Thread

There’s no law (anyone feel free to quote it if you think I’m wrong). It doesn’t exist. It’s a policy of EE.

There is a law.  The term everyone is referring to is called “price fixing” and the law is the the Sherman Act.

You will find this same forum policy being discussed on SitePoint and likely any other decent sized forum dedicated in some for to web development.

I don’t know if a forum discussion on pricing has ever resulted in anyone having to go to court, but something similar enough must have happened for these forums to be watching out for these sorts of conversations.  Regardless, the risk isn’t worth allowing these discussions.

Whoops, Bluestrike2 beat me to it. 😉

Whoops, Bluestrike2 beat me to it. 😉

😊

Sorry, again, there is no US law which prevents people (on a forum or otherwise) from discussing rates for web developer services. That’s not what the Sherman Antitrust Act (circa 1890) is all about. Dig into a few of the details. It won’t take much effort. Here’s an excerpt:

The purpose of the Act was to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels. Its reference to trusts today is anachronistic. At the time of its passage, the trust was synonymous with monopolistic practice, because the trust was a popular way for monopolists to hold their businesses, and a way for cartel participants to create enforceable agreements…

And a little more…

The law attempts to prevent the artificial raising of prices by restriction of trade or supply.[4] In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not. Put another way, it has sometimes been said that the purpose of the Sherman Act is not to protect competitors, but rather to protect competition and the competitive landscape.

Anybody got a monopoly on providing developer services? I didn’t think so.

Antitrust has to do with larger companies (products or services) which have the potential to restrict competition within markets by collusion, cartels, tying arrangements, exclusive deals, mergers and acquisitions (which may reduce competition). Think railroads, manufacturing, telecommunications, computer systems, and names like AT&T, IBM, Microsoft, not Bill And Ted’s Excellent Web Developer Services, whereby Bill and Ted discuss how they price their web development services and rates with others in the industry.

In other words, the only prohibition here against individual developers discussing rates for services to clients is EE’s policy (a perfectly acceptable forum policy). There is no US law which seeks to prevent developers from discussing rates with each other, or many other developers (through forums, books, articles, seminars, et al.). The Sherman Act, the Clayton Antitrust Act (1914), the Robinson-Patman Act (1936), and others which extended the original Sherman Act, all had to do with restricting competition via a monopoly. A monopoly, in and of itself, is not illegal in the US. Abuse of a monopoly, however, can be illegal.

Again, web developer services are not likely to incur the wrath of government lawyers unless there is the potential of a monopoly, an undue effect on competition, and so on.

Oh, and there’s that whole First Amendment thing, too. That said, EE is well within their rights to prohibit or restrict the topic as they see fit. That’s not a legal issue as much as probably good policy as price fixing could enter into the picture. Potentially, what could happen is that a very large number or percentage of EE developers could collude, on the forums, to keep developer rates high, lock out competition, or whatever. That wouldn’t be good for EE, or EE’s customers, but even then, such action would be unlikely to incur much legal oversight unless competition for all web developer services is reduced, and while that’s possible, perhaps even plausible, it’s really unlikely.

I’d advise you to just get a quote from him for the entire project and one from a slightly “cheaper” developer. As said before, it all depends on how much he gets done in an hour. If someone else charges $60/h but takes twice as long to finish it, you’re still paying more…

But of course, quality is priceless™.

grrramps,

You’re kind of hitting on a few very different things.

1) Sherman was never simply about monopolistic competition, as is clearly laid out in § 1 of the Act. Since then, various rulings have expanded the legal definition of collusion and a number of prosecutions have made it explicitly clear that Microsoft and other such firms are not the only ones who have to deal with Antitrust issues. In particular, real estate & security brokers are particularly solid examples.

More importantly though, the FTC has continuously made it clear that Antitrust enforcement has been adapting to new forces of collusion and coordination that have come about as a result of technology (I can’t find it at the moment, but there was an interesting speech by Jonathan Baker from a while back during the dot com boom I remember perusing).

Case in point? A story from a while ago; unfortunately, the original mailing list it was posted to is gone, but one of the partners from Arent Fox (Lewis Rose) posted the following remarks:

“A famous story locally in Washington DC involved a group of real-estate brokers who went out to dinner together to celebrate a birthday of one of them. At the end of the dinner, one broker announced that he was raising his commission from 5% to 6% and wanted them to hear it from him before reading about it in the trade press. No further discussion ensued. Over the next year, several of the others also raised their commissions to 6%. All of them were indicted, even those who did not raise their prices, for price fixing. Criminal indictments, I might add.”

