Earlier quoted context omitted.
It is literally anti-competitive, bad for consumers and competitor startups. How can an average startup compete if a rich company or VC backed startup has a business model of selling below cost to get market share? The fact that the big players are doing it makes it an oligopoly not a monopoly, but that's still bad. This is a 100+ year old problem and has already been solved in other industries, but tech likes to thi…
> raised prices when those competitors folded This part only works if you don't have other large competitors. But this obviously not the case for cloud storage. It is an extremely competitive commodity product. > bad for consumers How exactly is it bad for consumers to get products below cost?
Because it is necessarily a short term strategy, and when the subsidy ends, it is incredibly disruptive (in the bad way).
It is good in the short term for those consumers who get in early and get their consumption subsided by VC funds or FAANG profits from another subsector. But it is bad in the long term for everyone when firms try to compete by selling below cost. Consumers usually win when companies have to compete with each other. But selling below cost is a strategy that only very rich or entrenched players can do. It means you have to play the VC unicorn game as a startup. It sets unrealistic price expectations for consumers. It leads to situations like this when the rug is pulled.
Look what has happened with ride sharing and delivery apps. A few rich VC backed firms took over the market and subsidized cheap rides. Entire industries were transformed, and most restaurants stopped offering delivery themselves. Now, it is becoming clear that those $5-7 rides actually cost 2-3x that, and that's not what people are willing to pay.