Wang Ordered to Rescind Higher License Fees : Computers: A judge agrees that a dealer’s business was harmed by the firm’s big increase in fees on resold hardware. Wang said it may appeal.

In a victory for independent computer dealers, a federal judge has ordered Wang Laboratories Inc. to roll back major price increases for licenses needed when used computer hardware is resold.

U.S. District Judge Charles Legge, in a ruling made public Wednesday, said computer reseller TSJ Inc. had shown a likelihood of proving at trial that Wang’s April 1 price changes violated antitrust law and were an attempt to monopolize the market.

Wang, based in Lowell, Mass., said it was considering an appeal and was confident that its policy would be upheld.

TSJ, whose main products are used and upgraded Wang minicomputer hardware, said it has had no new customers since April 1 and will go out of business within three months because of Wang’s new policy. An analyst hired by TSJ estimated the total market for independent resale of Wang equipment at $100 million.

The evidence shows Wang’s new policy “has changed the market from a seller’s market to a buyer’s market and thereby impairs the capacity of TSJ and other companies that (sell) Wang’s equipment to compete,” Legge said.

The price change was not for the computer equipment itself, but for a license to use operating software, copyrighted and available only from Wang.

TSJ said it and other resellers were able to charge at least 25% less than Wang for used Wang computer equipment before the price change.

“TSJ’s victory has saved an entire industry from oblivion,” said Thomas Reardon of Minneapolis, president of the Wang Independent Dealers Assn. “The big beneficiary will be the end-user, who will again be able to purchase used Wang equipment at competitive prices.”

Wang responded that it “believes that its pricing policy is neither anti-competitive nor unfair in that it provides Wang reasonable compensation for the value of its software,” the company said in a statement.

Legge said the new policy has forced TSJ and other resellers to make substantial increases in prices for used or upgraded Wang hardware and software packages, while leaving the prices essentially unchanged for customers who buy directly from Wang.

Previously, Wang had charged customers of resellers $1,000 for a license when buying used, unchanged computer equipment and nothing for a license when buying upgraded equipment, Legge said.

After April 1, he said, those customers were charged $17,500 for a license when buying used equipment and $35,000 for upgrades.

Wang said it charged its own customers the same license fee. But Legge said the fee was simply allocated as a portion of Wang’s overall purchase price, which was basically unchanged.

Legge said TSJ was likely to prove Wang had engaged in an illegal action by using its control over its software license, and its economic power, to force customers to buy used computer equipment from Wang rather than independent dealers.

The judge said there was evidence that the software license and the hardware were distinct products and that TSJ’s loss of business was the direct result of the pricing changes.