[cite, as well as additional information]

Anyhow, in short, US competition law extends well beyond the purview of monopolies. As a result, the simple answer is to just avoid price discussions with competitors.

2) Probability has nothing to do with this. Yes, it’s unlikely any of us will have to face an issue here. But the reason why most professional communities take the issue seriously is because there’s a proven history upon which to reflect. And while these sites might explicitly state such policies, that doesn’t influence the effect of the regulatory landscape on the shaping of those policies. That said, I wouldn’t discount the possibility of criminal prosecution. Not because I believe it likely, or because I’m trying to scare people, but simply because it’s a pretty decent rule of thumb.

3) Freedom of speech isn’t the issue here; rather, it’s the application of that speech in a manner that can be construed as collusion that’s the crux of the discussion. Honestly, it doesn’t even really factor into the discussion (for the same reason it’s not a valid defense for most any other criminal activity, conspiracy, etc.).

Sorry about the length; I tend to pontificate when tired (and no, it doesn’t make sense to me, either) 😊.

In Spain its around 400 euros per day.

Now if this developer did the calculus in his head instead: $100/hour * 50 hours estimated = $5000 .. would you be OK with it then?

If you find $100/hour ludicrous I would seriously recommend you to reconsider what you’re doing.

The last survey results i saw for the UK showed an average hourly rate of £37.

And that’s all i have to say about that.

Really happy to see this thread.  I do a fair amount of freelance and contract work in my off time, and I’m always trying to figure out what to price my work at.  The problem with not discussing it at all is that there’s no way to figure out a fair price of work outside of the painful process of increasing prices bit by bit until work slows, then dropping back down a bit.  While I agree that we don’t want to get in a situation where developers are fixing prices (legality aside, there’s a clear moral problem there), having an open discussion about fair pricing in web development is a good thing to have.

Really happy to see this thread.  I do a fair amount of freelance and contract work in my off time, and I’m always trying to figure out what to price my work at.  The problem with not discussing it at all is that there’s no way to figure out a fair price of work outside of the painful process of increasing prices bit by bit until work slows, then dropping back down a bit.  While I agree that we don’t want to get in a situation where developers are fixing prices (legality aside, there’s a clear moral problem there), having an open discussion about fair pricing in web development is a good thing to have.

Good = Open discussion on pricing and best business practices.

Bad = Everyone disclosing their own pricing & agreeing that all EE work should be $X (incredibly unlikely, but still).

I’ve paid as little as $20 per hour for a web developer and as much as $285 per hour for a web developer. It all depends on the project, the developer, and who you think gets your project to an acceptable ROI most effectively.

The problem with a $100 an hour guy is that the rate doesn’t say much. How much can they accomplish in an hour? How good is the quality of their deliverable at that rate?

Exactly, which is why I prefer project pricing, even though I use an hourly rate to estimate costs. My rates are at the high end for the market I’m in, but I find that in many cases I’m able to be fairly competitive when I bid on projects. I’ve been a designer for over 20 years and a web designer/developer for about 15 years, so I’m able to accomplish more in less time.

Project pricing is definitely the way to go. You do have to be good at estimating your time, but it also makes things much easier from a business perspective.

Agencies doing this sort of work in our region are generally charging somewhere between $75 and $175 per hour.

$100 is definitely not too much for quality work. But, like others have said, there’s a lot of factors that go into deciding how much to charge per hour and everyone is different.

The thing that gets me is that people will take a car to a mechanic and spend as much as $100 per hour on labor and think nothing of it. Or go to the family doctor for a 10 minute visit where (s)he simply tells you that you’ve got a cold and sends you on your way. One week later you get a $150 bill in the mail for that 10 minute visit. Why are those two situations okay but a web developer charging $100 is just nuts? I don’t get the thought process, I guess.

I prefer a flat project price myself. I quote for the project and then any extras outside of the original agreement are charged by the hour or if they’re big enough additions a separate flat quote will be given.

Mechanics and doctors are licensed…;)

People have also been using them for their entire lives.