Fake Processors, Passing The Blame, Legal Nastygrams And More...

from the oh-boy dept

Mon, Mar 8th 2010 1:33pm — Mike Masnick

Richard Corsale writes in to let us know about how popular electronics e-commerce site NewEgg apparently received 300 totally fake Intel processors and at least some of them were sold. They're not processors at all. They're just made to look like them from the outside. NewEgg's initial response was to claim that its supplier shipped them demo boxes by accident -- but Intel is claiming that's not true, and the boxes are not official Intel demo boxes, but counterfeit demo boxes. Then, to make the story even odder, many publications reported that NewEgg's supplier for these fake processors was a company called D&H -- and D&H's response to all of these stories is to send out legal nastygrams to anyone reporting on the story and mentioning D&H. Perhaps it's worth giving D&H the benefit of the doubt, but why not just come out and say "hey, it wasn't us," and get NewEgg to confirm or deny who provided the fake processors before sending out a legal threat?

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Filed Under: blame, cease and desist, fakes, nastygrams, processors
Companies: d&h, intel, newegg

33 Comments

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ECA (profile), 8 Mar 2010 @ 1:49pm

This could be fun
OK,
this could be allot of fun, and show some interesting things about CORPS, if its followed thru and we get the WHOLE story.

How corps will buy OUTSIDE the USA to get products cheaper..As SAMS CLUB did with watches from Europe, trying to get lower pricing, compared to whats paid in the USA.

Mis-management at certain levels in production.

Or just a BIG CON JOB from some small company, that had a great deal on 300 CPU.
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:Lobo Santo (profile), 8 Mar 2010 @ 1:54pm

Re: This could be fun
Honestly... if somebody can make a real, working product; ship it across the ocean and STILL offer it at a lower price than the local suppliers of same product... well, somebody is over-charging somebody else for something, or perhaps somebody cannot compete in the market and should find a new industry.

Seeking the lowest supplier price is simple survival behaviour for any company.

Wanna hear about a real scam? I've got friends who can buy cartons of Marlboro cigarettes from Europe, and after paying for intercontinental shipping the total cost comes out to be about 18% of what they cost here.
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interval, 8 Mar 2010 @ 2:07pm

Re: Re: This could be fun
I have a friend who smokes, to save money on cigarettes he simply rolls his own. He has this metal rolling machine with a crank (its bigger than the little plastic rolling machines you can normally find in tobacco shops), bags of tobacco, and boxes of empty paper tubes with filters on one end. he doesn't even have to go without filters. He even puts them in a silver cigarette case like they did back in the 40's. And he pays pennies on the dollar for his cigarette.

I'm not a smoker, but it is interesting to me to see the illegal lengths people will go to to save money when a perfectly legal answer is staring you in the face. Back before there really was a cigarette industry people used to roll their cigarette by hand all the time.
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Anonymous Coward, 8 Mar 2010 @ 2:10pm

Re: Re: This could be fun
remember that the reason a lot of stuff is "cheaper" is because people are only getting paid 50 cents an hour to make it. Ontop of that they don't have as manu regulations to follow in other countries. You can run a whole factory in china for pennies compared to running one in the United States.
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Cherny Bole, 8 Mar 2010 @ 2:13pm

Re: Re: This could be fun
"Yes, and I can't even taste the toxic contaminants except for the lead which has a nice sweet taste. I can use all those savings for my chelation therapy."
Maybe your cheap ass friends should stop smoking and find some other way to look cool, like maybe exercising.
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Anonymous Coward, 8 Mar 2010 @ 2:19pm

I work for Intel, every few years we see con jobs like this, We've found situations where the same fab that makes out stuff is making bad chips(they will run but use substandard process thats cheaper) , we've found fake packaging on industrial levels.

This is not a new event, its only big news because someone made the bad choice to do such a good job at fake packages while not even making the product.

Cisco has the same issue, only the fakes are a lot harder to spot because the fakes ARE coming out of the same factory's but using substandard parts or QA rejects.

