BigHabitat
Level 2 Member
Long time readers will know that Netgear is no fan of resellers, and in their fantasy land they believe that all retailers would abide by their minimum advertised price, and heck they would fix the actual transaction price were it legal They believe in this fantasy so much, that whenever they see a price lower then their Minimum Advertised price, that something nefarious must be going on.
A brief history with Netgear
It’s been nearly a year since I declared that the NETGEAR compliance team had gone soft after they backed off insinuating that they would be enforcing Amazon’s terms and conditions.
Obviously, Netgear didn’t seem to want to upset Amazon, who after all moves so much product that they can and do pretty much ignore Netgear’s minimum advertised price. And while other Amazon requires certain brands and products to have specific authorization to list as new, this is not the case with Netgear.
Thern Netgear did what any cowardly company trying to create an illusion of a retail price far above actual transaction prices might do, file lawsuits against herds of resellers in the hopes that most would cave.
Here is an example of 387386_netgear_inc_v_phoenixnetworksolutions_caseno_114cv259508. It’s good reading and I’ll get to that in a bit.
Netgear’s Legal Strategy Evolves; Attempts to Redefine “New”
Let’s take a look at the current letter:
Now this may look similar to previous letters from Netgear, but there is a very important distinction that proves that Netgear’s main concern is not whether you are getting a fake product, but ensuring that any units offered for sale are purchased through “Netgear Authorized Distributors”
Now take a look at a letter from Netgear from a year ago:
BigHabitat_R6200_080913
At that time they requested “To this end, please let us know from whom you acquired the products noted above so that we can verify that they are genuine and new NETGEAR products that are meant for retail sale.”
When is an brand new, unwrapped, unregistered router not New? When it’s a Netgear (Trademark: NETGEAR)
Now Netgear is going after “previously purchased items passed off as new”. Their assertion is that it is it is not new because they (Netgear) say that the warranty would not apply. Per the Phoenix lawsuit:
But wait, if a reseller bought it through an authorized vendor (Sears, or Staples), it was “sold through Authorized Resellers”..
Did Amazon tweak their “New” Product Condition wording?
Here it is:
Do Netgear Products originally purchased from a “Netgear Authorized Reseller” lose the OEM Warranty if Resold?
Let’s go find the warranty for the Nighthawk on Netgear’s site. Let’s pull up the product page. There are three .pdf downloads there, none of which is the warranty. OK, let’s go to the Amazon sales page, nothing. How about Sears? finally, here we go. Here it is:
spin_prod_962663912_Netgear Warranty from sears site 2014_09_11
So where in here does it say that the warranty is non-transferable or that a gifted or resold item would be ineligible for warranty service?
It states an “end customer” can obtain an RMA from Netgear to receive warranty service.
If that is true, then
Let’s look at a couple of other arguments that Netgear claimed against Phoenix
Netgear’s Economic Loss?
But wait, if a reseller bought the products through an Authorized Reseller without the intention of keeping it and sold it to a willing end customer, didn’t Netgear get the same amount of sales? Didn’t the customer just benefit?
Isn’t this called competition or arbitrage? Assuming a reseller is purchasing from an Authorized Reseller and acting rationally, he/she is selling it above the offer price from one Authorized Reseller (i.e., if Staples sold it for $150 and Amazon $199, if I bought from Staples and sold it for $197 is it really creating downward pressure in total? .Could it have generated additional sales at Amazon vis a vis a competitor? Can you actually prove any damages if someone sold 2 units at the same price as Amazon (an authorized dealer) and Amazon held their price?
But when you have enough high-powered lawyers you don’t really need to be right, do you?
Continue reading...
A brief history with Netgear
It’s been nearly a year since I declared that the NETGEAR compliance team had gone soft after they backed off insinuating that they would be enforcing Amazon’s terms and conditions.
Obviously, Netgear didn’t seem to want to upset Amazon, who after all moves so much product that they can and do pretty much ignore Netgear’s minimum advertised price. And while other Amazon requires certain brands and products to have specific authorization to list as new, this is not the case with Netgear.
Thern Netgear did what any cowardly company trying to create an illusion of a retail price far above actual transaction prices might do, file lawsuits against herds of resellers in the hopes that most would cave.
Here is an example of 387386_netgear_inc_v_phoenixnetworksolutions_caseno_114cv259508. It’s good reading and I’ll get to that in a bit.
Netgear’s Legal Strategy Evolves; Attempts to Redefine “New”
Let’s take a look at the current letter:
September 10, 2014
VIA EMAIL DELIVERY
RE: NETGEAR Items on Amazon Marketplace
VIA EMAIL DELIVERY
RE: NETGEAR Items on Amazon Marketplace
Dear Sir/Madam,
It has come to NETGEAR’s attention that you have been selling NETGEAR products through the Amazon Marketplace at prices below the prices advertised by sellers in NETGEAR’s Authorized distribution channel. In particular, the NETGEAR R7000-100PAS is being sold by your company, BigHabitat, at a price below that of legitimate NETGEAR Authorized Resellers. Our experience has shown us that NETGEAR products sold at such prices are often either:
(i) Previously purchased products passed off as new;
(ii) Refurbished products passed off as new;
(iii) Damaged, defective, or “B-grade” products passed off as new;
(iv) Products built specifically for service provider customers and their specific networks that are represented as retail products; or
(v) Stolen products.
