Gateway, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF GATEWAY, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-4015; File No. 9923276 Complaint, June 22, 2001--Decision, June 22, 2001 This consent order addresses advertising by Respondent Gateway, Inc. for its Internet access service, “Gateway.net.” The order, among other things, prohibits the respondent from misrepresenting the price or cost of any “Internet access service” -- defined as “any service that enables a consumer to access the Internet or any other electronic network” -- or of any “toll-free” telephone number. The order also prohibits the respondent from making representations regarding the price or cost of any “1-800" or “toll-free” telephone number provided to the consumer by Gateway unless it clearly and conspicuously discloses the dollar amounts of any hourly surcharges and any other fees it charges for the use of such numbers. In addition, the order requires the respondent to clearly and prominently disclose that consumers may have to pay long distance telephone charges, hourly surcharges, or other costs in excess of local telephone service charges to access any Internet access service. The order also requires the respondent to maintain customer support to answer consumer inquiries regarding any Internet access service -- including but not limited to an adequately staffed toll-free number where consumers can determine whether they have a local access number for such service -- and to refund all charges for “toll free” numbers paid by local access plan Gateway.net customers who registered for the plan between January 19, and April 1, 1999, and who paid such fees until August 15, 1999.

Participants For the Commission: Linda K. Badger, Matthew D. Gold, Erika Wodinsky, Jeffrey Klurfeld, and Louis Silversin. For the Respondent: C. Teigue Thomas, and Ronald E. Naves, Jr., Gateway Inc., and Christine A. Varney and Lynda Marshall, Hogan & Hartson L.L.P.

VOLUME 131 Complaint COMPLAINT The Federal Trade Commission, having reason to believe that Gateway, Inc., a corporation (“respondent”), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Gateway, Inc. is a Delaware corporation with its principal office or place of business at 610 Gateway Drive, North Sioux City, South Dakota 57049. 2. Respondent has manufactured, advertised, labeled, offered for sale, sold, and distributed products and services to the public, including personal computers, computer peripherals, software, and Internet services.

3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act. 4. Respondent has disseminated or has caused to be disseminated advertisements for certain of its personal computers, including but not necessarily limited to the attached Exhibits A through F. These advertisements contain the following statements and depictions:

a. [MAGAZINE ADVERTISEMENT] “The Gateway Essential Line:

powerful PCs at practical prices.

Okay, maybe you don’t need an astrophysics supercomputer. But you still want a fast processor and ample memory and drive space. Look no further than Gateway Essential PCs. With video, sound and Intel processors - and affordable prices - they’re compromise-free VOLUME 131 Complaint PCs. Each one includes a year on the Internet.’ Pick a model, and we’ll customize it the way you want. Gateway Essential 400c 1-Year gateway.net Internet Access’ [Footnotel appears as follows four pages later at the bottom of the page, in the eighth line of eleven lines of fine print disclosures, in approximately 4-point type:] 1. No monthly fee 1" year. Rural access $3.95/hour. Local access $1.50/hour over 150 hours per month. 12 months from delivery. Must register w/30 days of delivery.” (Exhibit A) b. [NEWSPAPER ADVERTISEMENT] “GET A GATEWAY ESSENTIAL PC WITH INTERNET INCLUDED. ' LESS THAN A DOLLAR A DAY.

An unbelievable computer that actually comes with a year of Internet access... .' GATEWAY ESSENTIAL 400c * 1-YEAR GATEWAY.NET INTERNET ACCESS ($240 VALUE) VOLUME 131 Complaint [Footnotel appears as follows at the bottom of the page, in the second line of five lines of fine print disclosures, in approximately 2-point type:] 1. No monthly fee for first year. Rural access $3.95/hour. Local access $1.50/hour over 150 hours. 12 months runs from delivery. Must register w/30 days of delivery. $240 based on standard month to month fee.” (Exhibit B) . [NEWSPAPER ADVERTISEMENT] “Print it. Free.

With a free color printer from Gateway, you could print everything from pie recipes to pie charts. . . . Right now, we’ll also include one full year of Internet access' absolutely free.

[Footnote 1 appears as follows in a black box with white writing at the bottom of the page, in approximately 4point type:] No monthly fee 1st year. Rural access $3.95/hour. Local access $1.50/hour over 150 hours per month. 12 months runs from delivery. Must register w/30 days of delivery.” (Exhibit C) . [TELEVISION ADVERTISEMENT] “[Depiction: Two computer boxes on a table in a darkened room. A spotlight scans one of the boxes, revealing a question mark on the label. The other box bears the Gateway name and logo. ] VO: When you buy a bargain basement PC, what you’re really buying is a mystery box.

[Depiction: A Gateway box] VO: Will there be a monitor? Probably not.* Lots of software? Ha! A year on the Internet? VOLUME 131 Complaint [*Super appears in white at the bottom of the screen]: No monthly fee 1“ year. Rural access $3.95/hour. Local access $1.50/hour over 150 hours. 12 months runs from delivery. Must register within 30 days of delivery. VO: Twenty-four hour tech support? Dream on. [Super ends. Depiction: close up of the Gateway box alone] VO: With a Gateway Essential PC, you know exactly what you’re getting:

[Depiction of a hand lifting box up to reveal the complete PC system underneath] VO: ...a monitor, great software, award-winning tech support, [Super appears at top of screen in black letters framed in a box:] as low as $28/mo. for 48 mo. or $999 VO: ...and Internet access for $28 a month or a dollar a day. No mystery there! [Depiction: Gateway logo, Super in bold black print:] Connect with us /1-800- Gateway/www.gateway.com/Gateway is our trademark. VO: Call 1-800 Gateway for a new Gateway Essential PC with an Intel celeron processor.” (Exhibit D) [MAGAZINE ADVERTISEMENT] “Let’s talk about the ultimate traveling companion. VOLUME 131 Complaint All these add-ons are available when you purchase a Gateway system.

gateway.net $14.95/mo.* [Footnote 4 appears as follows at the bottom of the page, in the eleventh line of eleven lines of fine print disclosures, in approximately 4-point type:] 4. gateway.net pricing based on 6-month commitment. $15 fee for early cancellation.” (Exhibit E) f. [ONLINE REGISTRATION SCREEN] “Phone Book Toll Free (888) 709-4076”

(Exhibit F) 5. Through the means described in Paragraph 4, including but not necessarily limited to Exhibits A through D, respondent has represented, expressly or by implication, that with the purchase of the advertised computer models, one year of Gateway.net Internet access would be free or included at no extra charge. 6. In truth and in fact, with the purchase of the advertised computer models, for many consumers one year of Gateway.net Internet access was not free or included at no extra charge because these customers incurred long distance charges to access Gateway.net or were charged $3.95 per hour to use respondent’s 1-888 telephone number to access the service. Therefore, the representation set forth in Paragraph 5 was, and is, false or misleading.

7.

10.

11.

VOLUME 131 Complaint Through the means described in Paragraph 4, including but not necessarily limited to Exhibit E, respondent has represented, expressly or by implication, that with the purchase of the advertised computer models, the total cost to consumers for Gateway.net Internet access would be a flat fee, such as $14.95 per month.

. In truth and in fact, with the purchase of the advertised computer models, the total cost to many consumers for Gateway.net Internet access was not a flat fee, such as $14.95 per month because these customers incurred long distance charges to access Gateway.net or were charged $3.95 per hour to use respondent’s 1-888 telephone number to access the service. Therefore, the representation set forth in Paragraph 7 was, and is, false or misleading.

. Through the means described in Paragraph 4, including but not necessarily limited to Exhibit F, respondent has represented, expressly or by implication, that the use of respondent’s “toll free” 1-888 number to connect to the Internet was free to consumers.

In truth and in fact, the use of respondent’s “toll free” 1-888 telephone number to connect to Gateway.net was not free to consumers. Consumers were charged $3.95 per hour for the use of this number. Therefore, the representation set forth in Paragraph 9 was, and is, false or misleading. In its advertising and sale of certain computer models, respondent has represented, expressly or by implication, that the cost of using the Internet for one year would be zero, or that Internet service could be purchased for a flat monthly fee, such as $14.95 a month. Respondent has failed to disclose adequately before purchase that many consumers would incur significant, additional costs such as long distance telephone charges or charges for the use of “toll free” 1-888 numbers to connect to the Internet. This fact would be material to consumers in their purchase or use of VOLUME 131 Complaint the service or product. The failure to adequately disclose this fact, in light of the representation made, was, and is, a deceptive practice.

12. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Sections 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this twentysecond day of June, 2001, has issued this complaint against respondent.

source ACNielsen Tech*Watch US5 1 4 1 1 5 714 3179 78 14 92.315460 households5 1 4 1 1 6 799 3182 49 14 33.413727 owning5 1 4 1 1 7 856 3182 6 11 93.438240 a5 1 4 1 1 8 868 3178 62 19 93.438240 Gateway5 1 4 1 1 9 936 3179 17 15 94.513336 PC5 1 4 1 1 10 960 3181 27 13 96.108490 who5 1 4 1 1 11 994 3180 73 17 96.628853 purchased5 1 4 1 1 12 1074 3180 54 18 69.304688 January5 1 4 1 1 13 1138 3174 5 28 6.893150 -5 1 4 1 1 14 1146 3180 43 14 38.357716 Mach5 1 4 1 1 15 1199 3179 32 15 91.549088 1999.5 1 4 1 1 16 1243 3178 16 15 92.364479 675 1 4 1 1 17 1266 3179 22 13 86.608330 4%5 1 4 1 1 18 1296 3179 73 17 95.845703 purchased5 1 4 1 1 19 1376 3180 54 14 36.200695 another5 1 4 1 1 20 1437 3178 61 18 93.304314 Gateway5 1 4 1 1 21 1505 3180 48 16 73.862869 systen.4 1 4 1 2 0 453 3198 426 16 -1 5 1 4 1 2 1 453 3199 45 14 84.853363 Sources 1 4 1 2 2 509 3199 72 15 0.000000 ACHelsen5 1 4 1 2 3 589 3199 35 14 46.796349 lech?5 1 4 1 2 4 631 3200 40 13 69.500565 Watch5 1 4 1 2 5 683 3199 54 15 60.269981 Oclober5 1 4 1 2 6 746 3198 33 15 54.831882 199%5 1 4 1 2 7 796 3199 42 15 54.831882 March5 1 4 1 2 8 847 3199 32 15 64.817917 19942 1 5 0 0 0 1815 1622 521 18 -1 3 1 5 1 0 0 1815 1622 521 18 -1 4 1 5 1 1 0 1815 1622 521 18 -1 5 1 5 1 1 1 1815 1622 521 18 95.000000 2 1 6 0 0 0 1831 1651 351 36 -1 3 1 6 1 0 0 1831 1651 351 36 -1 4 1 6 1 1 0 1831 1651 351 36 -1 5 1 6 1 1 1 1831 1652 26 29 96.730026 of5 1 6 1 1 2 1871 1651 121 36 96.278847 Gateway5 1 6 1 1 3 2005 1651 97 36 96.385254 buyers5 1 6 1 1 4 2116 1651 66 29 96.968666 have2 1 7 0 0 0 1817 1692 397 16 -1 3 1 7 1 0 0 1817 1692 397 16 -1 4 1 7 1 1 0 1817 1692 397 16 -1 5 1 7 1 1 1 1817 1692 397 16 95.000000 2 1 8 0 0 0 1710 1718 497 39 -1 3 1 8 1 0 0 1710 1718 497 39 -1 4 1 8 1 1 0 1710 1718 497 39 -1 5 1 8 1 1 1 1710 1722 155 35 96.813652 purchased5 1 8 1 1 2 1879 1728 14 22 96.945107 a5 1 8 1 1 3 1907 1718 134 39 68.894653 Gateway PC before:

Thanks, Gateway owners, for making us #1 in customer loyalty.** EXHIBIT A Gateway Connect with us.

EXHIBIT A-1 + Gateway Essential 466c The Gateway Essential Line:

powerful PCs at practical prices.

