Gadgetory

price fixing can best be described as an agreement between entities to literally lock prices to a certain level the FTC it's the Federal Trade Commission characterizes it as an agreement among competitors that raises lowers or stabilizes prices or competitive terms this next part is important generally the antitrust laws require that each company established prices and other terms on its own without agreeing with the competitor when consumers make choices about what products and services to buy they expect that the price has been determined freely on the basis of supply and demand not by an agreement among competitors so the FTC links price-fixing to antitrust laws which were set up in the United States to avoid external collusion between entities producing consumer goods and while random access memory may appear niche on the surface I mean it's not like milk or bread or something you need to survive it's still a highly demanded product driving massive revenue streams for companies like Samsung hynek's and micron it's important note that these three companies share between 90 and 95 percent of the DRAM market and therein lies the problem you see memory manufacturers in a perfect competition model which we should note it does not exist but we use it as a reference point attempt to meet the demands of the consumers by supplying a sufficient number of modules per month demand drive supply and if supply isn't met a window of opportunity emerges for competing firms to intervene and start producing on their own those savvy and economics might raise a point here though and the perfect model all RAM prices are the same as long as all RAM itself is the same so what's the difference between this assumption and what we're seeing play out in 2018 about prices being so high but equal and to that I say it's from where the prices are derived in the perfect model supply and demand determine price not companies supplying the goods Ram prices jumped nearly 50% in 2017 we've heard several excuses including but not limited to R&D and while this certainly plays a part it doesn't explain my supply for current node modules fell with respect to demand by the end of 2017 and why prices rose by a disproportionate amount mind you the same year companies tend to separate Rd and manufacturing facilities anyway I mean isn't the revenue from your manufactured goods supposed to finance at least part of your research and development now seriously I want I want the big company stands for that question with the research I've done admittedly not the most thorough but it's nothing at the point across these companies are repeating almost exactly what occurred in 2006 which not many people are talking about surprisingly when a 300 million dollar settlement between memory manufacturers and consumers was reached Samsung and hynek's in particular pled guilty and collectively paid over 700 million dollars in criminal fines today things are looking pretty redundant not even the Chinese government that's censorship China for you could turn a blind eye to the obvious collusion when several drm manufacturers meet supply quotas year after year and then suddenly don't we've got a problem you see if it was just one company right things would be much much different maybe they just had a bad year maybe a manufacturing facility burned down there always outliers not only would there be no price fixing but the company failing to meet demand would lose out on potential profits which is not what they want that's the marginal profit per customer served so the workaround is this scheme with competitors to fix prices regardless of supply and demand trends in capitalistic markets this is illegal it infringes upon the consumers rights to fair and equal opportunity in fact it strips all buying power from the consumer so let's extend this analogy to something a little more hands-on we would consider cars pretty necessary right I mean if you can afford one you're gonna want one and you might not need cars in all countries so even developed countries don't need cars but if you want to keep up and most of them you got to have a set of wheels same goes for RAM you might not need a computer but it certainly helps and your PC is gonna need around so if you showed up to a Chevy dealer in search of a solid 8 cylinder coupe like a Camaro and they told you that the price of that model started at 75 thousand dollars you'd probably get the heck out of there right a base compared today starts at 2530 K and that is something that you're gonna keep in mind when you show up to the dealership and then you find out that it's just so much more expensive than it should be the buying power that consumer retains is his or her ability to choose based on price and availability and even if a few assumptions and our perfect competition model are broken most buyers have a pretty good idea of how far their dollar can go 75 K is just too much for a base level sports coupe from a company like Chevrolet not hating on their stuff I love me some 6.2 liter action but you know who else is a powerful v8 Ford and even if I prefer Chevy I'm probably gonna break brand loyalty constrains it means saving 30 grand for a comparable model in comes price-fixing you show up to the Ford dealer only to find out that their v8 Coupe starts at 75 k2 but prices for these cars were like 50% lower just a few months ago and company after company you find a similar trend regardless of the base price or model all cars of shot up 50% in price notice I said price and not valued there these are artificial prices they're just food natural prices are based on supply and demand curves set intrinsically by both buyers and sellers but when companies team up in price fix especially at higher than normal prices the consumer loses bargaining power that's the ability to choose for nearly a year now consumers in the PC market have had to deal with these extremely high RAM prices if you want a computer and can't find anything that's basically used or marginally discounted in a pre-built PC you'll have to absorb elevated memory prices meaning you'll have to pay that extra cost it isn't your fault and there's nothing you can really do about it and that's what sucks look folks I'm not one to scream government intervention anytime I see a problem with the products price I'm not that entitled when it comes to the free market I tend to emphasize the free part if Chevy alone decides to raise all of its car prices by 50% I'd say let them do it they'll sync themselves there are plenty of alternatives if they were instead a monopoly which I talk more about right here with regards to graphics car prices then we'd have a problem what Samsung hynek's and micron have done is create an oligopoly that's the state of limited competition it's not illegal in the United States just look at the cell phone industry but it opens the door to many shady things including price collusion so if 2018 any repeat of 2006 I expect we'll see a verdict or two at some point with these class-action lawsuits at which point prices should begin falling but this is these court cases take a long time you know I mean and companies getting smarter they're finding ways to collude without leaving data trails and a firm can't be indicted without data trail see what I mean so it's a mess RAM prices or a mess a geeks today cost more than twice what 16 gigs did two years ago and it's just it just leaves a foul taste in the mouth this is the dark side of big business we're feeling it firsthand our fates rest in hands of a few judges juries whistleblowers and anyone else who can make a case against these people it's just a helpless feeling when you want to build a PC and you find out that one of the most expensive components today has to be RAM when it wasn't the case two years ago I mean that Ram was just something you had to add on but you never really thought much about it because it wasn't too expensive relatively speaking but now it costs almost as much as a CPU if you want 16 gigs in most builds and that to me is just a little ridiculous so I want from you guys in the comments below if you liked this video let me know give someone a thumbs up I appreciate it thumbs down for the opposite you can sponsor us with that sponsor button or you can subscribe to get more on notifications and videos like these go live I appreciate that the belt notification icon by the way that's something that just makes YouTube a pain to deal with sometimes but if you want to click that as well you will get notified personally when videos like these go live most of the time again YouTube is slightly broken right now this is science to do thanks for learning with us