Dell Agrees to Pay Penalty

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On the same day that it agreed to pay the largest ever civil penalty ever for a single defendant for violating the Federal Trade Commission's Mail Order Rule, Dell Computer Corp. announced price cuts April 2 on server and commercial desktop systems.

Dell, Round Rock, TX, the nation's leading direct seller of PCs, will pay $800,000 to settle a complaint that in 1995, it falsely advertised a Dell Dimension computer system bundled with a package of third-party software that was not ready to be shipped. In instances where the software arrived well after the computer, Dell violated the rule by not offering consumers the option of consenting to the delay or canceling their orders.

Dell's built-customer-order structure has enabled the company to reduce inventory to seven days' worth of computer in the most recent quarter, prompting price cuts of 15.4 percent on its PowerEdge servers and as much as 12 percent on its OptiPlex desktop computers. Last week, the company announced it was reducing prices of its personal workstations by as much as 11.7 percent.

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