PLN 6 million fine for Dell. UOKiK: The company was misleading

Luc Williams

Proceedings against Dell

As he announced in the press release Office of Competition and Consumer Protection (UOKiK)the proceedings against Dell concerned the suspicion of concluding an agreement restricting competition with wholesale distributors and authorized sellers when selling Dell IT infrastructure products to enterprises and institutions, including through public procurement. This involved the sale of, among others, ready-made IT products, such as: computers, laptops, peripheral devices (mice), as well as IT products and services used to create IT systems, including servers, mass memories, disk arrays and technical support or related services. including services, e.g. cloud services or data protection.

Doubts of the President of the Office of Competition and Consumer Protection

Doubts of the President of the Office of Competition and Consumer Protection – as reported – aroused a sales system based on the registration of transactions by authorized sellers. “If one of them reported a potential transaction with a given institutional or business customer in the internal registration system, then – under the suspected arrangement – Dell could prevent other trading partners from providing competitive price offers to the same customer, even at the customer’s express request,” it said.

In the opinion of the Office of Competition and Consumer Protection, such a practice could constitute an unlawful division of the market by assigning specific sellers to a given transaction. “As a result, enterprises and institutions may have been deprived of the opportunity to purchase Dell equipment at more attractive price or technological conditions.”

“We understand the characteristics of the Dell distribution system, but sales must always respect competition rules. In the issued decision, I obliged the company to eliminate practices that involved allocating transactions to specific sellers. Thanks to this, enterprises and institutions purchasing or ordering Dell products will have the opportunity to compare many offers and choosing the most advantageous one,” said Tomasz Chróstny, president of the Office of Competition and Consumer Protection, quoted in the information.

Providing false information

The Office of Competition and Consumer Protection (UOKiK) fined Dell for providing false information during the investigation proceedings. The company – as reported – misled the president of the Office of Competition and Consumer Protection by answering questions about entrepreneurs who applied to Dell for an offer for the same client. “Despite sending as many as three requests in this regard, the company presented three times to the President of the Office of Competition and Consumer Protection false and misleading information regarding entrepreneurs to whom Dell did not provide price offers and the reasons for not presenting these offers,” it was reported.

The President of the Office imposed a fine on the entrepreneur in the amount of PLN 6 million.

As conveyed, in effect decision of the Office of Competition and Consumer Protection, many authorized sellers will now be able to apply to sign a contract with a customer, without the need to obtain Dell’s consent or provide Dell with the name of the end customer. The changes will also apply to discounts provided by Dell. “At least three authorized sellers or distributors may receive a discount on the same transaction outside public procurement, based on transparent criteria, such as the order in which the transaction was reported or its projected value. Subsequent sellers or distributors may receive the same discount upon written request of the end customer.”

Additional discounts, as reported, will also be available on the basis of the so-called pre-sales efforts, assessed on the basis of transparent criteria, such as customer involvement or preparation of test solutions. “All authorized sellers or distributors will also receive the same level of discount for transactions in public tenders, as well as additional discounts for +pre-sales efforts+. This means that many sellers will compete for one order and customers will have a greater choice of offers,” it explained.

Dell will have six months from the decision becoming final to introduce new sales rules. When determining the obligation deadline, the following factors were taken into account: the need to modify global IT systems. The entrepreneur will have to inform the President of the Office of Competition and Consumer Protection in detail about the fulfillment of the obligation.

The Office of Competition and Consumer Protection emphasized that the issued decisions are not final. They may be appealed to the court. (PAP)

About LUC WILLIAMS

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