Anyone who got a bad box, follow the instructions New Egg gave to get a refund.
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Cyryl, 8 Mar 2010 @ 2:27pm

Way to make another ill-educated opinion, Techdirt
Yet another decisive idiosyncratic opinion doled out by Techdirt.

All I can do is challenge someone here to answer the simple question:

"WHY would a high-profile company like NewEgg knowingly guarantee damage to their good reputation by shipping out fake product?"

NewEgg knows damn good and well that they and the products that they sell are continually and inevitably reviewed (and scrutinized) by most of their customers? When the integrity of a product is questioned, most people turn to the reviews on NewEgg for answers. Most of you reading this have gone to the product pages on NewEgg SOLELY for that reason. I know that I have countless times.

NewEgg knows this. So why would they have a stock of approximately 2,000 i7 processors and have 15% of that stock shipped out - knowing it was fake? Did they think that the 15% of that customer base wouldn't notice? Did they think that the 15% wouldn't bum-rush the internet with complaints that would make headlines in internet news feeds all over the WWW?

If you blame NewEgg for this, you've GOT to be an idiot.

The only thing that I can say against NewEgg on that is that they apparently need to step up their QA. This wouldn't be the first time they've had issues with sending out quality product... But their track record PROVES that they've taken care of the bullshit if you call them on it. I myself received an OEM processor that had dents in the copper on the top of it. A phone call was all it took. They not only gave me an RA on the CPU and mobo that I had bought, but also gave me a $25 credit and free overnight shipping on my next order for my trouble.

I'm hard-pressed to believe I'm actually reading so many people's comments and finding that they're actually trying to place blame on NewEgg. Be realistic here, people.
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Anonymous Coward, 8 Mar 2010 @ 2:37pm

Re: Way to make another ill-educated opinion, Techdirt
I have no idea which site you're reading, but NO ONE here has pinned the blame on TechDirt, other than the fact that they did (unknowingly) ship out counterfeit goods.

Given the content of your comment, it's hilarious that you would falsely accuse TechDirt of something.
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Blatant Coward (profile), 8 Mar 2010 @ 2:37pm

Make up my mind!
From the letter from D&H:

"(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."

So do you want us to 3 apologize to D&H or 2 remove all mention of D&H? I'll just go with 1 D&H, you are a sorry company.
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aguywhoneedstenbucks (profile), 8 Mar 2010 @ 2:38pm

Re: Re: Re: This could be fun
Sorry, was this a bash smokers thread or a ways to save money thread? I didn't realize we were here to be jackasses. Thank you so much. This is going to change my whole life.

Maybe you should find another way to be cool, like not hijacking a thread to put down someone's life choice who isn't even here to defend themselves.
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Anonymous Coward, 8 Mar 2010 @ 2:42pm

Re: Re: This could be fun
he's probably just by-passing the taxes some how which is the real reason that smokes cost so much in the US now.
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william (profile), 8 Mar 2010 @ 2:46pm

Re: Re: This could be fun
uhh... I think the problem here is that those are "non-working fakes", ie. someone bought some cement blocks, paint it black and attach power plug on it and try to sell it to you as power bricks for your laptop...
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Mike Read (profile), 8 Mar 2010 @ 2:47pm

Re: Way to make another ill-educated opinion, Techdirt
"WHY would a high-profile company like NewEgg knowingly guarantee damage to their good reputation by shipping out fake product?"

I think the somewhat obvious answer is this: They didn't know it was fake.

A company this large cannot afford to be involved in a scam of this nature, it would damage their image beyond repair, and they would lose far more customers - and so more money - than the scam could compensate for.

What is most likely is some individuals at stock or factory level swapped out some legitimate products for their fakes, and then proceeded to sell the stolen goods through other channels.
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Mike Masnick (profile), 8 Mar 2010 @ 2:50pm

Re: Way to make another ill-educated opinion, Techdirt
If you blame NewEgg for this, you've GOT to be an idiot.

