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Discussion of Consultant Pricing

     
1:34 pm on Jul 18, 2001 (gmt 0)

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This thread has raised a few red flags:
[webmasterworld.com...]

Does it violate the Sherman Antitrust act?

There are two different points of view on it.
1) it does because we are competitions discussing pricing. That could be viewed as collusion.
2) It doesn't because we are independent contractors. As far as I know, no antitrust violation has ever been brought against independent contractors. I view our discussion like the plumbers, electricians, or truckers unions discussing wages.

1:38 pm on July 18, 2001 (gmt 0)

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What is the Sherman Antitrust act? It sounds American - strange as it may seem, some of us live in other countries.
1:47 pm on July 18, 2001 (gmt 0)

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Every day I drive by competing gas stations and notice 2 things:

1. At any given intersection the gas prices are within a penny or two of each other.

2. Prices vary greatly between intersections.

This seems to me as everyday "collusion" by the largest corporations out there. The only difference I see is they openly advertise their prices and we don't.

1:53 pm on July 18, 2001 (gmt 0)

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I would like to apologize if I have started a thread that should not have been started.

That being said, I think that it is all in the way that we are discussing it. In the thread in question, people were not getting too many prices from each other, but the thread actually took off into a discussion of the best ways to deal with clients when discussing prices. A few people threw in their prices, but I would have to say that almost everyone had a different pricing range, and that most of the people here, like Brett said, are in fact independent contractors.

Again, I apologize if the thread has bothered anyone.

2:03 pm on July 18, 2001 (gmt 0)

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interesting info here. [lawmall.com]

(I hope that works. Was my first shot at coding a link in.)

2:04 pm on July 18, 2001 (gmt 0)

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whoo hoo! :)
2:06 pm on July 18, 2001 (gmt 0)

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I assume the Act you refer to is an American law. Would it apply if non-US members mentioned numbers? Or should we all restrict the discussion to pricing methodologies etc?

Also I'm not sure its necessarily collusion, because we're not agreeing a fixed price. I certainly couldnt charge the same as the experienced members of the forum. Nor am I really a competitor to the majority of members due to geography, I'm not even a competitor to a fair fraction of those who are UK-based, and variations of that argument could apply to almost everyone

It also seems that at least a few members work inhouse only for large organisations, optimising their inhouse web properties, and therefore arent competing for business at all

On the other hand, I wouldnt want WmW to get slapped with a court case

Are there any lawyers in the house?

2:40 pm on July 18, 2001 (gmt 0)

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If you intend to work for any company from the US it would apply to you. I'm not sure about the rest. I've got a call into a lawyer and awaiting a reply...

Nice going Travoli. hehe

(Henki - this is a different thread - the other one on the actual pricing is over here [webmasterworld.com...] )...

The other discussion on net views was split and moved here : [webmasterworld.com...]

4:02 pm on July 18, 2001 (gmt 0)

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After a short discussion, he felt we were ok as long as specific prices weren't mentioned. He was rather amazed that the topic had come up. After 30years of small business law, he'd never had an issue concerning anti-trust put before him. (Thanks RK).
5:45 pm on July 18, 2001 (gmt 0)

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>I assume the Act you refer to is an American law. Would it apply if non-US members mentioned numbers?

The Sherman Act is the US anti trust legislation. It has more teeth in it than any other similar piece of legislation anywhere. The basic philosophy behind it also forms the basis of the binding directive of the European Union regarding competition, which has been enacted into law in all member states. In Europe the legislation frowns upon discussions about business terms such as prices between competitors and if such discussions lead to action - even if taken completely separately by the participants and without an cartel-like agreement - this could lead to penalties in the form of fines. In the US, the same action would be enough to put a CEO into jail.

In the 1970ies I held an upper management position with a local subsidiary of a very big US corporation. All management, all over the world, had to sign an 20-page act of compliance of the Sherman Act put together by the corporate legal dept. One of the numerous pieces of advise made the Europeans involved sit up straight: "If you play golf with someone from a competitor, make sure you are never out of earshot of impartial witnesses, lest accusations be raised of conspiracy." This was 25 years before EU legislation and everybody thought the yanks had gone bananas.

9:19 pm on July 18, 2001 (gmt 0)

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I had a college professor that worked for a fortune 5 company (taught after work, part time) and he said that he was not allowed to even say "hello" to competeing sales persons if he knew them, for the same reason. And if they did say "hello" in the hall, he had paperwork to file afterward. Normally I would say that this was exaggerating, but this was not the type of person to exxagerate. phew!
3:44 pm on July 19, 2001 (gmt 0)

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US anti-trust law is funny stuff. We seem to penalize activities (like price collusion or bribing third-world generals) that other countries seem to accept as part of doing business. Sometimes this is bad (like when you lose the jet fighter order to someone who paid the general's brother a $5 million consulting fee), and other times good (when our unfettered market increases consumer buying power - look at Japan, for example - or keeps our businesses more productive).

Prices still get "fixed," of course. Like gas stations at the same intersection, steel companies all sell the same products at the same price. They are not allowed to discuss pricing with each other - that would be illegal. So how does this incredible coincidence occur?

It's simple. They publish their prices. If one company decides to raise prices, that firm lets the world know. Their competitors raise their prices by the same amount immediately; if one or more competitors announce that they will NOT increase prices, the first company cancels its increase to avoid losing business. Efficient and legal. In oligarchic industries, there is often a "price leader" company who usually sets the trend for everyone.

In the chaotic world of SEO, composed mostly of tiny independent contractors located around the globe, I think the probability of antitrust violations is nearly nil. The market is way too fragmented for any sort of collusion to be effective, and the targets are too small and fluid to be attractive to prosecutors. They like to go after firms like Archer Daniels Midland (fixing worldwide prices for some of their products). Besides, trying to get SEOs to agree on pricing would be tougher than herding cats.

Certainly, I wouldn't advise anyone to discuss setting the same prices in this (or any other) forum, or even doing so in any other manner. I think referring to (or even reproducing) any public pricing is probably fine, but I'll defer to Brett and his legal advisors as far as the limits he sets for posting here.

7:52 pm on July 19, 2001 (gmt 0)

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all of us agreeing on price is like all of us agreeing on cloaking! So, I guess a guild or union is out of the question too. ;)