Thread

1. ocd · 1790861971 · focus · HN ↗

   I'm not a business guy, but I think I would be very worried if I created any opening (even on the very long term) for competition to justify itself being built up to meet demand (or national security requirements of other countries) on an industry I mostly control, because I prioritized extremely high prices for a few years that might have the effect of changing the arithmetic for potential competitors that wouldn't have done it before.

   It makes me consider whether there would be retaliation in later years against the US intellectual property system in countries other than China. While RAM is a tangible product, the areas it serves aren't really.

   1. radford-neal · 1790870747 · focus · HN ↗

      If I understand this comment correctly, it's saying that Micron and the others would be better off selling RAM at below the price they could get, in order to keep competitors from deciding to enter the market.

      Such collusion might well be a violation of anti-trust law, but in any case, it wouldn't work. If they decide to sell at below-market price, they must (by definition) be preventing some customers from buying by some non-price mechanism (eg, only selling to companies run by other members of the CEO's family). Potential competitors would then see an opportunity to sell to these excluded customers.

      1. christina97 · 1790871054 · focus · HN ↗

         Yeah there is no such thing as selling a commodity below its market price on the open market. Someone else will come and arbitrage that away, or it’s not an open market.

         1. fmbb · 1790871314 · focus · HN ↗

            Supply is severely limited and there is not really any competition making RAM chips, so it is kind of not a commodity and not a market.

            But you are right someone will arbitrage the price, like scalpers selling concert tickets.

         2. sdenton4 · 1790872309 · focus · HN ↗

            Well, that's blatantly false...

            A well-known anticompetitive tactic is for a big player with a vast bank account to move into an area and eat losses while waiting for their competitors to starve. Well observed in the 90's movie rental market, so certainly real.

            1. DaSHacka · 1790874656 · focus · HN ↗

               Also why anti-dumping laws exist

               1. hungryhobbit · 1790875428 · focus · HN ↗

                  Do those solve the problem just outlined?

                  (Legitimately asking: I don't know the answer ... but based on most US business law my strong suspicion is ... no, they don't.)

                  1. DaSHacka · 1790875896 · focus · HN ↗

                     No, because they're hardly enforced. China has been blatantly dumping a buttload of products for decades and the U.S. has been asleep at the wheel as it continues to hollow out our domestic manufacturing industries even further.

                     1. guelo · 1790881983 · focus · HN ↗

                        Silicon Valley and other venture backed enterprises also regularly dump into various markets without consequences.
                     2. Dylan16807 · 1790907086 · focus · HN ↗

                        Like what? Everything I've seen is that parts are legitimately much cheaper in China and they're making good money selling to the US.
                     3. tpm · 1790931693 · focus · HN ↗

                        > China has been blatantly dumping a buttload of products for decades

                        By that account China would be bankrupt by now because subsidizing a "buttload" for "decades" does cost a lot of money.

                        I think the reality is much more subtle - they force their way into a new market if needed and then stop and let the market forces do their thing.

                     4. TitaRusell · 1790932292 · focus · HN ↗

                        The US has tens of millions of poor people who are kept alive because of cheap shit from China.
                     5. tancop · 1791034211 · focus · HN ↗

                        Dumping means losing money. China is winning because they give businesses low interest loans from a state owned bank (or invest capital from a state fund) to expand production. Factories are profitable the whole time, they just don't waste money and time getting private loans.

                        America can't do that because the government takes bribes from banks and believes in Friedmanite ideology where state investment is evil. It's a great opportunity for Europe to copy China and become independent.

            2. saltcured · 1790876553 · focus · HN ↗

               The statement further up should have qualified it as "scarce commodity". Then it is correct.

               To successfully perform dumping, you have to have access to excess supply capable of disrupting that market.

            3. mr_toad · 1790884912 · focus · HN ↗

               You don’t lower your prices on the off chance a competitor might enter the market in the future. You wait until they have invested capital but before they start making profits and are at their most vulnerable.

               1. vanviegen · 1790885846 · focus · HN ↗

                  I don't think that would work. They wouldn't demolish the competitor's factory when it goes bankrupt. Instead the factory, being an asset, gets sold for cheap, and another company gets a shot at competing while having much lower debts. This process could repeat a few times until the debt is low enough to profitability compete.

                  So if that's the expected outcome, it might be better to prevent competitors from building factories in the first place.

                  1. tyromaniac · 1790945322 · focus · HN ↗

                     In any case these fans would take fae longer to get into production than the projection of when the price falls anyway
                  2. m4rtink · 1790951215 · focus · HN ↗

                     I would not single out doing just that - buying the competitor and making the factory unusable.

                     A similar thing happened in the railway world, where two state owned railway companies colluded to have used rail cars scrapped so that their privately owned competitors can&#x27;t buy them: <a href="https:&#x2F;&#x2F;www.railway-technology.com&#x2F;news&#x2F;ec-cd-obb-antitrust-concerns" rel="nofollow">https:&#x2F;&#x2F;www.railway-technology.com&#x2F;news&#x2F;ec-cd-obb-antitrust-...

            4. mcmcmc · 1790891040 · focus · HN ↗

               Selling below market price != selling below cost, which is a prerequisite for it to be anticompetitive

Unofficial Hacker News client; not affiliated with Y Combinator.