F & E Trading, LLC Responds to Canon USA Suit

[Canon Rumors]

<a href="http://www.photographybay.com/2016/01/12/canon-v-gray-market-retailers-update-f-e-trading-responds/" target="_blank">Photography Bay</a> has continued their coverage of the legal battles between Canon USA and gray market retailers. This time, F & E Trading, LLC (who is allegedly BigValueInc & Electronics Valley) has responded to Canon USA’s allegations.</p>
<p>From: F & E Trading, LLC:</p>
<blockquote><p>The Complaint defines “F&E” to encompass both F&E NY and F&E New Jersey. F&E NY’s Answer is only with respect to F&E NY. F&E NY denies knowledge or information sufficient to form a belief as to the truth of any allegations as to F&E New Jersey or Albert Houllou.</p></blockquote>
<p>Photography Bay summarizes:</p>
<blockquote><p>So, Canon may have missed the mark on serving the wrong company or, perhaps, it just has not been able to serve the right company and Albert Houllou yet, <a href="http://www.photographybay.com/2015/12/06/canon-v-gray-market-retailers-lawsuits-update/">who was a key target it Canon’s Amended complaint</a>.</p></blockquote>
<p>You can <a href="http://www.photographybay.com/2016/01/12/canon-v-gray-market-retailers-update-f-e-trading-responds/" target="_blank">read more</a> over at Photography Bay.</p>
<span id="pty_trigger"></span>

 

[aclectasis]

Looks like Canon are about as good at suing as they are at creating consumer-oriented imaging equipment.

 

[davidmurray]

Looks like Canon are about as good at suing as they are at creating consumer-oriented imaging equipment.

Agreed - they're very good, and even better at making professional-oriented imaging equipment.

 

[Solar Eagle]

That's just a stalling tactic. A diversion to try and scatter the point. That's like cosby.... Just deny and pretend to forget. All burden of proof on the accuser.

 

[Mikehit]

The only thing here is, if Canon wins then customers lose.

No they don't. Purchasers of gear from official retailers keep the rights they have always had so lose nothing, purchasers of grey imports will not have access to something they should not have had in the first place (and in Canon's opinion have only had access to through fraudulent activity of the grey importers).

 

[Tugela]

The only thing here is, if Canon wins then customers lose.

No they don't. Purchasers of gear from official retailers keep the rights they have always had so lose nothing, purchasers of grey imports will not have access to something they should not have had in the first place (and in Canon's opinion have only had access to through fraudulent activity of the grey importers).

No, they have access to something that Canon chose to provide them access to, not as a result of the activity of grey importers. Canon USA is under no obligation to provide warranty service to them. If those customers want warranty service they need to get it in the country where the products were originally distributed. Alternatively, they can pay Canon USA for the service. Any damage sustained by Canon USA as a result of honoring foreign warranties is purely a result of their own actions, not the actions of the grey market importers.

 

[zim]

No, they have access to something that Canon chose to provide them access to, not as a result of the activity of grey importers. Canon USA is under no obligation to provide warranty service to them. If those customers want warranty service they need to get it in the country where the products were originally distributed. Alternatively, they can pay Canon USA for the service. Any damage sustained by Canon USA as a result of honoring foreign warranties is purely a result of their own actions, not the actions of the grey market importers.

If the grey market supplier has a distribution warehouse in the country of the purchaser does that re-obligate Canon or is it still simply if you don't buy from an approved reseller then Canon has no obligations no matter how you cut it?

Edit: and does Canon act any different between bodies and lenses?

 

[nhz]

The only thing here is, if Canon wins then customers lose.

No they don't. Purchasers of gear from official retailers keep the rights they have always had so lose nothing, purchasers of grey imports will not have access to something they should not have had in the first place (and in Canon's opinion have only had access to through fraudulent activity of the grey importers).

Given that Canon is specifying the MAP (minimum advertised price) for Canon goods, Canon is essentially engaging in price fixing for their goods through authorized dealers. Price fixing is bad for customers because it removes competition from the market.

Grey importing is neither fraudulent or illegal however it does promote competition - something Canon wants to eliminate.

