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Comment by xenophanes | Hacker News Reader

Price discrimination is not fraud.

Selling you X widgets for Y dollars -- we both agree to those amounts -- is not fraud. And it's still not fraud no matter what I sold widgets to someone else for. It's just a negotiated, voluntary contract.

Offering discounts to one guy and not another? Not fraud. Just a style of capitalism some people get offended by (hence one might want to not mention it).

The US Government being a chump that's bad at negotiating to get stuff cheaply? Not fraud (excepting politicians who made campaign promises to do better with no reasonable expectation of being able to do better ;)

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There was a similar case last year (they settled):

http://www.washingtonpost.com/wp-dyn/content/article/2009/04...

"GSA contract guidelines require companies to provide the government with accurate information about the discounts they offer to non-government commercial customers, helping the GSA to negotiate its best price."

Here's an interesting tidbit I wasn't previously aware of:

  "Mr. Kapuscinski is an amazingly courageous man," McKnight
  said, according to the law firm's news release. "He saw a
  company program out of sync with designated federal 
  guidelines and decided to make it right."

  He is also much richer. Under the False Claims Act, a 
  whistleblower who files a fraud complaint on behalf of the 
  government can share in the recovery. Kapuscinski will 
  receive a 15 percent share, or $19.2 million, according to 
  the law firm.

If you sign a contract that says you will sell widget X to me for 10$ or the lowest price you sell widget X to anyone else and you charge me 10$ event though you sold it to someone else for 5$ though some intermediary you are committing fraud even if the government is not involved.

I don't think it's fraud. It's breach of contract.

It's both. Fraud applies to a wide range of things.

In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual...

The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain.

http://en.wikipedia.org/wiki/Fraud

Types of criminal fraud include:

  bait and switch ...
  *false billing*

As far as I know (and I may well talk out of my arse here) special rules apply, when you sell to the US government.

It goes something like this: A supplier to a government agency most provide the same discounts that they provide to their most heavily discounted customers.

This has nothing to do with fraud or price discrimination, but with the flouting of rules you have to obey to, when you want to supply goods and services to a government agency.

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