Qkay, maybe you don't need an astrophysics supercomputer. But you still want a fast processor and ample memory and drive space. Look no further than Gateway Essential PCs. With video, sound and Intel® processors—and affordable prices—they’re compromise-free PCs. Each one includes a year on the Internet. Pick a model, and we'll customize it the way you want. Gateway Essential 466c Gateway Essential 450SE Gateway Essential 400c Intel® Celeron™ Processor 400MHz with 128K Cache Intel Celeron Processor 466MHz with 128K Cache 32MB SDRAM 64MB SDRAM EV500 15" Monitor (13.9" viewable) EV700 17" Monitor (15.9" viewable) 8MB AGP Graphics 8MB AGP Graphics , 6.8GB Ultra ATA Hard Drive 13.6GB Ultra ATA Hard Drive 40X Max? Variable CD-ROM 40X May’ Variable CD-ROM SoundBlaster® AudioPC|™ 64D SoundBlaster AudioPCl 64D GCS-200 Speakers by Cambridge® SoundWorks GCS-200 Speakers by Cambridge SoundWorks 56K? internet/Fax Modem 56K? Internet/Fax Modem Micro-Tower Case Micro-Tower Case Microsoft® Windows® 98 Second Edition Microsoft Windows 98 Second Edition Microsoft Works Suite 9¢ 1-Year Parts, Labor & Limited Warranty On-site Service”

1-Year gateway.net™ Internet Access’ $999 All Gateway Essential PCs include:

3.5" Diskette Drive Keyboard, Mouse Year 2000 Compliance* or as low as $28/mo.

for 48 mos. through our § Your:)Ware™ program” 4 Gateway Microsoft Works Suite 99 1-Year Parts, Labor & Limited Warranty On-site Service* 1-Year gateway.net Internet Access’ or as low as $37/mo $] y] 99 for 48 mos. through our Your:)Ware program ~ Upgrade any system:

Add a Gravis™ GamePad Pro USB- $1¢ Upgrade from EV500 15" to EV700 17"

Monitor (15.9" viewable) ~ $115 Upgrade from EV700 17" to EV910 19° Monitor (18" viewable) - $130 Add a Hewlett®-Packard DeskJet® 812C Color Printer-$199 Add a 100MB lomega® ZIP BUILT-IN™ Internal Drive w/1 ZIP Disk - $79 Intel Pentium® Hl Processor 450MHz with 512K Cache 64MB SDRAM EV700 17" Monitor (15.9" viewable) 16MB NVIDIA™ RIVA TNT™ AGP Graphics 13.6GB Ultra ATA Hard Drive 40X Max? Variable CD-ROM SoundBlaster AudioPCl 64D GCS-200 Speakers by Cambridge SoundWorks 56K? Internet/Fax Modem Mid-Tower Case :

Canon Color Printer Microsoft Windows 98 Second Edition Microsoft Works Suite 99 3-Year Parts & Labor, 1-Year Limited Warranty On-site Service”

1-Year gateway.net Internet Access’ oras low as $42/mo.

$149 9g for 48 mos. through our Your:)Ware program Upgrade to a DVD-ROM Drive - $80 Upgrade to a Boston Acoustics® 3-Piece Speaker System — $30 celeron”

eROCESSOR Get in touch with us for more information, and for the most current pricing. Cr COMEIN, 1 29 BAG 59871 | wwweateway.cam! | Gateway Country” | | | EXHIBIT A-2 W Gateway’s Solutions :

and Your:)Ware’ Program:

Choose any Gateway Essential or Gateway Performance PC, and you can customize it with the following solution packages. We test out software titles and accessories to find the best products, and package them for better value. It’s a great way to save on a computer for back-to-school. KidBuilder '89 Preschool- Kindergarten KidBuilder '99 Grades 1-4 KidBuilder 99 Grades 5-8 CTW/Sesame Street®: Toddlers Deluxe Reader Rabbit's 1st Grade The Oregon Trail® 3rd Edition — Reader Rabbit's* Kindergarten Super Solvers® Mission T.H.I.N.K.™ Pioneer Adventures Dr. Seuss Preschool The Cluefinders™: 4th Grade Adventures The Princeton Review Algebra 1 Schoolhouse Rock® Thinking Games Reader Rabbit's Math Ages 6-9 Compton's* 3D World Atlas Deluxe™ CTW/Sesame Street: Arthur's™ Computer Adveinture BodyWorks® 6.0 Elmo's Preschool Deluxe Schoolhouse Rock: Grammar Rock® Super Solvers Reading Ages 9-12 Dr. Seuss: The Cat in the Hat Madeline™ Thinking Games Deluxe Where in the World is Carmen Sandiego?® Reader Rabbit's Reading Deluxe Edition $ a :99 Family Entertainment Package i TA Learning 2000” Software Rand McNally® TripMaker™ Deluxe iw ; This massive library of multimedia 1999 Edition SketchBoard™ Drawing Tablet educational software incorporates Rand McNally StreetFinder™ Deluxe Hasbro Interactive™ Classic Games interactive video, audio, text and ‘ Picti © Boggle® Scrabble® Sorry!® ; ; Rand McNally wire-bound Road Atlas ictionary,” Boggle, scrabble, sorry., illustrations to teach kids core learning & Travel Culde Ultimate Yahtzee® Clue®: Murder at Mindscape's® World Atlas & Almanac Boddy Mansion, The Game of Life skills: reading, writing, math and algebra. It is the ultimate resource for students from ages 8-18. 1-year prepaid basic membership to AAAT (tor Gateway clients who are already AAA members, the monies would be applied system purchase.