Mostly agree, just look how the MAP has destroyed price competition in Europe over the last 1-2 years. Grey imports keeps distributors and resellers honest. Some Canon cameras and lenses are 50-60% more expensive here in EU compared to the US (that includes 20% VAT, but still ... such a big difference, especially with 'pro' bodies, is ridiculous). There is still a little bit of grey import but it seems to have almost disappeared compared to a few years ago. I guess Canon sues the companies who advertise lower prices, even if it is grey import. And of course one should ask where 'grey imports' come from, these very low prices have a reason and that is usually HUGE discounts for some big box movers that secretly sell to less official channels (often in other countries).

I'm not in favor of 'freeriding' by grey importers or their customers for service and support, however that is something Canon needs to sort out for themselves.

 

[Orangutan]

The only thing here is, if Canon wins then customers lose.

No they don't. Purchasers of gear from official retailers keep the rights they have always had so lose nothing, purchasers of grey imports will not have access to something they should not have had in the first place (and in Canon's opinion have only had access to through fraudulent activity of the grey importers).

Given that Canon is specifying the MAP (minimum advertised price) for Canon goods, Canon is essentially engaging in price fixing for their goods through authorized dealers. Price fixing is bad for customers because it removes competition from the market.

Grey importing is neither fraudulent or illegal however it does promote competition - something Canon wants to eliminate.

You're missing an important point: part of the accusations against grey-market companies is that they alter the serial numbers. I have no (ethical) problem with grey market importing, so long as everyone knows the device is not covered by local warranty. The buyer, essentially, opts out of paying for the local support and warranty. If the importer intentionally alters the product to make it appear to be an eligible device, then they are causing the local Canon service center to incur inappropriate support and warranty repair costs.

 

[Random Orbits]

You're missing an important point: part of the accusations against grey-market companies is that they alter the serial numbers. I have no (ethical) problem with grey market importing, so long as everyone knows the device is not covered by local warranty. The buyer, essentially, opts out of paying for the local support and warranty. If the importer intentionally alters the product to make it appear to be an eligible device, then they are causing the local Canon service center to incur inappropriate support and warranty repair costs.

+1. Although right now the USD is so strong against the Canadian dollar that you can find items from approved Canon resellers in Canada that are much lower cost than from US resellers once the currency conversion is accounted for.

 

[unfocused]

Given that Canon is specifying the MAP (minimum advertised price) for Canon goods, Canon is essentially engaging in price fixing for their goods through authorized dealers. Price fixing is bad for customers because it removes competition from the market.

Grey importing is neither fraudulent or illegal however it does promote competition - something Canon wants to eliminate.

First off, you don't know what price fixing is.

MAP pricing has been reviewed by the courts and found to not be price fixing. Go back and read some of the previous posts on this topic instead of just repeating talking points that are factually incorrect.

Price fixing occurs when competitors conspire to set the price of a commodity. If Canon, Nikon and Sony were meeting secretly to set prices, that might be price fixing. But MAP is not price fixing and no matter how many times you write that, it won't make it true.

Additionally, this court case has nothing at all to do with MAP pricing and its a gross distortion to claim it does. MAP involves only authorized resellers. Grey market involves unauthorized importing of products. The outcome of this case will not affect MAP pricing in the least.

Plus, people whine about MAP pricing, but it has been a complete failure. The market determines the price and always will, regardless of MAP pricing. There is simply too much competition and too many loopholes.

MAP means Minimum ADVERTISED Price. It doesn't affect the price a retailer actually charges, only what they advertise the price at. If the MAP price reflects the market, then it will be sold at that price. But, when the market demands a different price, it will always float to that price.

Retailers simply resort to gimmicks when the MAP price is too high:

• Add the product to your cart to see the final price;
• These are open box items that we used for an in-store demo and can't be sold as new;
• Use the Canon Street Price program to contact the retailer;
• Buy this special 'bundle' for additional savings;

Even the manufacturers circumvent their own MAP prices:

• Special manufacturers instant "rebate";
• Buy this with a printer and you'll get a special rebate that is essentially more than the value of the printer, which we know you will actually just resell on eBay;
• We have "refurbished' this lens by painting a little red dot on it and taking it out of its original box.

As others have noted, Canon has actually been more generous toward grey market retailers than their competitors. If they really wanted to shut down the grey market, they would simply do as Nikon and Sony have done and refuse to service any grey market products.

This lawsuit is about three things: 1) forcing the grey market importers to stop the clearly fraudulent practices like altering serial numbers; 2) showing their authorized dealer network that they are standing up for them; and 3) reaching a compromise in which the grey market retailers pay Canon USA something to offset some of Canon USA's marketing and servicing costs.

