Herbert Dow, the Monopoly Breaker (1997) | Hacker News Reader

Herbert Dow, the Monopoly Breaker (1997)

mackinac.org

55 pointsswampthing11 comments

This only worked because it was a commodity that could be resold without much extra expense, and the cartel wasn't willing to sell at a loss everywhere. Great history lesson!

That, and in the US (and many other countries), we also now have government protections against price dumping [1]. Not to say it doesn't still happen, but there is some recourse.

Regardless, a good read.

[1] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)#Actio...

if there were anti-dumping policy then Dow would not have the way to profit off those monopolies. strange how sometimes government control can forbid such clever ingenuity as Dow employed in this situation.

good thing that didn't happen in today's culture - I'm sure his competitors would have sold the chemicals along with a no-resale clause in the contract...

I'm a kid who went to Herbert H. Dow High School in Midland, Michigan. Then I went on to study Chemical Engineering at the University of Michigan in the Herbert H. Dow building. I'm very proud to see this story on HN. There is a (seemingly) out of print book called "The Dow Story: The History of the Dow Chemical Company" if anyone would like a more in depth view of the "bleach wars" and other ways that Dow took on the entrenched German companies.

Great story! Actually shows that monopolies can even be broken without the intervention of government.

Shows that they could in the early 1900s. These days the specific formulation of bromine being sold would be patented (even if they had to modify the formulation every 17 years) and Dow would be sued for patent infringement on the resales.

Actually, no they couldn't. Patents only apply to the right of "first sale". You can resell any patented invention without the consent of the patent holder.

I think you're confusing the first-sale doctrine with exhaustion doctrine, and the latter is, I think, a bit more confusing and unclear as to what patent holders can require.

You beat me to the reply...

Firstly, IANAL(!)

Secondly, I do follow the sorts of IP law cases that tend to show up on HN as an interested non-legal observer because I think IP law is one of the most dangerous problems the US tech industry faces, even though the industry is the thing that is fucking itself most of the time.

However, from what I understand while the exhaustion doctrine has been upheld for international copyright law recently by the Supreme Court, the same court refused to hear a vaguely similar case as applied to patent law (and the defendant was on the ropes and forced to settle). So there are still quite a lot of open questions about exhaustion doctrine as it applies to patents, especially when international trade is introduced, and also when the original supplier preemptively imposes restrictions (such as the "not for resale" that would certainly be on the packaging of any chemicals sold today). One mitigating thing that might help in this situation though is that price-fixing is often viewed as a situation where such resale restrictions can be found to be invalid.

So, basically this is all really muddy and not entirely decided (exhaustion doctrine is just common law to begin with) and there's no yes/no answer as to whether my half-sarcastic statement is valid, but we do live in a world that is very different than the early 1900s in a lot of ways, many of them for the better, but some of them for the worse.

Predatory pricing is a very poor way to maintain a monopoly.

In the best case scenario; unless you can buy your competitors assets when they go out of business, someone else will be able to jump in and compete with you at an extremely low cost of entry by buying the assets of your competitor for pennies on the dollar.

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