$99 (599 retail value) to renewal) ($119 after $30 SketchBoard $1 4 mail-in rebate) for a limited time with ($199 with Global Deluxe Reference Bundle $1 29 Positioning Satellite) PrintMaster® Deluxe 7.0 1999 Grolier Multimedia Encyclopedia® What is the Your:)Ware™ program and why is it for you? Your:)Ware is our way; rare staker® Deluxe 1999 Edit of helping you personalize your order in every way. First, choose a model from any of our lines of Rane McNally steetFinder® uxe Mon PCs. Then add on any peripherals, accessories or solution packages (like the ones above) to get Deiuxe 1999 Edition exactly the right computer. Then we'll help you decide which service option and financing plan Mindscape's® World Atlas & Almanac are best for you. And finally, you can trade in your Gateway PC toward the purchase of a new Home Medical Advisor one after two years.’ The Your:)Ware program is how we get your computer to fit you perfectly. $ | Check out Www.gateway.com” and choose from over 30,000 hardware accessories and software titles. gp Ad Code # 0002h¢ te “Call 1-B00-GATEWAY ar write to Gateway Terms & Conditions, PO. Box 1951, North Sioux City, SD 57049-1951 for a free copy of our limited warranties and on-site service agreements. On-site customers: If Gateway determines on-site service is necessary, it will be provided for product in the continental United States, Alaska, Hawaii, Puerto Rico and Canada (excluding mice, keyboards, portable docking stations, extemal peripherals and monitors). You may be asked to take your PC to a Gateway location for warranty service. See agreements for specific terms and limitations. **Loan financi ilable on approved credit through independent lender. Payments based on 48-month term and an Annual Percentage Rate as low as 14.9%. Your APR may be higher. 2% access check tee ($2min/ $15max.); not applicable to G purch Gateway purchases will quality for the Your) Ware program by: 1} financing through a Gateway authorized lender. 2} purchasing an addibonal software or selution bundle: or 3) purchasing support package upgrades. Trade-in available between the first day of the 24th month and the last day of the 49th month after delivery of Your) Ware product. Gateway will give yue the average wholesale value for the preduct in goed condition using the then current Onon Blue Book or simiiar commercially reasonable industry standard as determined in Gateway's sole discretion. Other terms and condrtions apply. Call for details. Otter expres 9/20/99. tAAA membership subject to rules and membership approval of lacal AAA club en yous area. tf your membership is not approved by your local ciub, the national AAA office will issue you a rotund in {he amount af a one year hastc membership for that focal club oo = — m = > < m wn”

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m = “4 = ba =] o ”

EXHIBIT A-3 __ Gateway Performance 500 The Gateway Performance Line:

serious computers with serious components. Looking for a PC that’s not fooling around the Gateway Performance PCs—our line of top-tier mac multimedia prowess, they're dialed up to power-user levels. Gateway Performance 500; Gateway Performance $50 Intel® Pentium® lil Processor 500MHz with 512K Cache 128MB SDRAM EV700 .28 Screen Pitch 17" Monitor (15.9" viewable) 16MB 3Dfx® Voodoo™3 30006 AGP Graphics 13.6GB Ultra ATA 66 7200 RPM Hard Drive 6X DVD-ROM Drive & MPEG2 Decoder SoundBlaster® AudioPCl™ 64D Boston Acoustics® BA735™ Digital Speakers w/Subwoofer 3Com® U.S. Robotics® 56K’ PCI Voice WinModem* 8-Bay Mid-Tower Case Microsoft® Windows® 98 Second Edition circle MS® Works Suite 99 Software or as low as$4B/mo for 48 mos. through our Your:}¥are * program”

All Gateway Performance PCs include:

3.5" Diskette Drive Multifunction Keyboard, Mouse Year 2000 Compliance‘ acneneeen een 3-Year Parts-@tabor Limited Warranty / 1-Year On-site Warranty Service*”* = Intel Pentium Hl Processor SSOMHz with 512K Cache .

