The South Korean government is currently investigating Samsung over the “unfairly low price” it is being paid by Apple for the flash memory used in iPods. Apparently Samsung is providing the chips at a cheaper price than what Korean music player manufacturers are paying. Yesterday Apple announced that it would prepay Samsung for $500 million worth of flash memory chips. I’m not sure about South Korea’s Fair Trade Commission, but it seems to me that if a company places a half-billion dollar order–and pays in advance–that company is probably going to get a cheaper per-unit price than someone buying less. It’s called the economies of scale.
By what right do those less successful competitors complain to the government? Do they have a right to flash memory chips? Can they set their own price? Do they have any legitimate say in the private transaction between Samsung and Apple?