Edge New Zealand general manager Ian Lyte is defending the actions which saw his company plead guilty to breaching the Fair Trading act as “a simple mistake”.
This view contrasts sharply with that of Commerce Commission head Alan Bollard, who describes Edge’s actions as a deliberate, methodical deception and “a major breach of trust”.
Lyte says that at the time of the breach the company was experiencing rapid growth, particularly in its fledgling Wellington and Christchurch operations.
Edge pleaded guilty last Monday to falsely describing motherboards supplied by the company as having 256k cache memory. There was in fact no cache memory, and the cache “chips” proved to be solid pieces of plastic.
“We didn’t have sufficient controls in place to prevent an error occurring,” says Lyte. “In our Auckland head office, which sold the majority of these boards, there was no error made, therefore no issue. Any company experiencing the growth Wellington and Christchurch were encountering can fall prey to simple mistakes like this.”
The Commerce Commission raided Edge’s premises late in 1995 after a series of complaints from retailers selling equipment containing Edge motherboards. The motherboards, which were imported from Taiwan, appear similar to boards which have appeared in several countries and are often known as “writeback cache” boards.
Victoria University’s computer science department was asked to run tests on several of the boards. The tests found that the machines’ BIOS reported that 256Kb memory was installed even when it had been removed prior to the test.
The commission’s evidence to Wellington’s District Court last week highlighted a series of faxes sent from Edge’s head office in Sydney referring to “dummy” motherboards and “realy” (sic) mother-boards. It also noted that at the time of the offence, 256Kb cache was a selling feature in PCs, and that there was a worldwide shortage of cache memory, doubling the price of such components for several months.
Lyte says there was nothing sinister in this terminology and that only one person, whose command of English was not good, had used such terms.
Edge still claims, as it has throughout, that its motherboards were equal to or superior to motherboards with real 256Kb memory.
The tests indicated that the speed of the machines was roughly equivalent only when the PC was fitted with an enhanced CPU, but not otherwise. However, the commission noted in its evidence that some programs do not operate unless real 256Kb is installed, also speed increased about 5% when 256Kb external cache installed with a CPU that has internal writeback cache. No explanatory material was supplied with the price lists, nor was there any material indicating the motherboards did not contain real cache.
The commission also stated in its evidence that during one of the tests Edge’s technical manager claimed the write-back cache is actually located in the system chip on the motherboard, but the technical manager had been unable to answer the question of why there were nevertheless 9 cache memory chips installed on the board. Edge later described such chips — which were simply plastic moulds — as “cosmetic” or “decorative”. It also stated it was unaware that some of the motherboards seized by the commission had pins cut off and, in some cases, identification marks whited out.
There is still disagreement on the number of vendors affected. The commission says it contacted 11 of them and that all were under the impression they were getting 256Kb cache. It also believes there are still a large number of resellers who have unknowingly sold PCs containing the boards, as nearly 10,000 were sold by Edge.
However, Lyte says that of the 973 dealers on the company’s books in 1995, only five complained that they had thought they were getting 256Kb cache.
The commission says there is still a “substantial” number of the motherboards being used and is advising users with 486 machines that are running slow to take them back to their vendor and have them checked.
Lyte says that’s not the point.
“The issue is has anyone been disadvantaged? No charges have been laid against us with regard to inferior performance by the motherboards when configured correctly.”