UNITED STATES OF AMERICA
In The Matter of
MICRON ELECTRONICS, INC., a corporation.
The Federal Trade Commission, having reason to believe that Micron Electronics, Inc., 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 Micron Electronics, Inc. is a Minnesota corporation with its principal office or place of business at 900 East Karcher Road, Nampa, Idaho 83687. 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 Micron Exhibits A, B, and C. Micron Exhibit A is a magazine advertisement. Micron Exhibit B is a newspaper advertisement. Micron Exhibit C is an electronic advertisement. These lease advertisements contain the following statements:
. . .
Total System Price as Configured:$2499
FEDERAL TRADE COMMISSION ACT VIOLATIONS
COUNT I: Failure to Disclose, and/or Failure to Disclose Adequately, Lease Terms
5. In lease advertisements, including but not necessarily limited to Micron Exhibits A, B, and C, 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.
6. These lease advertisements have failed to disclose, and/or failed to disclose adequately, additional terms pertaining to the lease offer, such as the total amount of any payments due at lease inception and/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, and/or to disclose adequately, these additional terms, 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).
CONSUMER LEASING ACT AND REGULATION M VIOLATIONS
Count II: Failure to Disclose, and/or Failure to Disclose Clearly and Conspicuously, Required Information
8. Respondent's lease advertisements, including but not necessarily limited to Micron Exhibits A, B, and C, state a monthly payment amount, but fail to disclose, and/or 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:
9. 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