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Magnuson-Moss Warranty Act
On occasion, Kingston 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
Kingston 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.
Kingston 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. Throughout its existence, Kingston has placed extreme importance on
reliability. Kingston modules are designed to meet the specific requirements of the system or class
of systems into which the module will be installed. Our memory is 100% tested to be reliable and
compatible. Further, all Kingston memory modules are backed by a lifetime warranty and supported
by 24-7 free technical support.
For further discussion on warranty issues, you may be interested in earlier articles on this subject.
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