128MB SDRAM VX900 .26 Screen Pitch 19" Monitor (18" viewable} 32MB NVIDIA™ RIVA TNT2® AGP Graphics 13.6GB Ultra ATA 66 7200 RPM Hard Drive 6X DVD-ROM Drive & MPEG2 Decoder SoundBlaster AudioPC! 64D Boston Acoustics BA735 Digital Speakers w/ Subwaoter 3Com U.S. Robotics 56K PC! Voice WinModem 8-Bay Mid-Tower Case Microsoft Windows 98 Second Edition MS Works Suite 99 Software or as tov: as 62/10 Your:}Ware program”

32 1 9g 9 for 48 mos. through our Upgrade any system:

Add a 100MB lomega® ZIP BUILT-IN”

Internal Drive w/1 ZIP Disk $79 eee ee Upgrade from EV700 17" to EV910 19" Monitor (18" viewable) - $130 Upgrade from EV700 17° to VX900 19" Monitor (18" viewable) - $230 Upgrade from 16MB 3Dfx Voodoo 3 30006 to 32MB NVIDIA RIVA TNTZ AGP Graphics - $70 Gateway Performance 600 Intel Pentium II Processor 600MHz with 512K Cache d? One with blazing processor speeds that’s tricked out with the highest-end components? Bring on hines. With the latest processor technology, lots of room to expand and intense Gateway Performance 600XL Intel Pentium 111 Processor 600MHz with 512K Cache 128MB SDRAM aoe eee VX900 .26 Screen Pitch 19" Monitor (18" viewable) 128MB SDRAM aoe eS VX900 .26 Screen Pitch 19" Monitor (18" viewable;

32MB NVIDIA RIVA TNT2 AGP Graphics 32MB NVIDIA RIVA TNT2 ‘Ultra AGP Graphics 20.5GB Ultra ATA 66 7200 RPM Hard Drive 6X DVD-ROM Drive & MPEG2 Decoder SoundBlaster Live!Value with Digital Audio Output ee eee Boston Acoustics BA735 Digital Speakers w/Subwooter 3Com U.S. Robotics 56K’ PCI Voice WinModem:

wee ea intel® AnyPoint™ Home Networking 8-Bay Mid-Tower Case Microsoft Windows 98 Second Edition MS Works Suite 99 Software or as tow as $67 /mo 2 3 9 9 for 48 mos through Gus Your ¥iare prograth Upgrade to a 10-Bay Tower Case - $50 Upgrade to MS Office 2000 Small Business Software — $19 Add 1-Year gateway.net™ Internet Access'- $129 Ask us for details about software training offered at our Gateway Country® stores. TV/FM Tuner Card 27.3GB Ultra ATA 66 7200 RPM Hard Drive 6X DVD-ROM Drive & MPEG2 Decode:

Philips® CD-RW (CD-Rewritable) Dri.

with Media SoundBlaster Live!Value with Digital Audio Output Boston Acoustics Digital MediaTheater™ Dolby® Digital Speakers w/Subwooter 3Com U.S. Robotics 56K’ PCI Voice WinModem intel AnyPoint Home Networking 10-Bay Tower Case Microsoft Windows 98 Second Edition MS Office 2000 Small Business Software or as Iov. as $84/mo $2 9 9 9 for 48 mos. through our Your.) Ware program”

pentiume/, EXHIBIT A-4 Gateway’s Solutions and Your:)Ware’ Program:

