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Comment by mywittyname | Hacker News Reader

We have to decide what part is damaging to society: the actual physical agreement, or the effects of the agreement?

If it's the actual physical agreement that's the problem - the system is working as intended.

But if we are looking to prevent the negative outcomes associated with price fixing and collusion, our system is failing us.

They are never going to find proof of conspiracy. The people involved covered their tracks, and doing so is trivial. So the best we can do is punish the appearance of collusion. And if the goal is to actually prevent harm to customers, that's a better solution anyway, since it encourages leaders of companies to behave in a manner that's the opposite of collusion.

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You'll have to create a case that harm is taking place. Harm does not mean a PlayStation 5 is now $200 more expensive or that inflation exists.

I would look at questions regarding what harm is created: Is it discriminatory? Are parts of society shutting down, and is that unreasonable? Are groups of people now unable to afford a living? Does it move the poverty line? Is that permanent? And how do you prove this is exclusively due to the price increase of tech components, and RAM specifically?

It needs to be unfuzzy in some way in order to make sense, but that's just my opinion.

I do agree prices are insane and wish for them to come down today. I liked the ubiquitous amounts of RAM any system could have. In those days, forums were also filled with how insanely expensive 32 gigabytes of RAM was, about $100 :)

> You'll have to create a case that harm is taking place. Harm does not mean a PlayStation 5 is now $200 more expensive or that inflation exists.

"Things cost more because of collusion" is always a harm. It doesn't matter if the product is maize or gold-plated haute couture, competitors are supposed to compete.

The question is, what's the best way to tell the difference between tacit collusion and just normal supply and demand?

It's not that easy, but here's a decent test: It's tacit conclusion if 1) net margins have been high for e.g. 3 years and 2) no new companies have entered the market in that period of time, or were acquired by an incumbent if they did.

Notice that this works for everything. Even if you're making luxury goods, the price may be high, but so are production costs, and there is a lower volume to amortize fixed costs over, so long-term net margins should be the same as they are anywhere else or you should see new entrants. If you don't, it's reasonable to infer collusion and leave it on the companies to prove otherwise.

>1) net margins have been high for e.g. 3 years

That breaks down for industries with long investment cycles. It takes years to build a fab, so the fact that DRAM prices have been high for 1-2 years isn't too suspicious, considering they've been burned by boom and bust cycles before.

>Notice that this works for everything. Even if you're making luxury goods, the price may be high, but so are production costs, and there is a lower volume to amortize fixed costs over, so long-term net margins should be the same as they are anywhere else or you should see new entrants. If you don't, it's reasonable to infer collusion and leave it on the companies to prove otherwise.

I can't tell you don't buy luxury goods ;)

People don't pay $10k+ for a Hermes bag because they want something that carries stuff 100% (or even 1%) better than a normal bag. They're buying it for the brand image/history. That's not something that can be replicated by a new entrant with some money to splash out on R&D or even marketing.

> That breaks down for industries with long investment cycles. It takes years to build a fab, so the fact that DRAM prices have been high for 1-2 years isn't too suspicious, considering they've been burned by boom and bust cycles before.

Indeed, it takes around 3 years to build a fab, which is why it's not weird to see this at 1-2 years. And meanwhile not only are the incumbents building more fabs, so are the challengers. CXMT and Nanya are both building fabs too. Because that's what's expected to happen when prices go up in the absence of collusion, you get more supply and new entrants.

> People don't pay $10k+ for a Hermes bag because they want something that carries stuff 100% (or even 1%) better than a normal bag. They're buying it for the brand image/history.

You're talking about Veblen goods in particular, not luxury goods in general. Veblen goods are bonkers, but they also don't fail the test, because then there will be plenty of other companies offering similar products at lower margins without the brand name, and then you don't have an industry you suspect of collusion over everyone having suspiciously high margins because many of them don't.

I see the logic in your reply, thanks :)

They've done this in the past. Between 1998 and 2002, DRAM manufacturers conspired to fix prices and were sued by the DoJ. The companies included Samsung, Hynix, Infineon, Micron, and others. They coordinated through phone calls and meetings to set prices and limit supply and that directly caused harm to consumers [0]. Curious what we get out of the lawsuit discovery, but now we only have 4 players so hopefully it will be obvious if they're playing the same game. Price fixing seems seems like the easy button when you look at the margins per product over the last couple of years.

Gamers Nexus has done a lot of reporting on it as of late [1][2].

[0] https://en.wikipedia.org/wiki/DRAM_price_fixing_scandal [1] https://youtu.be/R1jsbfouRQY?is=PZnyIjUjSK5UuGpL [2] https://youtu.be/jVzeHTlWIDY?is=PZOHQaaqb49hcBs9

>Harm does not mean a PlayStation 5 is now $200 more expensive or that inflation exists.

Yes it does lmao. If consumers can't get access to devices then they cannot be used for work or education. It's counterproductive.

How many "attention is all you need" papers aren't being written because as soon as there's a sniff of money the rabid suit and tie MBA fucks leap onto any opportunity like a dog in heat and fuck it to death.

Not directly addressing your points, but I fail to see how this whole situation can be viewed as cartel price fixing. There is no oversupply. The strange thing is that we are at the mercy of 3 corps.

> The strange thing is that we are at the mercy of 3 corps.

Wait until you discover TSMC, ASML, Carl Zeiss, Intel and AMD, or even Nvidia.

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