Comment by smokeyj | Hacker News Reader

Comment by smokeyj | Hacker News Reader

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> Predatory pricing exists when you try to take over a market by selling something so cheap, other competitors are driven out

This is what happens when innovation threatens dinosaurs. Phrases such as "predatory pricing" exemplifies a fundamental misunderstanding of how pricing works, or markets in general.

People forget the whole point of the market is to serve the consumer. The point of the market is not to protect the interests of old tech giants because they can't compete with free. They're willing to prevent consumers from enjoying the satisfaction that Android has to offer because they want money for doing what Google offers for free. By this logic I should start a search engine that charges $10 a search, then sue google for anti-competitive practice.

Everything about business is predatory. Every time a company releases a better product it is predatory to their competition. Offering an edge your competitors can't handle is kind of the point. If Google's pricing is so "predatory", why doesn't the competition do the same? Because they're ethical?

> Everything about business is predatory.

By that reasoning, Google should have either bought the patents or taken their lumps when they lost, right? If business is inherently predatory, whatever predatory groups wish to form are free to do so in the advancement of their own interests. Why is it for Google to bandy about anticompetitive concerns, crying "DOJ!" but not their competitors?

Anti-competition isn't an empirically observable phenomena. In theory it was supposed to serve the consumer, but there is a disconnect between the alleged intention and reality. Kind of a big problem. Preventing a company from offering a free product in no way serves the consumer.

I don't want to imply google is more ethical than the competition, but in this instance calling for an abolition of patents is in line with my personal views, which is markets should serve the consumer. I have no unconditional support for any of these companies.

Preventing a company from offering a free product in no way serves the consumer.

In a general context, a company practicing 'predatory pricing' may do so to drive the other competitors out of business. Once that happens, it's free to raise prices to monopolistic levels which would end up hurting consumers eventually.

> Once that happens, it's free to raise prices to monopolistic levels

These fears are not based on evidence. When has someone released a free product only until they wiped out all the competition, proceeding to jack up prices? I mean, once they jack up the prices there is an established market ripe to pick customers from. Furthermore, the temporary profits, if any, would only be temporary and would be a greater cost to their corporate image.

Jacking up prices isn't the only potentially-negative consequence of driving its competitors out of business, nor is it a requirement to be considered anti-competitive. The history of Internet Explorer is an interesting illustration of both.

Adobe InDesign hiked in price once it was clear that Quark was no longer a real threat. That said, InDesign was a better product almost right from the start. But just sayin'

Thank you for raising this point, because it's only in this case that lower (free) prices are anti-competitive. If the company raises prices to _above_ fair market value after their artificially low prices have driven out competition then the DOJ comes after them. If they leave the product free forever, that's not a problem because it's good for the consumer.

So my question to the Google nay-sayers is do you expect Google to raise prices on Android once they have forced MS and Apple out of the smartphone market? Or do they just have a superior product model in which they can offer free software and make money on ads while their competition must charge for the software. I personally don't think they will ever raise Android prices so it's just good competition.

Google almost certainly does not intend to suddenly start charging for Android once iOS and Windows7 are out of the picture.

More likely their intention is to keep it free, but with additional "conditions" such as Google search being the only way to find information. Mandated use of Gmail, Google Docs, Calendar, Contacts. Heavily integrated Google Plus social features like chat, blog, and photo sharing.

Google won't need to charge for Android because there will not be a way to avoid a Google tentacles if you use their OS. Google is trying to burn down the ecosystems of it's competitors with free products and make money by being the gatekeeper of your every activity with a smartphone.

Don't forget that Android is open source (except version 3, but we're talking about phones now). This means that if Google decided to charge for it, they could only do so on new versions, and anybody could start from an old one, fork it and bring it further. This is completely different from free non-open-source software, where it could be actually possible to raise prices once the competition is wiped out.

No, because patents aren't a normal part of business. They're an artificial limitation by the legal system intended to promote innovation but instead are promoting senseless law suits by companies who can't/don't want to deal with normal business.

Competing in a free market is ethical. Abusing a flawed legal system is unethical. Who wins or loses is irrelevant. The issue is who is playing fair and who is cheating.

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