Choose any Gateway Essential or Gateway Performance PC, and you can customize it with the following solution packages. We test out software titles and accessories to find the best products, and package them for better value. It’s a great way to save on a computer for back-to-school. KidBuilder '99 Preschoo!- - Kindergarten KidBuilder 99 Grades 1-4 KidBuilder '99 Grades 5-8 o = ~~ nm = = < om wo”

wn m = “4 = wo co on CTW/Sesame Street®: Toddlers Deluxe Reader Rabbit's Ist Grade The Oregon Trail* 3rd Edition — Reader Rabbit’s® Kindergarten Super Sotvers® Mission T.H.ILN.K.™ Pioneer Adventures Dr. Seuss Preschool The ClueFinders™: 4th Grade Adventures The Princeton Review Algebra 1 Schoolhouse Rock® Thinking Games Reader Rabbit’s Math Ages 6-9 Compton's” 3D World Atlas Deluxe” CTW/Sesame Street: Arthur's Computer Adventure BodyWorks* 6.0 Elmo's Preschool Deluxe Schoolhouse Rock: Grammar Rock® Super Solvers Reading Ages 9-12 Where in the World is Carmen Sandiego?* Deluxe Edition $99 Dr. Seuss: The Cat in the Hat Reader Rabbit’s Reading $99 : Ti Learning 2000™ Software Rand McNally® TripMaker™ Deluxe 1999 Edition Madeline™ Thinking Games Deluxe Family Entertainment Package SketchBoard™ Drawing Tablet Hasbro Interactive” Classic Games | Pictionary Boggle® Scrabble* Sorry!* | Ultimate Yahtzee® Clue®: Murder at ' Boddy Mansion, The Game of Life® j ; ($119 after $30 SketchBoard $] 49 mail-in rebate) This massive library of multimedia educational! software incorporates Rand McNally StreetFinder™ Deluxe interactive video, audio, text and illustrations to teach kids core learning = Rane Mechel ware-Doune Road Atlas skilis: reading, writing. math and algebra. : It is the ulttmate resource for students from ages 8-1& for a limited time with 4 system purchase-** 99 x 599 retail value) Mindscape’s® Wortd Atlas & Almanac 1-year prepaid basic membership to AAA (for Gateway clients who are already AAA members, the monies would be applied to renewal! $] 29 ($199 with Global Positioning Satellite) What is the Your:)Ware™ program and why is it for you? Your:)Ware is our way of helping you personalize your order in every way. First, choose a model from any of our lines of PCs. Then add on any peripherals. accessories or solution packages (like the ones above) to get exactly the right computer. Then we'll help you decide which service option and financing plan are best for you. And finaliy, you can trade in your Gateway PC toward the purchase of a new one after two years. The Your:)Ware program is how we get your computer to fit you pertectiy. $99 Deluxe Reference Bundle PrintMaster® Deluxe 7.0 1999 Grolier Multimedia Encyclopedia* Deluxe Edition. | Rand McNally TripMaker* Deluxe 1999 Edition} Rand McNally StreetFinder* Deluxe 1999 Edition Mindscape's™ World Atlas & Almanac Home Medical Advisor het Code © Ut “Call 1-B00-GATEWAY-sewrite to Gateway Terms & Conditions. PO. Box 1951, North Sioux City, SG 57049-1951 for a free copy of our limited warranties and on-site service agreements. On-site customers: If Gateway determines on-site service 1S necessary, it will be provided tor product in the continental United States, Alaska, Hawail, Puerto Rico and Canada (excluding mice, keyboards. portable docking stations, external peripherals and monitors). You qray-be asked to take your PC to a Gateway location tor warranty service. See agreements for specific terms and | **Loan fi 9 available on approved credit through independent lender. Payments based on 48-month term and an Annual Percentage Rate as low as 14.9%. Your APR may be higher. 2% access check fee (S2min/ $15max.,}; not applicable to Gateway purchases Gateway purchases will quality for the Your! Water program by: 1) financing through a Gateway authorized lender: 2} purchasing an adthtional software or solutron bundle: ot 3) purchasing support package upgrades. Trade-in avaitable between the frst day of the 24th manth anc the last day of the 49th month after delivery of Your:}Ware product. Gateway will give you the averaye wholesale value tor the product in good condition using the then current Onon Blue Book or similar commercially reasonable sndusty standard as determmed in Gateway s sole disctenon, Other terms and conditions apply. Call for details. “**Otter expires $/20/99, TAAA membership subject lo rules and membership approval of local AAA club in your area. I! your membership 1s nol agproved by your local club. the national AAA office will issue you ¢ relund in the amount of a one yeat basic membership for that local club EXHIBIT A-5 POC REO Gateway Portable PCs:

