Can you explain why this should not be viewed as anti-competitive behavior? How would you call it if it's not predatory pricing/undercutting?
1. above the competition - gouging, profiteering
2. below the competition - predatory pricing, unfair competition, dumping
3. same as the competition - price fixing, collusion
All are illegal!
- if a market player wants to sell goods or services at a loss, let them do it and it benefits the consumer
- if the competition goes out of business and the prices are raised, somebody else will see the opportunity to enter the market at a lower cost.
Rinse and repeat. The consumers benefit from it either way.
Comparison: when a new restaurant opens, it's very common to hand out coupons in the neighborhood for discounts or free meals. Those free meals will be sold at a loss, with the goal of building a customer base. Think of it as marketing.
EOD, "anti-competitive" is evaluated on the outcome -- does the success of the company running the discounts make the market more or less competitive if they succeed? If a company is already the dominant player in a market, it's anti-competitive to price dump to keep new entrants out.
But if the company is new and trying to disrupt established players (or trying to create a market where one didn't exist), it's very hard to argue that there's less competition due to their success.
This doesn't seem right. If they are price dumping then it will immediately affect the competition. No need to wait for an outcome or interpretation.
> Comparison: when a new restaurant opens, it's very common to hand out coupons in the neighborhood for discounts or free meals.
I'd say this is only acceptable because it is small scale (only few restaurants fit in a neighborhood) and the amount of money isn't endless like it (often) is with VC money. The short duration makes it possible for the competition to overcome the negative effects.
The problem with VC money is that all too often it is used to destroy competition and build monopolies.
Case history, please.
So, it's commonplace but no case histories.
Microsoft - not a VC funded company. NFL - government sanctioned monopoly, also not a VC funded company
Now, as to OS/2, people say "poor IBM", but IBM was the monopolist boogeyman in the 70's and 80's. BEOS simply wasn't good enough. Apple OS's and Linux did and continue to do quite well.
The DOJ went after Microsoft for giving away Explorer for free, which is what every browser maker does now, and has for 20 years. How that's bad for consumers I have no idea. As for Netscape, I switched from Netscape to Explorer because Netscape crashed constantly. That was hardly anti-competitive behavior on Microsoft's part, it was bad engineering on Netscape's.
Yes, I know IE crashed too, but nowhere near as often as Netscape.
I also give away the Digital Mars C and C++ compilers, the D compiler, and the source code to all of it. Is that anti-competitive too? How about all the other free software I use every day? Should the DOJ go after their creators, too?
This unpaid and untaxed emotional labor has to stop!
We need rules and regulations for society to work!
they are taking the risk of offering free services in the hope that you will stay around and keep using the service. if you dont, they are at a loss.