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Educational Discounts and Price Discrimination Legalities in the UK
March 27, 2014 2:57 AM   Subscribe

A variety of computer and software manufacturers offer "educational discounts" to students and staff. Which is clearly price discrimination based on the status of the purchaser. I just have two questions related to the practice of providing educational discounts. a) How is it legal for a retailer to use price discrimination (as a long-term marketing tactic) to sell to people based on educational role, when say price discrimination based on say sexual preferences would not be legal. b) Is a customer legally required to represent themselves honestly to a retailer?

If person A (a student) buys a computer from say, Apple on the behalf of person B. How can A be legally obliged to answer honestly to a private for profit retailer about whom the computer is for? What right does Apple have to expect an honest answer to the question "is this computer for your own personal use?"

A lot of responses to this say that its "fraud". But it seems that really its over-reach of the retailer. Can a retailer dictate by whom and how a consumer product is to be used?

It seems very different to lying to a government body or agency. Does a supermarket have a legally enforceable right to refuse to sell you an apple if they know you intend to merely smash it to pieces?
posted by mary8nne to Law & Government (14 answers total) 2 users marked this as a favorite
 
Price discrimination isn't illegal, as long as the buyer isn't part of a protected class. "People who aren't in college" are not a protected class. It's basically just a coupon for people that go to college. Companies also offer special deals for people that work for big companies or the federal government or military (or that use Groupon or clip coupons).

Also, you can lie to Apple. They aren't going to sue you or investigate you. The size of the discount barely makes a dent in their profit margin.
posted by empath at 3:15 AM on March 27 [3 favorites]


With regard to your first question, educational status isn’t one of the ‘protected characteristics’ covered by UK discrimination legislation, whereas, for example, sexual orientation is. On preview: what empath said.
posted by misteraitch at 3:18 AM on March 27 [1 favorite]


I"m not that interested in whether Apple would sue.
But whether or not Apple would have grounds to sue if you say, bought a computer for a non-student friend?

And what would they be?

Can I sue someone if I sell them something cheaply because they say, tell me their mother is sick, but then it turns out their mother is not sick?
posted by mary8nne at 3:26 AM on March 27


Basically, Apple depends on making the process of getting the educational discount difficult enough to get around that most people just pay the full price, but if you're going to go through all the trouble of getting a student to buy it for you, then they aren't going to stop you. You can also get stuff through the employee discount if you know someone that works in one of the stores that's willing to buy it for you. The moral question of lying to a massive multinational corporation to save a few dollars is up to you to decide.
posted by empath at 3:27 AM on March 27


But whether or not Apple would have grounds to sue if you say, bought a computer for a non-student friend?

No. They can just not sell the thing to you if they think you are lying. Once you bought it, you bought it. They limit how many computers students and employees can buy per year with the discount to prevent people doing too much of this, though.
posted by empath at 3:28 AM on March 27


But whether or not Apple would have grounds to sue if you say, bought a computer for a non-student friend?

I believe you would have invalidated the contract between Apple and yourself, which might be actionable.
posted by pompomtom at 3:47 AM on March 27


This isn't legal advice and I don't know UK specifics, but I suspect the question of whether it would violate any purchase agreement and leave you liable for the price difference probably depends heavily on the exact language of all the stuff you usually click through without reading when you sign up for such things. At least in principle, you can write a contract with all kinds of provisions, including for how the item is to be used. For example, a lot of charitable donations are made with agreements in place that the funds or property will only be used for a particular sort of charitable purpose. In reality, in the US there are tons of little fiddly bits about things they've decided you can't do because they are deemed bad for society, and I'm sure the UK is similar in this, so I don't know if you can, specifically, do that with the sale of a computer at an educational discount in that particular country. Just, in general, it's not as strange as you might think to add ongoing conditions to a property transfer. Hard to enforce, sometimes, sure, but not strange.

You're basically not really obliged to tell Apple anything, but Apple's not obliged to sell to you.
posted by Sequence at 4:13 AM on March 27 [1 favorite]


Yeah I"m not sure what you agree to when you press "purchase" but there's the further complication that there are limits to how binding contractual agreements are!

