Sun blocks second-hand sales, say dealers
OFT complaint alleges Sun is hogging a £700m market.
By Peter Sayer, IDG News Service | Published: 10:27, 26 April 2007
Sun Microsystems is preventing other companies trading in second-hand Sun products, according to a group of computer dealers.
Sun is refusing to divulge information about the provenance of used products, according to the Association of Service and Computer Dealers International (ASCDI).
The group, which has complained to the Office of Fair Trading (OFT) that this effectively closes trade in used Sun products in the EU to anyone other than Sun, and is against EU principles. The association estimates the EU market for used Sun equipment will be worth £700m in 2007 and that, without interference from Sun, independent resellers should pick up at least £265m of that.
Some vendors forbid their resellers to import products originally sold in one country for resale in another. They may do this in order to protect their reputation, as products may not meet the same safety or regulatory requirements in all markets, or to protec their prices. The difference in software prices between the US and EU countries, for instance, is often much greater than differences in sales taxes alone can account for.
According to the EU principle of free circulation of goods, a product legitimately sold in one member state can be freely traded in another, and so it should be possible to resell used goods throughout the EU that were originally authorised for sale in one member state.
However, Sun's refusal to tell second-hand equipment dealers in the EU where a particular item was originally sold, makes it difficult or impossible for them to determine whether they have the right to resell it, and this behaviour is contrary to the 1998 Competition Act, the association said.
Without a competitive market for second-hand equipment, trade-in prices will fall, leaving those who upgrade with a bigger bill to pay, the association said.
Other IT equipment makers, including IBM, Hewlett-Packard and Cisco Systems, readily provide information about the provenance of second-hand equipment, as did Sun until last year, the association said.
The association filed its complaint against Sun Microsystems UK, with the Office of Fair Trading. It asked the regulator to order Sun to provide information about the provenance of its products on request, for free, and without passing on details of requests to its own direct sales force.
Sun staff in Europe did not respond to requests for comment.
