UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION

In The Matter of

DELL COMPUTER CORPORATION, a corporation.

DOCKET NO.

COMPLAINT

The Federal Trade Commission, having reason to believe that Dell Computer Corporation, a corporation ("respondent"), has violated the provisions of the Federal Trade Commission Act, 15 U.S.C. 45-58, as amended, the Consumer Leasing Act, 15 U.S.C.  1667-1667e, as amended, and its implementing Regulation M, 12 C.F.R.  213, as amended, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Dell Computer Corporation is a Delaware corporation with its principal office or place of business at One Dell Way, Round Rock, Texas 78682. Respondent markets computer systems for sale or lease to consumers.

2. Respondent has disseminated advertisements to the public that promote consumer leases, as the terms "advertisement" and "consumer lease" are defined in Section 213.2 of Regulation M, 12 C.F.R.  213.2, as amended.

3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C.  44.

4. Respondent has disseminated or has caused to be disseminated consumer lease advertisements ("lease advertisements") for computer systems, including but not necessarily limited to the attached Dell Exhibits A and B. Dell Exhibit A is an electronic advertisement. Dell Exhibit B is a television advertisement. These lease advertisements contain the following statements:

A.

"DELL DIMENSION XPSR . . .

Configured Price*
$2,288
$86/month
Business Personal . . .
"

[A fine print disclosure at the bottom of the ad states:

". . .Personal leasing arranged by Dell Financial Services L.P., an independent entity, to qualified customers. Amount of monthly lease payments above is based upon 36 month lease. Above monthly lease payments exclude taxes which may vary (for example, Hartford City, IN, sales tax: $4.30/month); shipping cost due with first payment; no security deposit required; subject to credit approval and availability. Lease terms are subject to change without notice."] (Dell Exhibit A)

B.

[Audio:] ". . . For just $99 a month, you can lease this Dell Dimension XPS with a 233 MHz Intel Pentium Processor."

[Video:] "$99/MONTH, 24 MOs"

[A fine print disclosure at the bottom of the ad states:

". . .Personal leasing arranged by Dell Financial Services L.P., an independent entity; Amount of monthly lease payments based upon 24-month lease. First and last monthly lease payments due prior to delivery: $197. Above monthly lease payments exclude tax which may vary (for example, Hartford City, IN, sales tax: $4.93); shipping charges due with second payment; no security deposit required; subject to credit approval and availability. Lease terms subject to change without notice. For details, call 1-800-955-3355. . . ."] (Dell Exhibit B)

FEDERAL TRADE COMMISSION ACT VIOLATIONS
COUNT I: Failure to Disclose Adequately that Transaction Advertised is a Lease

5. In lease advertisements, including but not necessarily limited to Dell Exhibit A, respondent has represented, expressly or by implication, that consumers can purchase the advertised computer systems for the monthly payment amounts prominently stated in the advertisements. These advertisements do not disclose adequately that the advertised monthly payment amounts are components of lease offers.

6. The fact that the offers pertain to leases would be material to consumers in deciding whether to lease or purchase a computer from respondent. The failure to disclose adequately that fact, in light of the representation made, was, and is, a deceptive practice.

7. Respondent's practices constitute deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.  45(a).

COUNT II: Failure to Disclose Adequately Lease Terms

8. In lease advertisements, including but not necessarily limited to Dell Exhibit A and B, respondent has represented, expressly or by implication, that consumers can obtain the advertised computer systems at the terms prominently stated in the advertisements, including but not necessarily limited to the monthly payment amount.

9. These lease advertisements have failed to disclose adequately additional terms pertaining to the lease offer, such as the total amount of any payments due at lease inception or the term of the lease. This information would be material to consumers in deciding whether to lease a computer system from respondent. The failure to disclose these additional terms, in light of the representation made, was, and is, a deceptive practice.

10. Respondent's practices constitute deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C.  45(a).

CONSUMER LEASING ACT AND REGULATION M VIOLATIONS

Count III: Failure to Disclose Required Information
Clearly and Conspicuously

11. Respondent's lease advertisements, including but not necessarily limited to Dell Exhibits A and B, state a monthly payment amount, but fail to disclose clearly and conspicuously certain additional terms required by the Consumer Leasing Act and Regulation M, including one or more of the following terms:

a. that the transaction advertised is a lease;

b. the total amount due prior to or at consummation, or by delivery, if delivery occurs after consummation. This total amount may: 1) exclude third-party fees that vary by state or locality, such as taxes, and disclose that fact or 2) provide a total that includes third-party fees based on a particular state or locality as long as that fact and the fact that such fees may vary by state or locality are disclosed;

c. whether or not a security deposit is required;

d. the number, amounts, and timing of scheduled payments; and

e. that an extra charge may be imposed at the end of the lease term in a lease where the liability of the consumer is based on the difference between the residual value of the leased property and its realized value at the end of the lease term.

12. Respondent's practices have violated Section 184 of the Consumer Leasing Act, 15 U.S.C.  1667c, and Section 213.7 of Regulation M, 12 C.F.R. 213.7.

THEREFORE, the Federal Trade Commission this ___ day of _________, 1999, has issued this complaint against respondents.

By the Commission.

Donald S. Clark
Secretary

SEAL: