Regarding the legality of discussing pricing

Before I trype anything else, I should say that this is not legal advice, and I am not a lawyer by any stretch of the imagination. I am not suggesting that any do (or refrain from doing) anything based on my words... which are merely opinon.

The position of FK's administration is that pricing is not to be discussed on this forum. While that is a perfectly reasonable policy that we all should adhere to, the comment has been made (over and over) that dicussion of pricing amongst members of a profession is illegal in the US.

The reason for the question of legality is that such discussions raise the question of price fixing. From the research I've done, it seems that in order to establish a discussion as an attempt to engage in price fixing, there are a two key tests that need to be satisified.

1. The determination of whether the discussion of price was with the intention of altering pricing based on the discussion.

2. The determination that a significant percentage of industry professionals were involved in the discussion.

The second test is the one that is of particular interest to me. First, we need to define what our "industry" actually is. If you go by the business codes provided by the IRS, you'll not find a "web developer", "flash developer", or any other specific type of media developer industry. It seems that we are lumped into one of the computer sciences or general media categories. Since we are part of a larger industry, there is real question as to what percentage of the industry we are part of is represented here at FK.

If you take the thousands upon thousands of professionals in any of the given categories we apply to, it quickly becomes apparent that we are not a significant percentage. If you reduce that to those who are FK members, it would seem that there would/could not be an adequate percentage of the industry participating in the discussion to establish a case of price fixing.

All that said, we should still respect FK's policy of not discussing pricing, but we should understand that such discussions may not be an automatic case of price fixing.

Thoughtful discourse is always welcome, my friend. :)

You make excellent points. This is a fairly grey issue, however. (as you so eloquently illuminated for us) Grey in the sense that it is difficult to say with any great certainty exacty what qualifies as price fixing and what doesn't. Although I might personally agree with you regarding the percentage of people who will actually be involved in the discussion or could possibly just come across it while browsing, I think it is simply in Jupiter Media's best interest to stay on the safe side of legality by avoiding the issue altogether.

It is unfortunate, since I know how hard it is to find this type of information. The act of providing information on how much people charge for various services would immediately bring into play your key test number one, however. The fact that someone is asking the question implies and is often indicative of a need or desire of an artist or designer to 'fix' a price that can be presented to the client. What this results in is one or many designers 'fixing' the price of their services as it relates to new designers, thus starting a trend that leads very quickly to a detailed pricing structure that has been agreed upon by a significant number of people who are tied to the field in question. Otherwise known as price fixing. :)

It's a tangled web and I think 'The Powers That Be' just don't want to open that particular nest of vipers.

Well if you are looking for fair pricing, dice.com, which specializes in technology jobs, has a tool that shows average hourly rates by profession and years of experience, legally or otherwise. I suggest you (those looking into what to charge) look into that. That way we can avoid "collaborating on price fixing" here. ;)

The issue on fixed pricing, i would like to believe (though of course this is my opinion) is giving all developers a fair chance in getting a job. If all developers were more or less into the same pricing pricing range, this would make the market more competitive and thus deliver more quality materials.

In one thread, pricing and competition was discussed throughout varying cultures. It may be common knowledge, that some third-world economies are now selling thier wares in the global market, at a price westeners wouldn't even think about.

If i lived in the US, who would my probable clients be... compared to say if i live here in the Philippines? The thing is, developers in third world countries, can easily get foreign clients because the price they give is far less than what their western counterparts are offering. To you, US$1000 may not be much for a 2 month full flash website but that's a whole lot to us.

So what should we do about it? Should we just let it be? Would developers lower their prices just to compete with the east? I think the idea of "fixed pricing" would somehow put a minimum limit to developer's prices depending on where the client resides, which would give fair competition to all developers.

So If i make websites for US$1000 here in the Philippines, I can't approach a US-based client with the same price, but i have to follow the "fixed" minimum price, based on your standards. At this point, quality of work will start to become the issue... which is really what counts.

