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Comment by smnrchrds | Hacker News Reader

> Steam charges 30%. Microsoft: 30% ... If you go to consoles: PlayStation, Xbox Nintendo all charged 30%.

> Physical stores: game shop, Amazon, Best Buy, Walmart all charge 30%. Apple and Google charged 30%.

How on earth is this not price fixing and/or oligopoly behaviour?

because its an industry standard. Its not illegal to go "looks like everyone else is charging 30%, let's charge the same). And in general, you don't have an incentive to undercut on price in a situation like this since nobody wins a price war - you try to bring some other value to justify listing on your platform (like a captive audience). Its easiest to just go with whatever ends up being the industry standard- and these prices are all public, no secret information has to be shared to see what everyone else is doing.

Contrary to (apparently) popular belief, simply matching the standard industry rate is not legally considered price fixing, which requires active agreement between competitors.

If the difference between this being legal and illegal is active conversation vs knowing looks, we still have a problem ultimately

Because that might actually represent the fair market value that these sorts of storefronts represent?

30% in physical shops is entirely different to 30% on digital shop fronts.

In physical shops you have a lot more capital invested, because that 30% feeds the retailer, the landlord, the construction company whereas the mobile marketplace has gobbled up two layers of the economy and charges the same rate with pretty insanely significant barriers of entry to compete.

It comes down to a question of monopoly and how much is too far which maybe everyone here has differing opinions on when that limit is reached.

Google has invested 100s of billions in Android.

As of 2016, the number was ~$9B given that they had $31B in revenue and $22B in profit.

https://www.theverge.com/2016/1/21/10810834/android-generate...

100s of billions in 2020 seems off by at least an order of magnitude.

Price fixing at least requires an agreement among the parties - which is unlikely here. If I own a gas station and Bob owns the only other gas station in town across the street from mine, and we both agree to set the price to $4/gallon, then that is price fixing.

But if I wake up one day and see Bob set his price to $4/gallon while I'm selling for $2/gallon, I may decide to bump my price up to $4/gallon and that is not price fixing.

Realistically the 30% vig didn't come out of thin air - Apple set the standard, the rest of the world saw apple getting away with it, and decided that they would set their rates the same. But that doesn't mean price fixing resulted in all of us setting the percentage to 30.

I'd consider the gas station situation price fixing, but not illegal price fixing per se - gas station price fixing in general is a much bigger problem in some remote parts of the US or around airports where two or three gas stations set their price to be $3 or more over the rates at the nearest city 10-20 miles away.

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