Issue #0521/3 - Competition is what business is all about but Dell is under threat of investigation for going way beyond competition – an investigation that could widely affect printer pricing structures.
Dell Laser Printer 1100As Dell launches its latest mono laser printer, the 14ppm entry level Dell 1100 personal printer, for the price of a week’s groceries for two (£69) in the UK, reports are emerging that the company may become the subject of an anticompetitive investigation by the European Commission.
Based on complaints that Dell is selling server hardware at below cost to win business with strategic accounts, the question has to be asked, “could the selling of printers ‘below cost’ also constitute unfair business practice?”
If the answer were yes, there would be major repercussions around the printer industry.
One commercial director for a channel player is reported as questioning, “is [Dell] selling at a huge loss to try to wipe out the channel”?
Certainly Dell’s publicly declared intent to “drive excess profit out of the printer market”, is tantamount to a declaration of war not just against other printer manufacturers but also against the traditional printer sales channel and the dealers and resellers that fill it.
One doesn’t have to look far to see that Dell’s European pricing lacks any form of consistency or accuracy and could easily be criticised as paralleling the unfair practice of selling into strategic accounts below cost by selling printers into key country markets below cost while others are required to pay a premium.
For instance, Dell’s European press release states that the price should be €99 and £69. However, in parts of the Euro zone (Germany), the price of the Dell 1100 was showing on the web site at €168, currently equating to around £112 or 62% higher than the quoted price. Now, mysteriously, the price has been adjusted to €99!
There is, however, a major difference between the accusations surrounding server sales activities and the position on printers. Suggestions have been made that Intel has provided Dell with a slush fund to help the company win business from competitor AMD. There could never be a parallel in the printer industry where OEMs Lexmark, Samsung, Fuji Xerox or Kodak provide a slush fund to assist in winning business from competitors because the industry is too incestuous and each of those OEMs would stand to lose large proportions of branded business of their own to Dell.
Dell Laser Printer 1100~End~
