Dixons threatens legal action against Intel, Fujitsu
Go on, sue them
Dixons Stores Group will sue Intel and Fujitsu unless they withdraw allegations that the retailer is overcharging PCs, according to a UK Sunday newspaper.
The threat was reported in today’s Financial Mail on Sunday, which has something a hotline into Fujitsu UK headquarters. The Register is very keen to see this case escalate. Both sides should have their days in court, as must our reporters. Fujitsu has banged on for months about Dixons’ vice-like grip on the UK PC market (estimated variously at 12-15 per cent of total UK PC sales and anything between 35-50 per cent of consumer sales). Higher UK prices equals fewer sales, Fujitsu argues.
But it remained a little local dispute, until Intel’s Craig Barrett put in his ha’penceworth. Speaking at Comdex last month, Barrett slammed DSG’s “ludicrous” prices. Before we know it, Trade Secretary Peter Mandelson is writing to the Office of Fair Trading expressing concern over PC prices -– triggering an investigation from the OFT.
Who says Intel is powerful. But how did Dixons let it go this far? A combination of arrogance and complacency is to blame. Dixons has been surprisingly sluggish on the litigation front -- it should have consulted M’learned Friend over the Fujitsu accusations months ago.
Dixons is famously pugnacious, and led by Sir Stanley Kalms, a famously pugnacious man -- three or four years back he made a speech at a dinner for the company’s suppliers which went something like this: "Anyone who supplies Costco(a US discounter that tried to launch in the UK) is out of Dixons." End of speech. Dixons takes no prisoners -- it has mopped most of the competition from multiple retailers on the UK high street in white goods, brown goods and now beige goods (as hep-cat retailers called PCs these days). It has weathered accusations of overcharging on warranties for years -- but reckons the PC pricing charge is unfair.
When you tot up all the goodies thrown in by Dixons -- post-sales service, software bundles -- as well as UK sales tax, then the prices it charges are only six per cent higher than in Germany, Europe’s cheapest (and notoriously unprofitable) market. The Register some sympathy with Dixons’ position -- no one is forced to buy PCs from its stores, after all –-which is very different from liking the company. ®
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