Um, dude. Slow down. We didn't blame NewEgg for this. At all.
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Anonymous Coward, 8 Mar 2010 @ 3:19pm

Re: Re: Re: This could be fun
"Yes, and I can't even taste the toxic contaminants except for the lead which has a nice sweet taste. I can use all those savings for my chelation therapy."

So you're saying European cigarettes have high lead levels?
Citation, please.
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ECA (profile), 8 Mar 2010 @ 3:25pm

Re: Way to make another ill-educated opinion, Techdirt
WOW,
nice post..
It shows your educational standing, and your word comprehension VERY WELL..
and proves that a College grad is more stupid then a High school drop out. At least the drop out wouldnt SAY anything.

And how would you "Step up Q&A"? rip open a Closed box and test every chip?? You are an idiot, and you have displayed it Publicly.. you are Worse then a Streaker at a Rugby match.

First rule of communication. SHUT up and listen. opening your mouth only dispels any ones thoughts about your intelligence.
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Anonymous Coward, 8 Mar 2010 @ 3:28pm

Re: Re: Re: This could be fun
I know some states are looking to tax loose tobacco (or raise taxes on it). I have a friend who does the same thing (w/filters and the silver cigarette case). Of course he also bought a $500 lighter, so I don't how much he's actually saved.
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Skeptical Cynic (profile), 8 Mar 2010 @ 3:29pm

Re: This could be fun
Just FYI I work in the I.T. industry and D&H is NOT a small company. Over 900 employees.
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Anonymous Coward, 8 Mar 2010 @ 3:34pm

Re: Re: This could be fun
Quote:[Wanna hear about a real scam? I've got friends who can buy cartons of Marlboro cigarettes from Europe, and after paying for intercontinental shipping the total cost comes out to be about 18% of what they cost here.]-end quote

In Canada that's tax evasion and because it's a tobacco product warrant's jail time..no kidding
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ECA (profile), 8 Mar 2010 @ 3:34pm

Cyryl
As mike said..

I can show at least 6 places this could happen.
From the Maker plant, from 1 of the 3 distributors that handled the parts, from the retail seller. Its a tangled web, and NEWEGG and the rest are going to have fun locating the idiot that did it.

Considering the packaging was said to be perfect match. Its hard to say that it wasnt done at the manufacturing plant or on the FIRST level of distribution/shipping/handling. now to track back to the beginning, and find out what happened.
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Freedom, 8 Mar 2010 @ 4:17pm

Bigger Issues...
This is actually a pretty big issue as D&H is an authorized Intel Distributor. If they sold product to NewEgg that wasn't sourced directly from Intel this probably wouldn't sit well with Intel on a few levels. I can definitely see why they responded this way.

FWIW, while I'm sure D&H sells processors to NewEgg, I'd be surprised if a traditional distributor like D&H would have sold them grey market goods (most likely source for these units) - they just have too much too lose.

Frankly, I see D&H's point on this. There is no proof of their involvement and just because they are ONE of the vendors that NewEgg gets processors from they are getting the blame. In a perfect world, okay, be nice, but the bottom line is that they need the legal threat in case you don't take it down so they can go to the next level. Sadly, it is more time/resource efficient to be an a** instead. Or in blunt words, grow a pair!

Freedom
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Tom Landry (profile), 8 Mar 2010 @ 4:24pm

This is truly unfortunate for NewEgg. There are very very few companies that I can say I'm loyal to and NewEgg is one of them.

I had bought a video card that had a bad GPU and sent it back for a replacement. Not only did they replace it but they wanted to reward me for being such a loyal customer (I had been a regular at the time). They called 6 times before they finally got me on the phone just to make sure I knew about my "reward" (some rather expensive RAM at the time) and whether I was happy or not. If half the businesses in the US were run like NewEgg we'd be in pretty damn good shape.
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Freedom, 8 Mar 2010 @ 4:33pm

Huh?
>> If half the businesses in the US were run like NewEgg we'd be in pretty damn good shape.

