To be sure everyone understand you correctly:

– "normal" publishing (behind a paywall) is free for authors,

– the open access option was set arbitrarily to $2000 by the publisher, and they decided to offer a discount at $1200 instead.

That's about right.

(For conferences with proceeedings, even normal publishing is not free - part of the conference fee is to pay the publisher.)

I still don't understand. Is pablo's correct? https://news.ycombinator.com/item?id=12439402

Yes. They where only going to charge 1200$ to make it open access instead of their normal charge of 2,000$ to make it open access.