Anyone who thinks that a defeat in court for Canon USA would somehow benefit consumers is simply foolish. If Canon were to lose outright, they will follow the lead of Nikon and Sony and refuse to touch a grey market product.

 

[tr573]

...
You're missing an important point: part of the accusations against grey-market companies is that they alter the serial numbers. I have no (ethical) problem with grey market importing, so long as everyone knows the device is not covered by local warranty. The buyer, essentially, opts out of paying for the local support and warranty. If the importer intentionally alters the product to make it appear to be an eligible device, then they are causing the local Canon service center to incur inappropriate support and warranty repair costs.

Firstly, I agree, the serial number altering/forgery is bad for all concerned.

If serial number dodginess were common then it'd show up in the online feedback and they're rep wouldn't be at 99%.

My concern is that this serial number thing is just a cover for Canon to go after them (F&E) for more than just that.

The serial number forgery is so pointless and dumb, I don't even know why the companies would bother doing it. I bought a 7D2 from GetItDigital (the subject of the other lawsuit) that had a fake serial sticker on it. The firmware still has the real serial in it, so what was the point of the fake sticker?

With the real serial number available to anyone who plugs it into a computer, the fake sticker gives you neither of these things
A) legitimate us serial for warranty
B) coverup for the original region/distributor

So what's the point? All it did was expose them legally to Canon USA (as seen in these suits) Stupid.

 

[Mikehit]

Anyone who thinks that a defeat in court for Canon USA would somehow benefit consumers is simply foolish. If Canon were to lose outright, they will follow the lead of Nikon and Sony and refuse to touch a grey market product.

Thank you, unfocused, for a far more erudite and comprehensive reply that I could have managed.

 

[AshtonNekolah]

Given that Canon is specifying the MAP (minimum advertised price) for Canon goods, Canon is essentially engaging in price fixing for their goods through authorized dealers. Price fixing is bad for customers because it removes competition from the market.

Grey importing is neither fraudulent or illegal however it does promote competition - something Canon wants to eliminate.

First off, you don't know what price fixing is.

MAP pricing has been reviewed by the courts and found to not be price fixing. Go back and read some of the previous posts on this topic instead of just repeating talking points that are factually incorrect.

Price fixing occurs when competitors conspire to set the price of a commodity. If Canon, Nikon and Sony were meeting secretly to set prices, that might be price fixing. But MAP is not price fixing and no matter how many times you write that, it won't make it true.

Additionally, this court case has nothing at all to do with MAP pricing and its a gross distortion to claim it does. MAP involves only authorized resellers. Grey market involves unauthorized importing of products. The outcome of this case will not affect MAP pricing in the least.

Plus, people whine about MAP pricing, but it has been a complete failure. The market determines the price and always will, regardless of MAP pricing. There is simply too much competition and too many loopholes.

MAP means Minimum ADVERTISED Price. It doesn't affect the price a retailer actually charges, only what they advertise the price at. If the MAP price reflects the market, then it will be sold at that price. But, when the market demands a different price, it will always float to that price.

Retailers simply resort to gimmicks when the MAP price is too high:

• Add the product to your cart to see the final price;
• These are open box items that we used for an in-store demo and can't be sold as new;
• Use the Canon Street Price program to contact the retailer;
• Buy this special 'bundle' for additional savings;

Even the manufacturers circumvent their own MAP prices:

• Special manufacturers instant "rebate";
• Buy this with a printer and you'll get a special rebate that is essentially more than the value of the printer, which we know you will actually just resell on eBay;
• We have "refurbished' this lens by painting a little red dot on it and taking it out of its original box.

As others have noted, Canon has actually been more generous toward grey market retailers than their competitors. If they really wanted to shut down the grey market, they would simply do as Nikon and Sony have done and refuse to service any grey market products.

This lawsuit is about three things: 1) forcing the grey market importers to stop the clearly fraudulent practices like altering serial numbers; 2) showing their authorized dealer network that they are standing up for them; and 3) reaching a compromise in which the grey market retailers pay Canon USA something to offset some of Canon USA's marketing and servicing costs.

Anyone who thinks that a defeat in court for Canon USA would somehow benefit consumers is simply foolish. If Canon were to lose outright, they will follow the lead of Nikon and Sony and refuse to touch a grey market product.

