Computer dealers accuse Sun of blocking used sales

A group of computer dealers filed a complaint about Sun Microsystems with a U.K. government body that regulates business practices on Monday.

The Association of Service and Computer Dealers International (ASCDI) accused Sun of refusing to divulge information about the provenance of its products, effectively closing trade in used Sun products in the European Union to anyone other than Sun. The association estimates the E.U. market for used Sun equipment will be worth $1.4 billion in 2007 and that, without interference from Sun, independent resellers should corner at least $533 million of that.

Some vendors forbid their resellers to import products originally sold in one country for resale in another. They may do this in order to protect their reputation, as products may not meet the same safety or regulatory requirements in all markets, or their prices. The difference in software prices between the U.S. and E.U. countries, for instance, is often much greater than differences in sales taxes alone can account for.

According to the E.U. principle of free circulation of goods, a product legitimately sold in one member state can be freely traded in another, and so it should be possible to resell used goods throughout the E.U. that were originally authorized for sale in one member state.

However, Sun’s refusal to tell second-hand equipment dealers in the E.U. where a particular item was originally sold makes it difficult or impossible for them to determine whether they have the right to resell it, and this behavior is contrary to the U.K.’s 1998 Competition Act, the association said.

Without a competitive market for second-hand equipment, trade-in prices will fall, leaving those who upgrade with a bigger bill to pay, the association said.

Other IT equipment makers, including IBM, Hewlett-Packard, and Cisco Systems, readily provide information about the provenance of second-hand equipment, as did Sun until last year, the association said

The association, based in Delray Beach, Florida, filed its complaint against Sun’s U.K. subsidiary, Sun Microsystems UK, with the Office of Fair Trading. It asked the regulator to order Sun to provide information about the provenance of its products on request, for free, and without passing on details of requests to its own direct sales force.

Sun staff in Europe did not respond to requests for comment.