On Friday, two sites reported that online e-tailer Newegg seemed to be inadvertently shipping out counterfeit Intel CPUs to punters. A storm of letters from my learned fiends has ensued.
HardOCP reported that one of its forum members, a Vincent Waller from Oregon, had had the misfortune of unboxing his Core i7-920 only to discover it was a rather horrid fake. Waller took pictures and posted them on the forum. HardOCP reposted the photos in an article.
From the outside, the box looked completely legitimate, it was only when Waller got to the inside that, he said, things started to look fishy. It even contained a booklet of blank pages loosely stapled together to pass as the instruction manual. So someone went to remarkable efforts here.
HardOCP also reported that another source told its reporter that “300 counterfeit processors were purchased by Newegg". Fakes were delivered last week in a shipment totalling 2,000 pieces, it reported.
HardOCP also said its source said that Newegg had now "discovered" all 300 counterfeit processors.
Tech community site, Icrontic, picked up the HardOCP story and noted that Newegg had shipped replacements for the fake CPUs quickly to affected customers and that both the e-tailer and Intel were in the process of investigating where the chips came from.
A company called D&H Distributing doesn’t consider it legitimate for the free press took umbrage to this. In fact, the legal beagles over at D&H Distributing got so worked up over the horrifying gall and chutzpah of Icrontic and HardOCP for daring to ask a question that the company slapped both publications with a “cease and desist” order.
Sent by the lawyers representing D&H, Creim Macias Koenig & Frey, it reads in part:
“It has recently been brought to our attention that you are responsible for publishing on the internet, and specifically on your websites, untrue statements respecting allegedly counterfeit Intel Core i7 processors which you allege were sold to Newegg by D&H.
“This letter places you on notice that these statements are false. You have no basis for publishing these false and malicious statements about D & H. These false allegations are defamatory and disparaging to D&H”s business and business relations and have caused grave and irreparable damage to our client.”
At this point, we feel compelled to point out that neither publication “stated” anything, both simply reported what they had been told by their sources, and asked a legitimate question. In public. Which the media does from time to time.
D&H, however,threw its toys out of its pram, demanding that both sites “IMMEDIATELY (i) cease and desist posting such defamatory material about D&H.; (ii) remove the contact and any reference to D&H from your website; and, (iii) post an immediate retraction and apology which shall remain posted for not less than thirty days.”
Er, anything else? Would you like a hug to go with that? Or a journalistic promise never to quote sources or investigate legitimate problems ever again?
The letter comes with an “or else” too.
“If you fail to do so by 5 p.m., pst., on March 6, 2010, D&H will pursue all of its rights and remedies, including, without limitation, an action for libel, will seek full recovery for the damages caused by your untrue statements including punitive damages, as well as seek injunctive relief.”
Injunctive relief, eh? Sounds like something a few senna pods in Mssrs. Creim Macias Koenig & Frey’s tea could sort out.
Well, Brian Ambrozy, editor of Icrontic shouldn’t be overly worried. Mostly because the lawyers couldn’t even spell his name correctly on the threatening C&D letter.
.jpg){kind=icon}
2. It's rather strange that the boxes weren't marked as DEMO units, but as real processors. Doesn't Intel take pains to label DEMO units as such?
3. Creim Macias Koenig & Frey need to go 'f' themselves. Along with D&H's owners. If there was a legitimate error made, HardOCP would be only to glad to print that. If not, then stop with your efforts to intimidate an honest recounting of facts involved.
4. HardOCP should be willing to share with Intel, Newegg, and other involved parties investigating the source of their information. Sorry guys, you can't hide behind your declaration of "journalistic integrity" and fail to help clear up a possible criminal action against the public you supposedly are protecting.
Intel has already confirmed that these are counterfeit and has asked all those that come across one of these fake boxes to contact their suppliers for a replacement and IF the supplier refuses to contact their local police-authorities to deal with the matter!
I suggest D&H devise a story like Newegg did and shut up instead of posting threats to everyone around them.
It seems they were all scammed by someone (all D&H, Newegg and the end customer), but going around spreading legal threats does not solve the problem. Apologize to any affected and look into the matter to find who really ripped you off and take legal action against them, not the reporters or the users.
RICH WARGO IS LIKE
HARDOCP IS TEH LIAR
WHEN HARDOCP IS KONIGIN ALLER WAFFEN
A quick apology and replacement of any bad units will get their name out of the press a lot more quickly than demanding reparations from journalists. I'm sure Toyota has no plans to sue NBC.
