Although in this case it's probably impossible to define, given the complexity of calculating the true cost of tokens.
No.
Dumping is an international-trade term. It doesn’t even require pricing below cost, just aiming “to increase market share in a foreign market by driving out competition and thereby create a monopoly situation where the exporter will be able to unilaterally dictate price and quality of the product” [1].
Loss leaders are common in commerce and entirely legal, as are free trials. I struggle to think of a competent jurisdiction that bans them.
Russian laws officially use the term "monopolistically low prices", and prohibit them if the entity engaging in such pricing holds a dominating presence in the market (and not necessarily for the goods that are being underpriced).
A correct term for the US is "predatory pricing", and it's also prohibited by the Sherman Act. For much the same reason, a large entity can destroy competition by accepting losses from selling goods below the cost. The border between loss leaders and predatory pricing is, as usual, very blurred.
Oooh! Do you have a recommendation for a translation of a Russian economics text? I’m particularly curious of Soviet-era texts that work on theory without prices.
> correct term for the US is "predatory pricing", and it's also prohibited by the Sherman Act
Sherman prohibits the “restraint of trade or commerce” [1]. The word “price” never appears in its text. In practice, predatory pricing is a tightly-regulated term that doesn’t generally prohibit selling goods below cost
[1] https://www.govinfo.gov/content/pkg/COMPS-3055/pdf/COMPS-305...
I don't think they exist? The Soviet Union used prices internally as an accounting tool. It essentially had two separate currencies: the actual physical currency that regular people owned and the virtual "accounting" currency. The accounting currency could not be converted into the real one, except for salary payments that were tightly regulated.
Once the USSR allowed some inter-conversion channels in the early 80-s its economy predictably got blown up as a result.
> Sherman prohibits the “restraint of trade or commerce” [1]. The word “price” never appears in its text. In practice, predatory pricing is a tightly-regulated term that doesn’t generally prohibit selling goods below cost
The Sherman Act is a framing law that establishes the authority to regulate monopolies, and it's on purpose rather vague in its wording.
A more concrete law here is the Robinson-Patman Act, which prohibits illegal price discrimination, including pricing substantially similar goods differently for different purchasers.
Arguably, yes.
Should Microsoft have not been allowed to sell operating systems and still survive from selling BASIC interpreters? Should Nintendo have not been allowed to sell video games and still be selling playing cards?
Every company that is interested in survival takes profits from an existing business to start a new one,
Toyota shouldn't have to sell their first new car off the line for 100 million to pay for the entire manufacturing line.
Your first SAAS customer shouldn't have to pay back all your costs.
Can you plan to break even after your first month of sales? first year? 10 years?
What about OpenAI?
In other countries, selling a $7 chicken if it's subsidized by the sale of other goods can indeed be illegal.
It seems like you havent thought this through at all.
This isn’t even vaguely similar to illegal tying. The biggest problem being that the products almost certainly aren’t dissimilar enough to be considered “tied” at all.
Second, that’s not what dumping means. It’s a specific term for international trade.
Third, it’s not illegal to sell something for below the cost to make it. That’s another common misunderstanding.