(ii) Refurbished products passed off as new;
(iii) Damaged, defective, or “B-grade” products passed off as new;
(iv) Products built specifically for service provider customers and their specific networks that are represented as retail products; or
(v) Stolen products.
This email is part of our significant efforts to ensure the quality of NETGEAR products that end users purchase.
We owe it to the customers in our Authorized distribution channel to regularly investigate sales outside of this channel. Therefore, please let us know when and from whom you acquired the products noted above so that we can verify they are genuine and new NETGEAR products purchased from NETGEAR Authorized Distributors and are eligible for retail sale. Please note products which are not purchased from NETGEAR Authorized Distributors may not be eligible for resale and if resold will not be eligible for NETGEAR warranty coverage or support.
Please provide us with the requested information within two calendar days of the date of this letter. We look forward to your response.
Very truly yours,
NETGEAR Compliance Department
Very truly yours,
NETGEAR Compliance Department
Now this may look similar to previous letters from Netgear, but there is a very important distinction that proves that Netgear’s main concern is not whether you are getting a fake product, but ensuring that any units offered for sale are purchased through “Netgear Authorized Distributors”
Now take a look at a letter from Netgear from a year ago:
BigHabitat_R6200_080913
At that time they requested “To this end, please let us know from whom you acquired the products noted above so that we can verify that they are genuine and new NETGEAR products that are meant for retail sale.”
When is an brand new, unwrapped, unregistered router not New? When it’s a Netgear (Trademark: NETGEAR)
Now Netgear is going after “previously purchased items passed off as new”. Their assertion is that it is it is not new because they (Netgear) say that the warranty would not apply. Per the Phoenix lawsuit:
“Only NETGEAR products sold through Authorized Resellers are covered by NETGEAR’s warranty and NETGEAR’s customer service program.”
But wait, if a reseller bought it through an authorized vendor (Sears, or Staples), it was “sold through Authorized Resellers”..
Did Amazon tweak their “New” Product Condition wording?
Here it is:
- New: Just like it sounds. A brand-new, unused, unopened item in its original packaging, with all original packaging materials included. Original protective wrapping, if any, is intact. Original manufacturer’s warranty, if any, still applies, with warranty details included in the listing comments.
Do Netgear Products originally purchased from a “Netgear Authorized Reseller” lose the OEM Warranty if Resold?
Let’s go find the warranty for the Nighthawk on Netgear’s site. Let’s pull up the product page. There are three .pdf downloads there, none of which is the warranty. OK, let’s go to the Amazon sales page, nothing. How about Sears? finally, here we go. Here it is:
spin_prod_962663912_Netgear Warranty from sears site 2014_09_11
So where in here does it say that the warranty is non-transferable or that a gifted or resold item would be ineligible for warranty service?
It states an “end customer” can obtain an RMA from Netgear to receive warranty service.
If that is true, then
- Netgear’s own documentation is grossly misleading, as a reasonable person would read that and assume that the “end customer” can obtain warranty service
- Netgear’s omission of the warranty on their product page or at the point of sale is harmful to consumers as those and other aspects actually stated in the warranty limit the rights of potential customers
- If Netgear is going to assert that the warranty is non-transferable and resold products are ineligible it should assert it directly in the warranty text.
Let’s look at a couple of other arguments that Netgear claimed against Phoenix
Netgear’s Economic Loss?
As a result of Phoenix’s unlawful, unfair, and deceptive conduct as alleged above, NET GEAR has lost expected sales of its premium wireless networking equipment. Specifically, Phoenix’s conduct has caused consumers to purchase Unauthorized Products from Phoenix, rather than purchasing NETGEAR products from NETGEAR or its Authorized Resellers, depriving NET GEAR of revenue it would have earned from direct sales or sales to Authorized Resellers.
But wait, if a reseller bought the products through an Authorized Reseller without the intention of keeping it and sold it to a willing end customer, didn’t Netgear get the same amount of sales? Didn’t the customer just benefit?
Additionally, Phoenix’s unauthorized sales of the Unauthorized Products at prices below what Authorized Resellers charge creates downward pressure on the retail prices of NETGEAR’s products, reducing the prices at which consumers are willing to purchase NETGEAR’s products from NETGEAR and its Authorized Resellers.
Isn’t this called competition or arbitrage? Assuming a reseller is purchasing from an Authorized Reseller and acting rationally, he/she is selling it above the offer price from one Authorized Reseller (i.e., if Staples sold it for $150 and Amazon $199, if I bought from Staples and sold it for $197 is it really creating downward pressure in total? .Could it have generated additional sales at Amazon vis a vis a competitor? Can you actually prove any damages if someone sold 2 units at the same price as Amazon (an authorized dealer) and Amazon held their price?
But when you have enough high-powered lawyers you don’t really need to be right, do you?
Continue reading...