If i do something wrong not intetionally and still the other guy is still provoking me, I guess instead of apology, I will give him a good kick in the ass..... that is common sense, guy....
http://hardware.slashdot.org/story/10/03/06/2250252/Some-Newegg-Customers-Received-Fake-Intel-Core-i7s
300 of any counterfeit product isn't something to minimize even though that's what D&H is doing. Instead of hiding, they should have come forward which would've been the right move. Instead, they took the cowardly, shallow road. And, now, Newegg is trying to minimize the same issue which is an equally horrible move especially in this economy. If anything, it now sounds like Newegg is trying to use their influence to help their "long time distributing partner" out.
Things will work out in the end for the customers. The same can't be said for companies that can't step up.
Quite possibly someone inside D&H's warehouse decided to make some cash replacing real units with fakes (300 units * $288 = $86K which isn't small potatoes). The fakes go to newegg who trusts its distributor and ship them and hilarity ensues.
My guess is that the fairy tale of 'Demo units' told by Newegg comes from D&H hence why they're threatening with a suit, IOW "that's the story and we're sticking to it", and that was the fatal mistake from whomever is calling the shots at D&H. Kyle will not back up and there is precious little you can do when you p!ss off someone with a good reputation, following and the will to fight.
I wouldn't be surprised if newegg gets a deluge of emails asking them to drop D&H in the following weeks, and not due to the issue at hand (which as sad as it is, isn't an easy thing to prevent) but because of the follow up.
As for revealing sources that goes against freedom of the press: once your reveal sources no one is willing to talk to you.
LOL HARD OCP AINT AFRAID TO POST SHIT ABOUT YOUR SHITTY SHIT
HARD OCP TELLS THE TRUTH
HARD OCP DONT GIVE 2 SHITS ABOUT YOU
HARD OCP REPORTS
ALL YOU PEOPLE TALKING SHIT ABOUT HARD OCP LIKE THEY SHIPPED THE PROCESSORS
HOW DAAAAR UUUUU
HOOW DOUBLE DARR UUUU
In today's world of cut throat competition, every business tries once in a while to cut corners to make up for the losses elsewhere and sometimes results in such goof-ups.
This will not end well for D&H and to a lesser extent Newegg. HardOCP I predict will (legally) prevail again so I'm not too worried about them in that regard. D&H should have hired better lawyers to tell them this cease and desist will NOT FLY in ANY court of the United States. Also, did they not realize HardOCP has the consumers' favor behind them? They have stood up for us in the past against Nvidia and Infinium Labs (and to a lesser extent, AMD/ATI and Intel) which is why people are now retaliating against D&H.
Well... someone start the popcorn. It's show time!
Buy your products from amazon.com next time, free shipping and no tax.
How was it determined that distributor in question, "D&H Distributing" was the one that supplied the fake chips. Was it Newegg.com themselves that determined the source of the chips or did the blogger himself somehow determine the source? If it was a case of a pilfaring employee then it is reasonable that it could have occurred anywhere in the supply chain. It only seems fair that if you are going to accuse someone you better be certain you got the right man.
Granted, even if your innocent, sending out a letter in such a threatening tone to an individual blogger will never help you look good in front of the buying public.
I am very dismayed that Newegg has lied about these being demo units rather than counterfeit units. I really do hope that Newegg drops D&H Distributing as a supplier; not because of the counterfeit product, but because of the legal threats toward Icrontic and HardOCP.
Situations like this are a regular sight when you get to larger scale distribution. Most of the big distis handle problems like this on a fairly regular basis, although hopefully not constantly. I *did* work at D&H, and at least from the point of view of a salesperson, they're pretty much a legit family owned operation. (By the way, for those clamoring for them to be shut down? Grow up. you're talking about several hundred to a few thousand plus american citizens losing their livelihoods for a simple mistake and some idiot's scam for a $90k shipment of CPU's.)
I used to deal with issues like this, although not on this scale, constantly. The error could have occurred anywhere in transit. Intel to D&H, D&H to Newegg, or may not even have been D&H at all, seeing as how HOCP doesn't reveal source to be investigated, and Intel won't to protect their resources.
