So the issue is the same as Anthropic. They do charge for it though their API. The users, however, want to use the discounted "unlimited" flat rate through the first-party app instead, then get mad when they are told they have to use the same API every other third-party app does.
No, the problem is that the discounted rate exists in the first place. Essentially these are unfair business practices, product cross subsidization to ensure market dominance. See also: Microsoft and a whole bunch of other companies.
And once they've got their monopoly position there is inevitably the rug-pull. I wonder if some CPO somewhere actually had the guts to put a 'rug pull' item on the product roadmap.
It's not unfair its how every business works. When your product is new or not yet good enough and you want people to try it you give them discounts, or if you want to drive traffic to your service you also do the same.
Even traditional businesses do this with coupons. Is it unfair that Costco sells chickens for under cost because it drives usage to them?
Companies like Uber did use massive funding and price subsidization to try and kill competition and then take a monopoly, but it is hard to assert that this is what google is doing now. And given that other competitors in the space, Anthropic are doing the exact same thing again its not as though they are alone.
Also they could be subsidizing it because they want that usage type as it helps them train models better.
Chatgpt and gpt4 were all ran at a loss and subsidized people just didn't know that. Almost all of the llm companies have been selling 1 dollar of llm compute for 50 cents as they valued the usage, training data, and users more than making profit now.
This next generation of MOE and other newly trained models. Like opus 4.6, Cursor Composer 1.5, gpt 5.3 codex, and many of the others have been the first models where these companies are actually profitably serving the tokens at the api cost.
This year has been the switch where ai companies are actually thinking of becoming profitable instead of just focusing on research and development.
Hmm, you might be right. I'm reading the forum thread linked in the OP.
> ”Thank you for your continued patience as we have thoroughly investigated your account access issue. Please be assured that we conducted a comprehensive investigation, exploring every possible avenue to restore your access.
> Our product engineering team has confirmed that your account was suspended from using our Antigravity service. This suspension affects your access to the Gemini CLI and any other service that uses the Cloud Code Private API.
> Our investigation specifically confirmed that the use of your credentials within the third-party tool “open claw” for testing purposes constitutes a violation of the Google Terms of Service [1]. This is due to the use of Antigravity servers to power a non-Antigravity product.
> I must be transparent and inform you that, in accordance with Google’s policy, this situation falls under a zero tolerance policy, and we are unable to reverse the suspension. I am truly sorry to share this difficult news with you.”
I totally read that (and the other posts in that forum) as a complete suspension of their whole Google Account (another person mentions their GCP access suspended).
But I could be reading it wrong and it's just their AI account (and any service that uses that... I'm not clear on where those boundaries are?)
Still not going to risk signing up for this, because I cannot risk my Google account getting suspended or banned for something I wasn't aware of in the ToS. No warnings is still drastic, even if it's just part of the account.
This is a really weird response man. No need to get so judgy and personal.
Besides, as far as I can tell what they said is true. The users are losing access to Antigravity, not to their entire Google accounts. So you’re getting mad at this guy just for stating facts.
> Essentially these are unfair business practices, product cross subsidization to ensure market dominance.
Offering a different discounted rate for a service, though their first-party platform is not an unfair business practice whatsoever, though. The bar isn't what you disagree with, or what you think their motives are without any substantial proof. They could even make a honest argument that they can aggressively key-value cache default prompts from their own software reducing inference costs.
>See also: Microsoft and a whole bunch of other companies.
> Offering goods or services below the cost of their production is often illegal, though. It's called "dumping"
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.
I'm sorry, my fault. I studied economics in Russia, and the term "dumping" was used in a more general sense as "selling goods or services below their cost".
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.
> I studied economics in Russia, and the term "dumping" was used in a more general sense as "selling goods or services below their cost"
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
> 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.
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.
They also had 'hard' money and a fictive exchange rate between the 'hard' (Western) currencies and the internal one. And a whole machine dedicated to obtaining as much of this hard money as possible without returning anything of real value for it.
So every company that is not immediately selling enough to cover its fixed costs and its variable cost should be illegal? Every company and every new initiative must be profitable from day one in your world?