Sadly, if half the businesses were run like that we'd all come to expect it, take it for granted and so on, and then find someone/something else to complain about :)!

Freedom
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loki_racer, 8 Mar 2010 @ 4:53pm

Re: Cyryl
The packaging wasn't perfect. There were typos on the box.
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Nastybutler77 (profile), 8 Mar 2010 @ 5:14pm

Re: Way to make another ill-educated opinion, Techdirt
Better to remain silent and be thought a fool than to speak out and remove all doubt.
~Abraham Lincoln

You've just removed all doubt Cyryl. Nice job.
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ECA (profile), 8 Mar 2010 @ 5:18pm

Re: Re: Cyryl
http://hardocp.com/article/2010/03/05/newegg_selling_fake_intel_cpus

But you didnt say anything else. WOW, you are fun to pick on.
It still must be at the beginning of the distribution system. Before D&H. AS a later packaging would either be COPIED direct from an existing box, or at least would have gone thru a spell checker. I would hope.
If you want to add information, how is your french and german? read the other TXT to see if they are properly written.
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Cherny Bole, 8 Mar 2010 @ 5:42pm

Re: Re: Re: Re: This could be fun
There is data to show increased lead levels with smoking. Maybe a study needs to be done comparing European and American made cigarettes.
My guess was a lot of those "European" cigarettes are actually coming from Russia and China. Apparently it is less than 10% http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/eccc14&div=20 &id=&page=
And this story from 2008
http://www.guardian.co.uk/business/2008/oct/20/tobaccoindustry-russia-europe-smuggling-cigarettes

For goodness sake, even the toys coming from China have lead in them and they have much more oversight on quality than I assume the cig's do.
http://www.informaworld.com/smpp/content~content=a723606591&db=all
http://medicolegal.trip od.com/toxicchemicals.htm

Now pull your panties out of their wad and go back to giving us second hand cancer will you.
BTW you can find practically any information on the inter-web thing using something called a search engine.

Now, I'm off to my Tea Party!
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Anonymous Coward, 8 Mar 2010 @ 6:01pm

Re: Re: Re: Re: Re: This could be fun
Maybe a study needs to be done comparing European and American made cigarettes.

So you were making that comparison without anything to back it up? In other words, you were just making crap up.

Now, I'm off to my Tea Party!

Figures.
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Bryan James, 8 Mar 2010 @ 6:20pm

New Egg statement
newegg just put a statement on Facebook stating D&H didn't have anything to do with this. http://www.facebook.com/note.php?note_id=400548248571
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Anonymous Coward, 8 Mar 2010 @ 7:12pm

Let's assume that D&H has nothing to do with this, which is an increasingly safe assumption.

What's amazing is the position here: rather than hold people who are lying explicitly about D&H's involvement (or implying it) accountable, we're going to lambast D&H for trying to keep lies from being spread.
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Mike Masnick (profile), 8 Mar 2010 @ 10:17pm

Re:
What's amazing is the position here: rather than hold people who are lying explicitly about D&H's involvement (or implying it) accountable, we're going to lambast D&H for trying to keep lies from being spread.

While it may be true that other sites lambasted D&H, we clearly said we were giving them the benefit of the doubt -- though I still think their choice of responses was the wrong way to go about it.
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Anonymous Coward, 8 Mar 2010 @ 11:44pm

"we clearly said we were giving them the benefit of the doubt"

No, you said "Perhaps it's worth giving D&H the benefit of the doubt."

"other sites lambasted D&H"

In this article, the one you wrote, there is no criticism whatsoever of various parties who likely libeled D&H, and one criticism of D&H for responding to libel in a way you considered inappropriate. So 100% of the criticism in this article was leveled at the victim of libel. Excellent.
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kb, 9 Mar 2010 @ 4:41am

Re: Re: Way to make another ill-educated opinion, Techdirt
What did NewEgg do for it's customers? I'm sure they got refunds or replacements, but it'd be nice to mention that in the story.
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