On
occasion, Future Memory Solutions (FMS) hears reports that a computer system manufacturer's
sales representative has told a customer (which could be an end user, reseller
or integrator) that if the customer uses third party memory in the system
manufacturer's computer system, the system manufacturer's warranty is voided.
Through this ploy, the sales representative attempts to coerce customers into
purchasing memory modules from the system manufacturer, usually at much higher
prices than FMS charges. A system manufacturer may resort to this type of
warranty threat to spread fear, uncertainty and doubt in the minds of
consumers, rather than to compete on the basis of quality and price ("FUD
marketing").
In legal terms, this type of ploy is referred to as a "tie-in sales
provision." In general, such provisions are illegal. They are specifically
prohibited in the consumer market by section 102(c) of the Magnuson-Moss
Warranty Act of 1975 (15 United States Code section 2302(c)). In the
workstation and server markets, such ploys can violate sections 1 and 2 of the
Sherman Antitrust Act (15 United States Code sections 1 and 2). As the United
States Supreme Court has stated:
The essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product [here, the computer system] to force the buyer into the purchase of a tied product [here, the memory module sold by the system manufacturer] that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms. When such "forcing" is present, competition on the merits in the market for the [memory module] is restrained and the Sherman Act is violated.
Jefferson Parish Hospital District No. 2 v.
Hyde,
466 U.S. 2 (1984).
Companies and individuals that violate the antitrust laws are subject to a wide
range of sanctions, including having triple damages imposed against them. The
important point is that, regardless of their legality, these types of sales
ploys are intended to intimidate and pressure unsophisticated purchasers into
spending substantially more than they should for memory upgrades.
FMS strongly supports customer choice and believes that consumers - whether end
user, reseller, or systems integrator - should be free to purchase compatible
memory modules without being subject to threats and misinformation.
· Understand the Magnuson-Moss Act