An entire (sub)industry being predicated on fraud doesn't make it not fraud, and doesn't make it okay. If you can't actually sell that capacity, just say up front what you're actually selling people.
You go with Hetzner knowing you’re getting bargain prices, so they’re cutting corners somewhere. This would be like saying Walmart are committing fraud when it turns out their ham is not “finest quality”.
Just to be pedantic, without disputing your broader point about what customers should expect:
Phrases like "finest quality" are known in marketing as "puffery" and companies aren't liable for these claims. From a quick search, specific factual claims like "unlimited 1Gbps" might be held to a different standard, depending on whether "no reasonable person" would take the claim seriously.
> The Second Circuit explained, "Puffery is an exaggeration or overstatement expressed in broad, vague, and commendatory language. Such sales talk is considered to be offered and understood as an expression of the seller's opinion only, which is to be discounted as such by the buyer."
> One type of puffery is a non-specific claim that one product is better than another The Second Circuit explained it as, "a general claim of superiority over comparable products that is so vague that it can be understood as nothing more than a mere expression of opinion."
> Looking at Starbucks's advertising, the court held that statements such as, "Best coffee for the best you," "taste of inspiration," "Starbucks or nothing," and "heart, soul, craft, pride, love; you won't find that in any other cup of coffee" are all puffery. The court wrote, "These statements vaguely assert that Starbucks's coffee is better than its competitors' in a manner best "understood as an expression of the seller's opinion only." They aren't, the court said, specific enough to "misrepresent an inherent quality or characteristic of the defendant's product."
https://www.lexology.com/library/detail.aspx?g=ac3f3d65-2e97...
“We’ll of course they are cutting corners!” doesn’t seem like a defense at all to me.
If the sales page says "1 gigabit unlimited", I don't care about any other considerations. It either is or isn't "1 gigabit unlimited". If any part of that statement is untrue, then the the provider should be honest and say so.
I'm so fed up with the normalization of this slimy behavior.
The way I see it, this conduct is antithetical to the spirit of the free market and harmful to society at large, regardless of whether or not it can be defended in court.
'Fraud' is too strong of word. Almost everything in the world has some level of over-subscription. I don't know for sure BUT if every person and business turned all their water taps on full blast, I think we may have a problem.
Words are tools to convey information, if you label everything as fraud, that 'tool' is no longer useful.
heztner and OVH and other bottom of the barrel pricing hosting companies are their own special breed of thing.
you're not going to get for $40-50/mo what you would get for $250/mo.
their TOS/AUP almost certainly covers this (you think that a company the size of hetzner didn't run this by real legal experts first?). it's not fraud.
Overselling capacity is perfectly fine if most of the time* you go to use the capacity it's there for you. If 95% of users under use capacity and you have the stats for it, it's perfectly reasonable to oversell sell with respect to the expected capacity usage. If those stats change, sure - they should adjust how much they oversell or what they advertise.
It's the same way a bank can't handle everyone pulling their money out all at once. It's perfectly reasonable to plan around practical scenarios.
Now if you rarely get what you paid for, sure, go for their heads over it.
* for some definition of most of the time aka get SLAs