Feeds

HP gets tough with grey market dealers

Takes UK reseller to court

  • alert
  • submit to reddit

HP EMEA is turning detective in its attempts to stamp out the unauthorised sale of imports.

As of yesterday HP is running reseller spot checks and distie audits to stamp out the grey market in the region. And it won’t hesitate to use the law courts against resellers who “violate contractual terms”. The company says it is taking legal action against one UK reseller for breach of contract and warns it has other cases under review.

According to HP these tough new measures show its commitment to “making the channel economically viable in the long term by clamping down on the illegal use of HP’s name and sale of its products through unauthorised channels”.

Of course, importing cheaper kit from outside the EU may be exactly what it takes to improve the bottom line of the HP product reseller. Vendors don’t like grey imports in their territories, because they don’t register the sale and they can end up with angry customers when they reject their calls for support.

Trouble is, the likes of HP and other members of the Anti Gray Market Alliance muddy the waters by using “grey” as a catch-all term, encompassing counterfeit goods and the misrepresentation of goods sold (e.g. software priced for the academic market sold abroad to businesses) and straightforward criminality (e.g. resellers booking grey sales as legit to claw back co-op marketing funds). But there is a legitimate grey market too.

All too often, vendors employ restrictive distribution policies to charge different prices in different countries. It is entirely legitimate for companies to go to the grey market to exploit this arbitrage opportunity – so long as the transactions take place entirely within the EU. Indeed it is illegal under EU law to use restrictive distribution to thwart a common market, as many industries have found to their great cost when the fines rain down on them. The grey market should be welcomed as a means for companies to liquidate excess inventory quickly, and for buyers to get product more cheaply. ®

Related Link

HP press release

Related stories

HP recovers $1.8m in grey market fraud case
Grey IT broking worth $40bn a year
Vendors seek grey market whistleblowers
HM Customs VAT probe paralyses UK CPU broking
Software Imports - A Grey Area?
Vendors beat up on Grey Market

Related Products
Check out the Pocket PC department of The Reg mobile store

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.