The truth of the matter is, anyone who does know anything about this, isn't going to tell. HOCP CLAIMS to know, but won't reveal who it was that told them, so there's no proof. Frankly, D&H claiming it's incorrect is to be expected. It's nothing less than would happen if a newspaper made a false claim, they ask for a reprint. In the world of big business, kiddies, when you hurt someone's rep, they talk with their lawyers. And Newegg being the key player it is in so many markets, and with D&H being in the market position they are, they can't afford to let allegations like this screw up their rep.
Good move? probably not. But it's certainly no less than HardOCP should have expected if their trust in their source is less than sound.
If journalists start to put their sources in the fire just like that, no one would ever colaborate with the press anymore, so in the end, society will be left in the dark, crimes and scams will never be investigated or solved because no one would know about them.
Journalists have the right to keep their sources hidden because of that, and it's BETTER this way.
If D&H was difamed, that's up to the judge to decide. But I hardly think this case will hold any water. All there is to do is to find who switched those processors and put him/her in jail. And thank HardOCP for letting us know it happened and what is being done to solve this case.
Though their response is understandable, D&H have handled this matter in completely the wrong fashion. Sending out cease and desist letters to a forum with close to a hundred thousand members (many of whom work in the computer hardware industry) was not a bright idea to say the least. Neweggs reputation is the innocent bystander that is going to get hit with a few bullets over this.
I work in distribution for a company that handles hundreds of thousands of units of similarly valuable commodities and employee theft (not just our own, but employees of shipping companies, freight forwarders, and warehousing companies.) is a gigantic problem. Unfortunately the reality is that as more systems become automated it has to some degree made a criminals life easier as there isn't a person actually inspecting that a commodity is what it is supposed to be for quite a long time in the supply chain.
What are you talking about? Newegg for one, said directly to hardocp one of their long time partners shipped it, for all of us who know about computers, that narrows it down to 3 right there!! Also - the source was automatically legitimized when D&H delivered this C&D message obviously, or else D&H would have done an investigation themselves; deductive reasoning.
So why don't you stop backing up companies and corporations and start backing up your fellow consumers, enthusiast - or is that just it?
Are you NOT hardware enthusiasts at all, but really work for corporation's? Corporations that wish to operate in secrecy and provide a false sense of security to their customers.
Shame on you, the only reason [H]ardOCP cares at all is because one of its long time forum members got one of these fake CPU's, and to them that's like their family receiving one - so they are all pissed off.
I like and respect that.
I used to work in the restaurant business, If let one of my co-workers swipe the order, i would have been FIRED. If something wrong had occurred with an order and i shouted at a guest I would have been FIRED. If i had ever threatened a guest I would have been FIRED. If i made an honest mistake I took responsibility for it and set it right. if I had screwed up 15% of an order I would have had to fix the order would have had to get a manager to comp it and would likely have been pulled aside and gotten a threat of being fired. That was the movement of food from one place to another, this is the movement of $300 processors. creditability should be questioned. If they have lost business through this ordeal it will have been caused by their own hand. You don't threaten your customers , period end of discussion.
If employee theft is such a wide spread issue closer attention must be paid to employees, if they cant prove themselves trustworthy don't trust them. update inventory systems to increase productivity and security simultaneously and criminally prosecute thieves.
Looks like the disti D&H put out those C&D letters because they WEREN'T the people at fault. Hmmm...
http://www.prsurvival.com/atlanta-press-releases.html
Now D&H looks like an asshole for C&Ding [H]ardOCP even thought it wasn't even them who shipped the counterfeits.
[H]ardOCP is a group of enthusiasts/consumers, they don’t care who did it, they are just pissed because one of their long time forum members got one of the counterfeits.
Now nobody likes you D&H, even if you DIDN’T do it. lolz
For those that commented about D&H being jerks/etc/etc. for the cease and desist, like I said... This is something you see in the business world. They're not Techdata, or Ingram Micro, who can soak up losses by the big backing they have. I agree, probably not the best PR move. But there's a lot of forces at play here.
1) Enthusiasts? I love you guys, I'm a total geek too, I love hardware. But we've all got to realize, we're technically a niche market. The massive amount of hardware is directed at a populace who knows nothing about computers. Newegg sells to the normals as well as the geeks. Admitted, we're a BIG niche market, and a lot of what we want is what drives tech onward. It's the early adopters that help to push the goodies to be better/cheaper/etc. But they're less worried about a forum that reported a piece of news incorrectly without doublechecking it's sources, than they are their rep. Just common sense. They protected their best interests.
