Comment by jacquesm
1 day ago
> Isn't the reason companies are doing this because they're offering tokens at a discount, provided they're spent through their tooling?
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.
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.
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> 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.
What does that have to do with Google?
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"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).
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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.
No, it's more like stuffing your pockets in all-you-can-eat buffet
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.
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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.
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So you are saying a company should never reinvest profits in the company to support another money losing business until it’s profitable?
Should Netflix for instance not invested money from renting DVDs to invest in a streaming service?
Apple not use the profits it was making from selling Apple //e’s to create the Mac?
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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.
> Then maybe they should charge for that instead of banning accounts?
They do, though - you're free to buy tokens and use Google's AI/LLM via the API?
What OpenClaw was doing was pretending to be a different product (Anti gravity) in order to use the cheaper tier.
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...
So they ban a group of early adopters who picked their product and who shape opinions.
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.
> They could have just disabled Gemini access
They just disabled Antigravity access.
> 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).
> They could have just disabled Gemini access
Yes, please!
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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.
I think it's a bad analogy. For one - smoking does very high permanent damage to a car interior.
Two - the usage pattern was Shaun's toc but not obviously against the spirit.
More like "you can use my car to drive around as much as you want" And then going: Obviously I didn't mean driving to another coast on a highway
They’re not banning for excessive use. They’re banning for use with unauthorized software. Big difference.
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.
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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.
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