The problem with anti-competitive practices is that they're immune to market forces. No, they aren't, in general. They are self-limiting, though, where the actor isn't insulated from idealized market forces by market position. In that case, they are incentivized by the same real market forces which protect them.
- markzzerella 5y ago
  Stop using or supporting these people in every way you can, and help others that are less technically inclined do the same.
mrandish 5y ago
I share your concern. In this era of cronyism and regulatory capture, the stated intentions of legislative efforts rarely seem to survive through the law-making process, no matter how laudable their origins. They get weakened, undermined, loop-holed or otherwise subverted. Even the recent "Right to Repair" efforts appear to specifically exclude things like mobile devices, PCs and consoles. Seeing so many bills launched which appear to be so positive yet end up being either irrelevant or perversely damaging, has left me deeply skeptical anytime I hear another legislator announce some bill. The more I agree with the intent, the more I now just fear disappointment. The system is corrupt. Both major parties play these games and there is no longer a party I can rely on to be consistently better. Even when one party appears less bad, it's usually just that they promise things I find more agreeable, yet don't actually deliver when in power.
bee_rider 5y ago
The issue seems, to me, that we're picking between propping up the incumbent (by preventing anti-competitive pricing) and propping up the competitor (with VC funds). Neither of these is a neutral choice, really. Competitors should win when they have a fundamental advantage like a technology jump -- switching because one company can temporarily price below the cost of providing service is not much of an improvement.
tablespoon 5y ago
> Seems like the sort of scrutiny that would produce a well-intentioned law that will end up propping incumbents. Excited to be proven wrong though. Maybe by itself, but it could be coupled with other laws designed to knock those incumbents down (e.g. by breaking them up), resulting in a better-structured and fairer market. IMHO, the biggest tech giant should have their peripheral businesses broken off (e.g. separate Facebook and Instagram), and their main businesses should be further split to create well-matched peer competitors (e.g. Facebook Red, Facebook Blue, and Facebook Green).

pydry 5y ago

There's already a law against predatory pricing. It just has a high burden of proof, isn't enforced, and the FTC's own website expresses skepticism that such a thing could ever really happen: 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...

vlovich123 5y ago
That’s frustrating. https://www.bloomberg.com/news/articles/2020-07-29/amazon-emails-show-effort-to-weaken-diapers-com-before-buying-it https://www.bloomberg.com/news/articles/2020-07-29/amazon-em...

minikites 5y ago

What is your solution? Should we just keep doing nothing?

beiller 5y ago
That could work. Market forces will play it out, investors will get burned and be more hesitant to pour more gasoline on the fire. The business model as it stands appears to not work long term (maybe). What company has had long term success with this model (operate at massive losses until no competition left)? But short term the investors have been dumping their money directly into consumers' pockets via cheap uber rides or uber eats subsidized by VC so whats not to love?
- jonfw 5y ago
  Amazon, Uber, and Tesla have done pretty well by a similar model. They went a long time and spent a LOT of money before they turned reliable profits
  - lostcolony 5y ago
    Umm, is Uber profitable? Amazon is (and even in the past, was basically at a rounding error to zero on margin, since they were plowing so much money into R&D), and Tesla has had the past couple quarters be profitable (though amusingly more on bets on Bitcoin than actual car sales), both essentially creating a new market, and while not actually undercutting the competition. But I thought Uber was 'expecting' to be profitable by the end of the year? While basically making it so cab companies have a hard time competing, since they, you know, obey the rules (albeit ones they created to, themselves, maintain a monopoly), and have to turn a profit.
    - bee_rider 5y ago
      You misunderstand. Uber plans to be profitable within a year... but didn't say which year they'll be profitable within.
    - nickik 5y ago
      > Tesla has had the past couple quarters be profitable They have been profitable for almost 1.5 years. > (though amusingly more on bets on Bitcoin than actual car sales) That is simply false.
      - lostcolony 5y ago
        Yeah, I wasn't commenting on how long Tesla has been profitable, just that currently they are. But it's been due to emission offsets and bitcoin. And given they don't make a profit on their cars...they've made more from bitcoin than on car sales. https://www.autoweek.com/news/green-cars/a36266393/tesla-made-more-money-selling-credits-and-bitcoin-than-cars/ https://www.autoweek.com/news/green-cars/a36266393/tesla-mad... https://www.motorbiscuit.com/tesla-loses-money-on-every-single-car-heres-where-the-profit-hides/ https://www.motorbiscuit.com/tesla-loses-money-on-every-sing...
- andrekandre 5y ago
  investors will get burned and be more hesitant to pour more gasoline on the fire that defintely makes sense, but from what i hear we are in a glut of cheap capital in recent times, so this might not be so effective deterrent What company has had long term success with this model im not sure it needs to be long term sustained, as long as short term damage is severe enough, the player can just harvest the market share from the competition... when it heats back up again, just use that financial might again to clamp things down... it would be a huge deterrent to further investors/entrepreneurs
  - stavros 5y ago
    What does "cheap capital" mean? $1 is worth $1, how can it be cheap or expensive in terms of itself?
    - Shikadi 5y ago
      Interest rates are zero
    - deleted 5y ago
      [deleted]
- bogwog 5y ago
  > Market forces will play it out The problem with anti-competitive practices is that they're immune to market forces.
  - dragonwriter 5y ago
    > The problem with anti-competitive practices is that they're immune to market forces. No, they aren't, in general. They are self-limiting, though, where the actor isn't insulated from idealized market forces by market position. In that case, they are incentivized by the same real market forces which protect them.
markzzerella 5y ago
Stop using or supporting these people in every way you can, and help others that are less technically inclined do the same.

mrandish 5y ago

I share your concern. In this era of cronyism and regulatory capture, the stated intentions of legislative efforts rarely seem to survive through the law-making process, no matter how laudable their origins. They get weakened, undermined, loop-holed or otherwise subverted. Even the recent "Right to Repair" efforts appear to specifically exclude things like mobile devices, PCs and consoles. Seeing so many bills launched which appear to be so positive yet end up being either irrelevant or perversely damaging, has left me deeply skeptical anytime I hear another legislator announce some bill. The more I agree with the intent, the more I now just fear disappointment. The system is corrupt. Both major parties play these games and there is no longer a party I can rely on to be consistently better. Even when one party appears less bad, it's usually just that they promise things I find more agreeable, yet don't actually deliver when in power.

bee_rider 5y ago

The issue seems, to me, that we're picking between propping up the incumbent (by preventing anti-competitive pricing) and propping up the competitor (with VC funds). Neither of these is a neutral choice, really. Competitors should win when they have a fundamental advantage like a technology jump -- switching because one company can temporarily price below the cost of providing service is not much of an improvement.

tablespoon 5y ago

> Seems like the sort of scrutiny that would produce a well-intentioned law that will end up propping incumbents. Excited to be proven wrong though. Maybe by itself, but it could be coupled with other laws designed to knock those incumbents down (e.g. by breaking them up), resulting in a better-structured and fairer market. IMHO, the biggest tech giant should have their peripheral businesses broken off (e.g. separate Facebook and Instagram), and their main businesses should be further split to create well-matched peer competitors (e.g. Facebook Red, Facebook Blue, and Facebook Green).