Class Action Reveals Widespread Overpricing Scheme of DRAM | Hacker News Reader

Class Action Reveals Widespread Overpricing Scheme of DRAM

marketwatch.com

18 pointspirocks8 comments

These lawyers are vile parasites -- they are feeding off disgusting, subjective regulation [1] that should be abolished [2] so we can all benefit from the immense advantages of fully free markets. On the one hand, businesses are held guilty of overcharging if they price their products as high as the market will bear; on the other hand they are guilty of dumping if they keep cutting their costs and lower prices below what some busybody feels is right; and on the third (hand) they are guilty of price-fixing if they charge the same as their competitors happen to charge. All options are available to the government, if they decide to manipulate, control, or destroy your business.

[1] Ten Thousand Commandments, by Harold Fleming (1951) -- https://archive.org/details/tenthousandcomma00flem

[2] The Abolition of Antitrust, by Gary Hull (2005) -- https://www.c-span.org/video/?186889-1/the-abolition-antitru...

Price fixing is not the same as "businesses are held guilty of overcharging if they price their products as high as the market will bear". The fact that lawyers will make exorbitant profit is more palatable to me than 3 mega corporation's that collude to make X times the lawyers exorbitant profit.

That's not what he said.

To summarize:

- "price gouging"/"overpricing" -- "businesses are held guilty of overcharging if they price their products as high as the market will bear"

- "predatory pricing" -- on the other hand they are guilty of dumping if they keep cutting their costs and lower prices below what some busybody feels is right

- "price-fixing" -- "they charge the same as their competitors happen to charge"

None of those are actually alleged in the complaint. Price gouging is only rarely a crime and in most definitions involves taking advantage of things like natural disasters. Charging what the market will bear isn’t the same thing at all. And more to the point, isn’t what this complaint is about.

Conspiring to fix prices is indefensible under any economic theory. If three companies who have 96% of the market agree not to compete with each other and inflate prices, that’s bad. Your grandmother and a sophisticated Econ PhD would agree.

“Charge the same as their competitors happen to charge” also isn’t price fixing. That would be parallel pricing and is entirely legal. Price fixing is as described above, conspiring together in restraint of trade. And it’s really hard to prove without a whistleblower or some very clear (repeated) pricing moves that are statistically highly improbable to have been the result of coincidence.

As for why the other 4% of the market doesn’t step up and grab the market share, some industries just don’t work like that. It costs $10 billion or more to build a chip fab and doesn’t happen overnight. It could be that the 4% player is at capacity and is selling out by slightly underpricing, but doesn’t have enough production to affect the market.

There are certainly rapacious attorneys out there. But Samsung here is a victim? Micron? If the charges are specious, they’ll sort it out in short order and the legal fees to do so won’t even cause them to break a sweat. I’ll save my pity for those who deserve it.

Do you want to be more specific? Linking to a 70 year old book and a 13 year old, 2:00 hour lecture about the evils of antitrust don't make your vague arguments more compelling. Furthermore, this is not about the government mandating that businesses only make a certain amount of profit, did you read the legal complaint?

The age of a book is not an argument against its contents or thesis.

The two books I referenced contain detailed accounts of how various companies have been preyed upon under the guise of these antitrust laws, including sending innocent businessmen to jail.

From the link: "The lawsuit, filed Apr. 27, 2018, in the U.S. District Court for the Northern District of California, was spurred by a proprietary, independent investigation by the law firm’s antitrust attorneys who determined that DRAM manufacturers Samsung, Micron and Hynix agreed to limit the supply of DRAM, driving up prices for this widely used memory."

No mention of any evidence that this actually happened. The way I read it, the only "proof" they have is that these memory makers hold 96% of the market, and that the prices skyrocketed at some point.

Of course, that leaves out what happened with the companies that hold the other 4% of the memory market.

If they weren't involved in the scheme, we would expect to see an attempt by them to increase the production of memory to take advantage of the unforeseen boom in memory prices.

And if they were involved in the scheme, why aren't they mentioned in the lawsuit?

I don't buy this claim at all. Until I see some hard evidence to explain the above, I am inclined to agree with mkempe's conclusion that these lawyers are just parasites.

How did the parent comment get down-voted 4 days after it was posted?

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