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To: Johnny Canuck who wrote (36381)	3/7/2002 10:42:19 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69857

Palm, FTC reach deal on marketing claims Handheld capabilities: Advertising must clearly disclose any additional charges Reuters, with files from wire services WASHINGTON - The U.S. Federal Trade Commission said yesterday it had reached a settlement with Palm Inc., the world's biggest maker of handheld computers, over charges the company misled consumers about the wireless capabilities of its handheld PCs. Under the terms of the settlement, the FTC said, the handheld computer company would be required to clearly disclose when consumers have to buy additional equipment -- such as a modem -- to obtain advertised services such as access to e-mail or the Internet. In its complaint, the FTC said Palm claimed that its handheld devices could access the Internet and run Microsoft Word and Excel programs, when in fact most models required separate modems or software to perform such functions. Palm also failed to disclose that its wireless modem, which costs about US$300, wasn't compatible with certain mobile telephones, the FTC said. In addition, the company did not disclose that users needed to subscribe to its proprietary Internet service at additional cost for wireless access, the commission said. Palm will be required to clearly explain that additional products are needed to perform such functions in the future and explain that its wireless Internet service does not cover the entire United States. The company will be liable for penalties of up to US$11,000 per count if it violates the agreement. The FTC voted 5-0 to accept the settlement, which is open to public comment until April 5. The commission then will decide whether to make the consent agreement final. Officials at Palm were not immediately available for comment. Palm becomes the latest handheld PC maker to settle false advertising charges brought by the FTC. Microsoft Corp. and Hewlett-Packard Co. settled allegations last year that they misled consumers by failing to disclose prominently that expensive modems were needed to operate their Jornada Pocket PCs online.