So that means for instance it was illegal for Netflix to get into the streaming business or for Apple to start selling iPods because neither could do it profitably from day one?
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,
This isn't typically an area where laws and regulations can work effectively because who knows until after the fact? Taxation laws do deal with this from a different perspective, for example most jurisdictions won't let a company take losses every year forever, as they judge the intent of a corporation. Even this is incredibly complex so I'm not sure how your idea would work, even the term "break even" doesn't have a clear definition, ex: do Capital assets still depreciate the same in the AI world? When did Amazon start to break even? What if they didn't deliver shopping on top of aws? Was that an unfair subsidization?
Amazon doesn’t for the most part deliver shopping on top of AWS.
Amazon runs two sets of infrastructure “CDO” and “AWS”. It’s a myth that Amazon used excess capacity to start AWS. AWS was always built out as separate infrastructure outside of AWS.
Some Amazon services do run on AWS. But when Amazon runs workloads on AWS, for internal accounting, they are considered a customer.
Forget about Costco, if some people here are so convinced this behavior is illegal they should be going after every fast food company that offers anything like "get a free/cheap xyz with any drink purchase!" Where the subsidy is obvious.
Costco gets to sidestep a lot of regulations because they technically are a private club with paid membership. The US anti-monopoly laws are also unusually weak.
In other countries, selling a $7 chicken if it's subsidized by the sale of other goods can indeed be illegal.
That would most likely be illegal in Finland. You're not allowed predatory pricing. And the same is true for the EU as a whole, although you may have to be operating in an international market, not just a local one. See Abuse of dominance in: https://en.wikipedia.org/wiki/Article_102_of_the_Treaty_on_t...
So if I could charge less for chicken because I use that as a doorbuster to get you inside the store, but I charge more for other items, that is predatory pricing and against US law?
And in this case the subsidy is paid for by tied sales from other users that don't actually use the service, which is another illegal business practice.
Tying is typically perfectly legal in both the EU and the US.
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.
What are you talking about? Where is this illegal? It’s common to sell subscription services and then price them according to expected usage blended across the user base.
First of all, I doubt they’re losing money in inference. Even across subscriptions. This is a tired argument that has been repeated so many times on HN.
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.
"PAYGO API access" vs "Monthly Tool Subscription" is just a matter of different unit economics; there's nothing particularly unusual or strange about the idea on its own, specific claims against Google notwithstanding.
Of course, Google is still in the wrong here for instantly nuking the account instead of just billing them for API usage instead (largely because an autoban or whatever easier, I'm sure).
I am afraid of using any Google services in experimental way from the fear that my whole Google existence will be banned.
I think blocking access temporarily with a warning would be much more suitable. Unblocking could be even conditioned on a request to pay for the abused tokens
Just because all you can eat buffet exists doesn't mean that the food is free or you can take away the food. The food exists in discounted rate only if you consider it unlimited food. For normal folks they make profit.
Claude code could possibly make profit because the average usage doesn't come close to exhausting the limits.
This exactly.
I'm using 10% of my max plan on the weeks that I'm working a lot. Hit a 4-hour limit once over few months and never let it run overnight. And I'm very happy with my subscription
There's nothing wrong or illegal with subsidizing products and that's not what Microsoft or others have gotten in trouble for doing. It's when they tie a strong monopolistic position (Windows) with bundling to prevent competition (Internet explorer). This is how Apple has operated with far tighter bundling and cross collateralization of their ecosystem without facing monopoly allegations. Google does not have a monopoly position in AI.
Its called economies of scale. When they server 200000 ai subscriptions they dont expect everyone to use the max. They expect some will use more and some will use less and at the end of the day it will even out. Thats how every service works that is for the masses. As soon as you want a guaranteed 1000 tokens you should pay for that.
> So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?
If it makes it impossible to set up a competitor? Absolutely, yes.
> Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?
Netflix was not priced below the cost of production from the beginning. You're confusing sustainable pricing and paying off all the capital spending immediately at launch.
I'm not familiar with their originals economics, but the original streaming Netflix was not priced below the cost. As evidenced by them keeping the same subscription cost for years.