For instance in the UK the courts do not treat prenuptial agreements as binding and can disregard them completely in cases of divorce. And there are ongoing issues around whether End User License Aggreements (which noone ever reads) are legally binding in any real sense.
posted by mary8nne at 4:23 AM on March 27


from their terms and conditions:
Audit Rights

Apple routinely audits the purchases of customers at the Apple Store for Education to insure that that all purchase conditions have been observed. Should we discover that you have not observed all of the conditions applicable to your purchase, you authorize Apple:

If you placed your order by credit card, to charge to your credit card the difference between the amount you paid for the delivered goods and the price that Apple charged the general public for the same goods at the Apple Store, in effect on the date that you placed your order; and
If you paid by a means other than credit card, to (a) invoice you for the difference between the amount that you paid for the delivered goods and the price that Apple charged the general public for the same goods at the Apple Store, payable in fifteen days from the date of the invoice, and (b), should you fail to pay the invoice when due, institute legal action against you in a court of competent jurisdiction, with the prevailing party entitled to attorneys' fees.
Should Apple not offer to the general public the specific products that you purchased at the Apple Store for Education, your credit card will be charged or you will be invoiced the difference between the amount you paid for the delivered goods and the price that Apple charged the general public for the closest equivalent goods at the Apple Store, in effect on the date that you placed your order.
That's from the US site.

I can't find the terms and conditions on the UK site.
posted by empath at 4:26 AM on March 27 [2 favorites]


Yeah I"m not sure what you agree to when you press "purchase" but there's the further complication that there are limits to how binding contractual agreements are!

Absolutely. But when you get to that level, you're getting to the involvement of lawyers and things being more complicated than can really be answered here. Contract law is a huge and varied thing no matter what country you're in, but the general principle is that you can contract for anything you can legally perform--anything else is an exception to that rule, but there are indeed a lot of exceptions. Still, absent evidence to the contrary, if a large corporation with very expensive attorneys is under the impression that the contracts are valid, they probably are at least mostly so. Not that the legal teams of large corporations are always right or anything, but at the very least one assumes they've vetted the process and if it were a straightforward case of being an invalid form of contract, then they would probably not be doing it.
posted by Sequence at 4:31 AM on March 27 [1 favorite]


Is a customer legally required to represent themselves honestly to a retailer?

In the UK, dishonestly making a false representation that you intend to make financial gain from is fraud. See the Fraud Act 2006 s 1–2. There's not an exception where it's OK to lie about being a student, or lie about reselling the goods to someone who's not eligible to buy at a lower price.

Can I sue someone if I sell them something cheaply because they say, tell me their mother is sick, but then it turns out their mother is not sick?

It's pretty common for people to be prosecuted for fraud when they make financial gains by claiming illnesses that don't exist.
posted by grouse at 5:07 AM on March 27 [1 favorite]


Like grouse above says it could be considered fraud. I think grouse might be talking about criminal prosecution, but it is also a civil wrong (just going off the wikipedia article, TINLA). Civil wrong = the wronged party (ie Apple) can sue you to recover what they lost, which in this case is the difference between full price and the student price.

Fraud is different from breach of contract. In this case the fraud comes before the contract - based on the fraud, Apple agrees to enter into a contract with you. That contract is to sell you the computer at a lower price than they would have if they knew you were going to immediately resell it. It might also be a breach of contract - eg it there was also something in the T&Cs that you aren't allowed to resell to a non-student or something. Don't ask me if they have anything like that, or if that kind of condition is enforceable though. My point is that the lying part is more likely to be fraud than breach of contract.

Whether they would bother to sue, and whether they would win is a different question. I daresay that the amount "lost" would be too small to worry Apple, and I also suspect that fraud would be really hard to prove. Unless you go around boasting on the internet about how you ripped off Apple...
posted by pianissimo at 5:44 AM on March 27


If you actually try it out on the UK mac website, it prompts you to specifically identify which university you are affiliated with (and, incidentally, it's not just for students, it's for teachers and lecturers and other employees of higher ed. institutes too). So you would definitely be misrepresenting yourself for financial gain by clicking through as you'd be specifically pretending you were affiliated with an institution which, presumably, you are not. There could be a legal case there.
posted by AFII at 5:47 AM on March 27


Technically they are not charging you more, they are giving a discount, so there is no price discrimination. A while back, and even today there was an uproar about companies that charged extra for using a credit card. They quickly changed to offering a cash discount and that was deemed legal.
posted by Gungho at 6:39 AM on March 27


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