Of course, i know this is a long shot.... but i just think it would be great. Fair pricing... regardless of location or culture. If you sell here... you have to follow our rules. Something like that. And again, this is just my opion. :)

Unfortunately the so called 'Third World' is not competing on the same table as the so called 'First World'.

Many(Not All) third world developers and companies use illegal/pirated/stolen copies of software to produce their work.... some cleanse the work through one legitimate copy of software (supporting hundreds of illegal copies).

I'm not saying this is unheard of in North America/Europe ... but its much less frequent in occurance.

The economies are unfortunately not equivalent in any realm of understanding or experience.

First world developers are angry when they see work run away to another country where hard working people on the edge of poverty (by a First world standard) cheat the developer out of a contract due to much lower operating costs. (Zero cost software etc...)

The third world devs see this as a personal opportunity to rise up the ladder to success. (A good thing) After all in a country where $5000 US a year is considered a very healthy living a $1000 contract is a heavensent opportunity. (Too bad that the software packages going into it would have cost several thousand per workstation to buy)

Now the wish/hope is to sell Third world (but quality) product just below the price point of a First World developer (to maximize product).

As to the US regs on pricing comparison... they mean nothing to dev's outside the USA and are virtually unenforceable inside the USA. If you want to know what the market is pricing things at ... get someone to get a quote from a compeditor. Look on the job boards and add at least 20% (the listed price for the service is just a starting point for negotiation)

Hi Orkar,

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Many(Not All) third world developers and companies use illegal/pirated/stolen copies of software to produce their work.... some cleanse the work through one legitimate copy of software (supporting hundreds of illegal copies).

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Yes, that is very unfortunate, and sad to say true.

Where cost of legal software in third-world countries is way beyond the budget of the average developer (assuming they receive a monthly salary of about US$300, and the cost of, say Macromedia Studio 8, is around US$1200), most developers rely on illegal software copies. Only a handful of companies or individual developers who do business off-shore set budgets to purchase legal software.

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First world developers are angry when they see work run away to another country where hard working people on the edge of poverty (by a First world standard) cheat the developer out of a contract due to much lower operating costs. (Zero cost software etc...)

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Assuming that 3rd-world developers use legal software, i don't think it would change a thing because development costs also take into consideration where the developer resides, in terms of labor costs and the cost of living. Either way, 3rd world prices will still be much lower.

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Now the wish/hope is to sell Third world (but quality) product just below the price point of a First World developer (to maximize product).

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Not a below the price point, but at par. So that product quality will determine the winners while pricing shall remain in the background.

And yes, it is hoped... and wished, that something like this will happen. There are no laws or regulations... but i wish that it could start somewhere. If not, then first world developers will always be on the lookout for that 3rd world guy who can do the work at rock bottom prices.

Unfortunately the piracy issue teaches the lesson that if I have a disadvantage given the other compeditors I may now Beg, Borrow or Steal to accomplish the goal of winning the contract.

To create a parallel not in the software industry say someone ran a successful Taxi service in my city. They have vehicles, insurance and licenses they bought from the municipality to conduct their business.

Now as I am not as rich as the Taxi service owner... and come from say the poor side of the tracks (less affluent area of town).

Am I not justified to steal the new cars in town to be taxis, ignore the insurance policies that the taxi service pays and laugh at the concept of licensing with the municipality.

Somehow this attitude of steal to compete is prevalent in the software contracting industry. The only people who are not permitted to 'beg, borrow, steal' are the first world developers and companies. The self-same market that 90% of the paying work is produced for.

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Originally Posted by Orkar

Unfortunately the piracy issue teaches the lesson that if I have a disadvantage given the other compeditors I may now Beg, Borrow or Steal to accomplish the goal of winning the contract.

To create a parallel not in the software industry say someone ran a successful Taxi service in my city. They have vehicles, insurance and licenses they bought from the municipality to conduct their business.

Now as I am not as rich as the Taxi service owner... and come from say the poor side of the tracks (less affluent area of town).

