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Dell fined NT$1 million for improper handling of pricing glitches
Central News Agency
2009-07-30 04:45 PM
Taipei, July 30 (CNA) The Taiwan branch of computer vendor Dell was fined NT$1 million (US$30,423) Thursday by the Taipei city government for improper handling of two pricing glitches and inadequate compensation offers to Taiwanese consumers.

Chen Poh-ching, a chief consumer protection officer with the Law and Regulation Commission under the city government, said the NT$1 million fine was meted out to Dell's Taiwan operation following consumer complaints about two pricing problems.

The first pricing glitch occurred from 11 p.m. June 25 to 7 a.m.

June 26, when the Taiwan branch of Dell Inc., the world's second largest PC vendor by revenue, offered its LCD monitors and notebooks at atypically low prices online because of a computer glitch.

The mishap triggered an influx of orders before the company detected the error the next day and suspended its online sales platform.

Dell Taiwan later compensated monitor buyers with an NT$1,000 discount coupon and notebook buyers with an NT$3,000 discount coupon to avoid filling the orders.

The buyers refused to accept the diminished coupons.

The second pricing glitch occurred from midnight of July 4 to the morning of July 5, when people ordering the NT$60,900 E3400 notebook online during that time discovered that the price for the unit changed to NT$18,558 when they began entering the specific features they wanted.

The glitch also triggered an influx of orders before the company detected the error later Sunday morning and suspended its online sales platform.

The company later offered a NT$20,000 discount coupon to those who took advantage of the second glitch, but the buyers refused to accept the coupons.

Chen said the company was fined in accordance Taiwan's Consumer Protection Law.

The commission hopes that Dell Taiwan would accept the commission's suggestion that it allow consumers who had already placed orders for the company's LCD monitors and notebook computers to purchase the Dell products at 85 percent of the original prices or Dell provide those affected consumers with cash compensation, rather than discount coupons, Chen said.

He added that if the company does not provide a more satisfactory compensation package to consumers soon, the commission does not exclude the possibility of repeating the fine on Dell Taiwan on a daily basis and even worse, suspending the company's online sales activity in Taiwan once and for all.

Dell Taiwan General Manager Terence Liao would not reveal how many orders the company received at the erroneous prices, but the Cabinet-level Consumer Protection Commission officials said 14,943 orders were placed for a total of 49,884 E3400 notebooks.

That would cause a revenue shortfall of more than NT$2.5 billion (US$76 million) if Dell were to make good on the orders.

The commission met with Dell executives, officials of the Ministry of Economic Affairs and the Fair Trade Commission as well as representatives of the Consumers' Foundation on July 5 to discuss feasible remedy measures.

Unimpressed, however, with Dell's discount coupon plan, commission officials indicated later that if the company does not provide a more satisfactory compensation package, it would ask the Consumers' Foundation to assist individual consumers in demanding that Dell fulfill its obligation in honoring the online orders.

(By Deborah Kuo)



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