Y2K complaint could set major precedent

The Commerce Commission has been thrust into the year-2000 compliance melee following what could become a precedent-setting complaint. The complaint, laid by Auckland recruitment and Y2K consultancy firm Wilson White, refers to the practice of charging users for Y2K-compliance upgrades regardless of how recently the product was purchased. Consumers' Institute chief executive David Russell is urging the commission to act on the complaint.

The Commerce Commission has been thrust into the year-2000 compliance melee following what could become a precedent-setting complaint.

"This is of such significance I would encourage them to follow it through on behalf of many thousands of consumers in New Zealand," says Consumers' Institute chief executive, David Russell.

The complaint, laid by Auckland recruitment and Y2K consultancy firm Wilson White, refers to the practice of charging users for Y2K-compliance upgrades regardless of how recently the product was purchased.

"As part of our readiness-for-year-2000 preparations, we contacted [Novell] to confirm that their product was fine," says the complaint. The response was that the product not only wasn't compliant, but that the user would have to upgrade to a new version of the software at a cost of around $4500. The software was last upgraded two years ago.

Russell believes any decision will have far-reaching consequences within the IT industry.

"The industry should have been aware [of the problem] and either warned purchasers of the added expense or not sold the product in the first place." He believes one of the key issues is how far back vendors will support their products.

"From an accounting point of view you can write a product off in about three years, however, here at the institute we keep them ticking over for five years at least." He says that as most of New Zealand's businesses fall into the small to medium-sized category, they would also be expecting equipment to last longer than three years.

Wilson White director Ross Stewart agrees. He says ceasing to support earlier versions of software or hardware is a red herring. "If it works, and the only reason for an upgrade is Y2K compliance, then you shouldn't have to pay, regardless of how old the product is."

One complicating factor in the whole upgrade issue is that of added functionality, as well as Y2K compliance. Most software upgrades include a number of new or improved features and vendors charge for the whole package. Stewart would like to see some form of rebate for the Y2K-compliance aspect of the software, but admits this would be hard to assess in some cases.

Rachel Leamy, head of fair trading at the Commerce Commission, says the commission will have to review the complaint carefully before deciding whether to investigate it fully. She was not prepared to comment on how long that process would take, nor how long the investigation would last if one was launched.

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