2) For everyone that jumped on the bandwagon, there you have it. Forumites that report the news aren't necessarily any smarter or in touch than the rest of us, they just often are someone who knows someone. I could have claimed outright earlier that this could never be, since I still know people in the organization there. The man handling Intel at D&H is in fact a gamer, enthusiast, and if this HAD happened within the company, would be just as outraged as the rest of us. He takes handling Intel's rep out there extremely seriously and loves their stuff, as well as helped me build my first beast when I started out there.
3) Hard lessons in big business: Shipping issues are a way of life. With the rise of online shopping, people are STILL only now just getting to realize how sadly lucrative it is so often to pull off shipment scams. Think about every shipping location you know, and how many of those are populated in inner-city areas, staffed by people making close to minimum wage. Still surprised by how much goes missing? Try working a sales desk sometime, you get a better perspective on how much of your customers' merchandise goes that way. Better yet, work as a credit rep, then you really see the claims. I've head stories of literal pallets of expensive merchandise 'ghosting'. Without a trace. Best bet? Instead of griping, trust in those companies like newegg, who when confronted with their mistake, take care of the problem reasonably and justly.
I'm a big fan of newegg, in probably 5-10 years now, I've only ever had to return one item to them, and that was a simple faulty stick of DOA memory. even then, the only gripe I had was with the shipping company, never newegg internally. I'm not thrilled about the misinformation about the 'demo unit' thing, but I suspect that was more that they were caught under fire, and repeated the only thing they'd been told by the disti in question. That's really just how it goes. Until they complete their investigations, even they won't completely know what happened here.
Oh, and finally: all those who said something about D&H not conducting their own investigation? I guarantee you this story wasn't on the page at HOCP for more than a few hours tops before calls were being made between intel and D&H to find out what happened and why they were being implicated. Beyond that, I'm betting there's further investigations going on into ANY transactions they have happening now to ensure this does NOT happen from them, as well.
Newegg and Intel have publicly confirmed that D&H Distributing was not the supplier of the fraudulent products. The IT blogs that initially reported the information were misinformed on the source of the merchandise, and those bloggers didn't contact D&H for corroboration when posting their reports.
As you may have already seen, mainstream media such as CRN are now reporting that D&H was not the origin of the fake products. ChannelWeb has also posted a blog supporting D&H and criticizing the original site that incorrectly named us in the story. HardOCP, the site that broke the story and first implicated D&H, has offered a sincere apology overnight.
From CRN’s web site this morning:
D&H Distributing Co. Inc., a Harrisburg, Pa.-based distributor, was initially "and incorrectly" reported in some accounts to be the supplier of the counterfeit processors. Newegg confirmed that D&H had nothing to do with the fake CPUs.
"Contrary to any speculation, D&H Distributing is not the vendor that supplied us with the Intel Core i7-920 CPUs in question," Newegg said in the latter statement.
From HardOCP last evening:
“At this time we offer our apologies to D&H Distributing for naming it as the supplying distributor . . . We will be investigating further as to why we were misinformed on this detail.
Again, my apologies to D&H Distributing.”
https://www.dandh.com/v4/view?pageReq=dhmainns
This should be a good journalistic experience for those getting sued. The next time HardOCP makes a damaging claim against a company from an unnamed source, I'm guessing they'll at least call that company for a comment before they report. If they had done that here, HardOCP could have went back to Newegg with D&H's rebuttal and determined who the real supplier of the fakes was.
Is it really HardOCP's fault that NewEgg gave them bad info? They simply were relaying the info that NewEgg gave them and had trusted to be accurate. Maybe D&H should give NewEgg a C&D for initially providing the false info to the forum member. Really, how the hell else would the HardOCP member have gotten D&H's name initially to have made such a claim if NewEgg hadn't given it to them to start with!
Once NewEgg "got their eggs in a row" they then told the victim at HardOCP that it was NOT D&H as they initially thought, that it was in fact another vendor. And as soon as NewEgg provided them with that info, they posted that to their site and set the facts straight.
You may claim "bad journalism" but HardOCP is nothing more than a web-based forum and what news they provide is for their forum members. I'm sure they don't print newspapers and I'm sure they don't sell them for 50 cents a piece at your local grocery store and gas stations. I am sure you would have been pretty angry if you had ordered a new i7 processor and got a fake in the mail and would have probably vented to your favorite forum in the same manner they did. I know I probably would have.