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. 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. 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. 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-...

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