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> dumping of retail price with the purpose of locking in users - a blatantly anticompetitive practice that would be illegal in most industries What? There are

> dumping of retail price with the purpose of locking in users - a blatantly anticompetitive practice that would be illegal in most industries What? There are scores of industries that use loss-leaders to get customers to commit to long-term contracts. Razors, satellite/cable TV, etc. > This doesn't happen in places like the US because there's a very strong cartel/oligopoly there that affords them the right to simply deny you a terminal if it's not under the carrier's conditions. This isn't true at all, and I don't know why you would think it was. Here's a counterexample: https://ting.com/ https://ting.com/

PeterisP 13y ago
Exactly, forcing a lock-in is illegal in all those industries as well. For razors: you are allowed to manufacture and market blades that are compatible with competitors; so people are (both legally and practically) allowed to buy a loss-leader razor from company A, and cheaper razorblades from company B. For satellite/cable TV: in places with decent consumer rights laws there are practical, massively used ways to get out of long-term lock-ins; so such deals work only as long as consumers like the deal. If customer walks away, there may be a contract-breaking fee involved, but as soon as you want to change the contract the slightest bit not to customer's favor (increase price by a dollar or drop a TV channel, which you may need to do) - bam; the customer can walk away with no fees.
kvb 13y ago
Loss leading may actually be harmful to consumers. See http://afinetheorem.wordpress.com/2013/07/12/loss-leading-as-an-exploitative-practice-z-chen-p-rey-2012/ http://afinetheorem.wordpress.com/2013/07/12/loss-leading-as... for one readable explanation.