That's right. Finally someone that knows this business... Bravo.

 

[scrup]

You need serial numbers to download some software from the Canon site. I still don't know why a company would put a fake serial sticker over the original?

Canon warranty is a joke, its only one year. Maybe if they bumped it up to 3 or 5 years then there will be less of a grey market. The only time I needed service was outside the one year period anyway.

 

[Deleted member 91053]

There is only one organisation/company that is responsible fro the "Grey Market" and that is the manufacturer - in this case Canon.
My most recent purchase was a 7D Mark 2, bought in the UK with all duties and taxes paid. So it's exactly the same as buying from an authorised dealer (Canon have to honour the warranty - EU law) yet is 59% of the normal price! So a relatively small retailer can purchase Canon gear, ship it across the world, pay all the relevant duties + taxes and still sell it for 41% less than an authorised dealer. There is only one significant variable in this chain and that is Canon.
There is no excuse for tampering with the products (eg serial numbers) and, in the EU, no need. I wish Canon (and other manufacturers) would actually support their dealer network rather than pulling the carpet from under thier feet.

 

[Roo]

Anyone who thinks that a defeat in court for Canon USA would somehow benefit consumers is simply foolish. If Canon were to lose outright, they will follow the lead of Nikon and Sony and refuse to touch a grey market product.

Thank you, unfocused, for a far more erudite and comprehensive reply that I could have managed.

+1. an absolutely spot on summary

 

[AlanF]

My most recent purchase was a 7D Mark 2, bought in the UK with all duties and taxes paid. So it's exactly the same as buying from an authorised dealer (Canon have to honour the warranty - EU law)

That is, unfortunately, incorrect. Your contract is with the dealer not the manufacturer - see http://www.consumerrightsexpert.co.uk/shop-manufacturer-responsible-for-faulty-goods.html

Our sale of goods act is usually to the customers advantage because it prevents the dealers washing their hands of responsibility for faulty products. But, conversely, it takes responsibility away from manufacturers if you buy from dodgy dealers.

 

[Mikehit]

There is only one organisation/company that is responsible fro the "Grey Market" and that is the manufacturer - in this case Canon.

Nope. Grey markets are cheaper for two reasons: they don't have the overheads that bricks-and-mortar shops do and secondly almost all grey importers are avoiding import duty. Have you ever noticed how the saving on their prices is remarkably similar to the VAT/import duty?
As has been said above, Canon dictate only the advertised price, not the selling price. Photography magazines have loads of adverts saying 'save £500' when they are in fact referring to saving over the advertised price, not saving over high street price.

There is no excuse for tampering with the products (eg serial numbers) and, in the EU, no need. I wish Canon (and other manufacturers) would actually support their dealer network rather than pulling the carpet from under thier feet.

They are. By stopping grey importers from benefitting from Canon's service network. I really don't see what is so difficult to understand about that.
Unless of course you can tell us how else they should be supporting their dealer network.

 

[Mikehit]

My most recent purchase was a 7D Mark 2, bought in the UK with all duties and taxes paid. So it's exactly the same as buying from an authorised dealer (Canon have to honour the warranty - EU law) yet is 59% of the normal price! So a relatively small retailer can purchase Canon gear, ship it across the world, pay all the relevant duties + taxes and still sell it for 41% less than an authorised dealer. There is only one significant variable in this chain and that is Canon.

It would be interesting to know who this company way. Did you buy it from bricks and mortar? Or over the internet?
Many of these cheaper places are UK only in name and have a UK address for registration purposes - they are often Hong Kong companies and ship from there. Their second tactic is often to ship goods into the UK without declaring them and if the goods are discovered by customs the company pays the duty without complaint and works on the theory that only a small fraction will get caught in this way and the profit on the majority offsets the few times they pay the duty - so when they say all duties paid' what they really mean is 'it is paid if we get caught'. In addition to this many of them have T&C that says the purchaser is the importer - this avoids problems if at any time in the future you are stopped by customs when returning from holiday and they realise duty had not been paid on that item (it happens).
By the way, buying in the UK is NOT the same as 'buying from an authorised dealer'. Your warranty is with the shop, and any repairs are the responsibility of the shop - the difference is that when buying from an authorised dealer Canon, as part of the dealer network, agrees with the dealer that they (Canon) will pay the costs, not the dealer.