Am I not justified to steal the new cars in town to be taxis, ignore the insurance policies that the taxi service pays and laugh at the concept of licensing with the municipality.

Somehow this attitude of steal to compete is prevalent in the software contracting industry. The only people who are not permitted to 'beg, borrow, steal' are the first world developers and companies. The self-same market that 90% of the paying work is produced for.

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So are you saying that it is acceptable for third-world designers to steal and ignore all manner of regulation simply because they are at some kind of disadvantage? What kind of craziness is this? Just because someone has more of something than I have, that makes it alright for me to take it from them? What kind of reasoning is that?

I think the concept of "begging, borrowing, and stealing" should not be taken in it's literal sense when talking about competition.

If a competitor has an advantage, what can you do? Offer more services? Lower your price? Or go "under-the-table?"

"Stealing" or "Begging" in order to win a contract equates to "giving favors." Kinda like, "I will give you 10% of the budget costs if you can get your boss to give me the contract." or maybe "Your supervisor is my Uncle, and i know he would be upset if i don't get the contact." It gives an unfair advantage.

Everywhere you go, it is "illegal" to do this... but still, some developers, whether 3rd world or 1st world, practice this just to get the contact. And what happens next? you get the contract, but your reputation sucks. It would seem that you don't believe in your own products. And i would think that people like these are desperate. If you can't get clients to buy you products through "normal" means, then forget the business and do something else.

The thing is... before anything else, clients look at the price. If you have a reputation established, then they get you no matter, as long as it's within their budget.

Think of it like this:

Expensive Shopping Centers vs. Cheap Flea Markets

Who goes to the Shpping centers? Middle to Upperclass?
Who goes to the Flea Markets? Lower to Middleclass?

Can the upperclass shop at fleamarkets? Yes.
Can the lowerclass shop at shopping centers? Too expensive.

fleamarkets have more possible clients because of the price.

Shopping Centers = First World Developers
Flea Markets = 3rd World Developers

Lower, middle, and upperclass = clients

So unless a miracle happens and 3rd world countries start "standardizing" their prices with the first world, you can expect a couple or so clients lost once the 3rd world guy comes into the room.

Kickbacks are hardly new nor do they give one a long term advantage to the content producer. Unless you've got a golden parachute contract.

I worked in an industry that was plagued by kick backs. Usually the puchasing handler doesn't pull 6 figures. Someone comes in and wav's sports tickets in front of him or a few other goodies. If he's weak enough he'll bite even if he can afford to buy the tickets for himself. Usually if there are extended purchases their are "unforseen price hikes added on at a later date. The goods recieved do not match the quality of the first sample work. It's a raw deal for the actual client. and very often a purchasing agent will be sent packing Whence he goes so does all the vendors he deals with.

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Originally Posted by RUSHVision

So are you saying that it is acceptable for third-world designers to steal and ignore all manner of regulation simply because they are at some kind of disadvantage? What kind of craziness is this? Just because someone has more of something than I have, that makes it alright for me to take it from them? What kind of reasoning is that?

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Somehow, :rolleyes: you missed the point, I was complaining about the situation in a sarcastic manner. Perhaps re-read the original post with that in mind.

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Originally Posted by Orkar

Unfortunately the piracy issue teaches the lesson that if I have a disadvantage given the other compeditors I may now Beg, Borrow or Steal to accomplish the goal of winning the contract.

To create a parallel not in the software industry say someone ran a successful Taxi service in my city. They have vehicles, insurance and licenses they bought from the municipality to conduct their business.

Now as I am not as rich as the Taxi service owner... and come from say the poor side of the tracks (less affluent area of town).

Am I not justified to steal the new cars in town to be taxis, ignore the insurance policies that the taxi service pays and laugh at the concept of licensing with the municipality.

Somehow this attitude of steal to compete is prevalent in the software contracting industry. The only people who are not permitted to 'beg, borrow, steal' are the first world developers and companies. The self-same market that 90% of the paying work is produced for.

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