Sun slammed for anti-competitive UK practices

Sun has been accused of refusing to supply product-specific historical sales and distribution information to independent UK resellers

A complaint has been filed with the Office of Fair Trading against Sun Microsystems, accusing the vendor of illegal and anticompetitive practices.

The allegation was made by the Association of Service and Computer Dealers International (ASCDI), which represents the interests of computer resellers, service providers and end users worldwide.

The charges centre on Sun's alleged refusal to supply product-specific historical sales and distribution information to independent companies which resell Sun products in the UK.

"Prior to 2006, like other computer equipment manufacturers, Sun had not interfered with the free trade of Sun products by independent resellers," the ASCDI claimed.

"In 2006, however, Sun made the need for provenance information critical to the trade in its products in the UK, and elsewhere in the EU, under the guise of trademark protectionism.

"It began a policy of refusing to provide such information whenever requested by independent resellers.

"The ASCDI supports Sun's legitimate trademark rights but without Sun's cooperation, Sun has made it impossible to know whether a given Sun product is or has been placed on the European Economic Area [EEA] market with Sun's consent."

This policy effectively closes the secondary market trade in Sun products to any company other than Sun, according to ASCDI president Joe Marion. "It is anti-competitive behaviour plain and simple," he said.

Prior to filing the complaint, the ASCDI said that it had made "numerous direct requests" to Sun for access to its provenance information and to resolve the issue, but to no avail.

It added that Sun is the only major computer manufacturer challenging the importation of its products into the EEA.

In contrast, provenance information is readily available from other manufacturers including IBM, HP and Cisco, according to the organisation.

The complaint states that Sun's refusal to supply the provenance information interferes with free trade and is prohibited by UK competition law, specifically the Chapter II prohibition of the Competition Act 1998.

"Case law makes it clear that Sun is prohibited from using its authorised distribution system to create obstacles to the resale of its products outside its authorised distribution network," the ASCDI added.

"The complaint also asserts that Sun's refusal to disclose provenance information, and its threats of litigation to independent resellers which trade in Sun computers, is resulting in diminished competition in the secondary market."

At stake is an estimated $1.4bn market in 2007 in the EU for used Sun products. Without interference from Sun, ASCDI estimates that independent resellers should achieve a market share for Sun products of at least $533m.

"If Sun's behaviour continues unchecked, not only will this share drop, but other manufacturers may follow suit, forcing independent resellers out of the market and giving manufacturers near monopolies for their respective products," the ASCDI claimed.

The ASCDI complaint seeks a declaration from the Office of Fair Trading that Sun's refusal to provide provenance information on its used products is prohibited under the Chapter II prohibition of the Competition Act 1998.

It also seeks an order that Sun provides such information in a timely manner, without disclosure of such requests to Sun's direct salesforce and a fee-free basis.

"Our goal is to keep the secondary computer marketplace free and open to independent resellers," said Marion. "Ultimately, it will be the customer/end-user that will benefit from a more open marketplace."

The ASCDI is a worldwide, non-profit organisation based in the US. Its members are from all over the world, with a concentration in the US and the EU.

• UK Complaint Summary ASCDI v. Sun Microsystems UK