How is that “evidence” of anything? The “evidence” that they were charging less for subscriptions than it cost to run the streaming service is that they were borrowing billions of dollars to both license content and create new content over the course of years.
So now a business shouldn’t be able to borrow money either to start a new initiative? Should they have instead charged customers enough from day one to fund growth? So the first 1000 or so customers should have been charged enough so they could spend an extra $16 Billion?
A “bit” more expensive to cover $16 billion of expenses?
So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing? Were they going to charge their first 10,000 customers $100,000 a year so they could fund development without either borrowing money or take it from existing businesses?
Yes? Netflix had 20 million subscribers in 2010. At additional $50 per year per subscriber, that's $1B a year. More than enough to be profitable with regular loan financing at market rates.
> So how would that have helped smaller competitors? Where were they going to get the money from to compete if not other lines of businesses or borrowing?
By borrowing at market rates and pricing services to cover the loan payments.
You're actually making a good argument why cross-financing should not exist at all and that we all would probably be better without it.
So exactly what’s the difference between “predatory pricing” and pricing to gain customers and market share? Should Sony have to sell the first PlayStation off the line at $2000 (making up a number) so it can sell it at a marginal profit from day one or should it sell it below cost knowing that that over its lifetime if it stays at that price, it will both gain customers and sell at a profit in year 4 as the price of technology comes down and it gets economies of scale?
The EU uses an effects-based model. If below-cost prices are driving other actors out of business or has other anti-competitive effects, it is predatory pricing.
I’m sure that developers who work for boring old enterprises who make twice as much their EU counterparts would disagree. Let alone those working at BigTech and adjacent.
However someone else said this, and I agree, if I have an AI use my claude-code CLI how is not valid first-party app use? It would be different if they would disallow others to use your claude-code account, and I think most including these AI companies would argue AI is supposed to replace and augment humans. So they aren't banning AI's from using the CLI, right- though thats what some of them are seemingly wanting to do.
Google wants usage that earns them street cred, not usage from bots who will never evaluate the output. They're all fighting tooth and nail to acquire customers, both free and paid... they didn't want their giveaways to be burned.
They're about to find out that if you aim to wholesale replace your workers with AI you can't really complain if your users replace themselves with AI...
But banning accounts wholesale is not going to earn them more customers. They could have just disabled Gemini access, or even given a warning first.
I don't use OpenClaw, I do pay hundreds per month for AI subscriptions, and I will not be giving that money to Google while they treat their customers like this.
> But banning accounts wholesale is not going to earn them more customers.
it has the chilling effect - people getting banned by google might imagine their entire google account getting banned (whether that's true or not is irrelevant).
If I say “you can use my car for $250/month if you don’t smoke in it” and then you pay me that money and you drive around until one day you smoke in it, I’m not going to let you smoke in my car. I told you not to smoke in it and you smoked in it. That’s the deal. All seems fine to me tbh.
More like "you can use my car to drive around as much as you want so long as you don't drive to another coast on a highway" and then you drive to another coast on a highway and get mad when I won't give you my car next time.
No, it’s more like you have 10k km to drive in this car.
And then, after you actually drive it for 10k km on “unauthorized” highways, they ban you.
That’s why analogies are for fucking idiots. There is a true example — you bought access to use your account for n tokens, and google got pissy that you didn’t use the tokens in their spyware ecosystem.
For you analogy loving fucks, it’s like the arcades selling their proprietary 50 cent worth token coins, that only works on their machines, when they could just accept 50 cent coins.
Well, your premise is false because you do not actually buy access for a stated number of tokens. I used the analogy because you have trouble getting facts straight so indeed you fall into the category that you describe there.
Yep it sounds like Google is charging too little, and taking losses that would be unsustainable for other companies, to try and win the market on AI coding products. Which is a violation of anti trust law, I think. Now that people are using their pricing in an unexpected way where their product isn’t the one winning from their anti competitive practices, they’re punishing the users. Classic monopolistic behavior. And why we need to tax mega corp more and break them up.
Then maybe they should charge for that instead of banning accounts?
Google decided on their own business plan without any guns to their backs. If they decide to create a plan that is subsidized that's entirely on them.