like a desktop PC, when the desk is your lap. Solo® 2500SE 12.1" SVGA TFT Color Display Intel® Celeron™ Processor 333MHz 32MB SDRAM (expandable to 288MB) 2MB Graphics Accelerator with 64K Colors Integrated 10X min/24X max CD-ROM Drive & 3.5" Disk Drive 4GB Ultra ATA Hard Drive NiMH Battery & AC Pack NTSC/PAL Video Output E72 Pad® Pointing Device Starting Weight: 7.1 Ibs* Microsoft Works Suite 99 Software }-Year Parts & Labor Limited Warranty** eras ton as $421 ‘ Sor Your Ware ‘ prageaar? All Solo Portable PCs include:

USB Port, CardBus Zoomed Video Support EZ S.MAR.T.” Hard Drive Monitoring Protection Service Integrated 16-Bit Sound & Stereo Speakers 1.800.846.5257 Solo 2500LS 13.3" SVGA TFT Color Display Intel® Pentium® {| Processor 333MHz 32MB SDRAM (expandable to 288MB) 2MB Graphics Accelerator with 64K Colors Integrated DVD-It Drive & 3.5" Disk Drive 4GB Ultra ATA Hard Drive Lithium lon Battery & AC Pack NTSC/PAL Video Output V.90 56K? Modem Casual Case EZ Pad Pointing Device Starting Weight: 7.1 Ibs.’ MS: Office 2000 Small Business Software ]-Year Parts & Labor Limited Warranty** or as lov 35 $64: ms $2 2 9 9 for 48 mes. through our Your }Ware program Microsoft Windows 98 Second Edition LapLink® V.7.5 Protection for Windows 98 McAtee™ VirusScan Year 2000 Compliance‘ wwweateway.com) | Gateway Country”

Solo 9150SE 15.1" XGA TFT Color Display intel Pentium tl Processor 333MHz 64MB SDRAM (expandable to 384MB) 2X AGP 3-D ATI? RAGE™ LT PRO :

with 8MB SGRAM Removable Combo DVD-II Drive & 120MB SuperDisk™ Drive - 6GB Ultra ATA Hard Drive Lithium lon Battery & AC Pack NTSC/PAL Video Input & Output Integrated V.90 56K* Modem Deluxe Leather Case EZ Pad Pointing Device Starting Weight: 8.6 tbs MS Works Suite 99 Software 1-Year Parts. Labor Limited Warranty & On-site Service *”

ot as tow as $14 ima 32 64 9 tar 48 mos. through cur Your? fe program”

Upgrade any system:

Add a Kensington® Masterlock Security Cable - $39 Add an Auto/Airline Adapter - $99 7 I 8 Toll Free from Mexico 95-888-885-0074 = Toll Free ‘om Puerto Rico 800-846-3613 od | Toll Free from Canada 800-846 3606 © 1999 Gateway. Inc. All rights reserved. Gateway. gateway.net Solo. the Gateway stylize Corporation. All other brands and product names are trademarks or registered \rademarks 0 lender, Payments based on 48-month temy and an Annual Percentage Rate as Jow as 14.9%. Your) Ware program by: 1) financing through a GatewSr-eethorized fender: 2) purchasing an additional software or solution bundle: or ct in good condition using the then Curent Oriow Blue Book or similar commercial 51, North Sioux City, $D 57049-1951 for a tree copy continental United States, Alaska, Hawaii, Puerto Rico an reements for specific terms and limitations. 1. No monthiy te jen! upon variables. including particular modems with which you are communicating. ly completed the NSTL YMARK2000 test. These systems have also passed ected by Gateway. Complete details on Gateway’s Year 2000 support can de found al www.gateway.com product. Gateway will give you the averat ale value tor the produ! GATEWAY or write to Gateway lerms & Conditions. P.O. Box 19 service is necessary, it will be provided for product in the be asked to take your PC to a Gateway location for warranty service. See ag register w/ 30 days of delivery. 2. 40X max./13X min. 3. Maximum data uansler rate depend are qualified to carry the “NSTL Hardware Tested Year 7Q00 Compliant” iogo because they have successful sets, sesets, or calculates dates. These sssues are not related to the hardware and operating system. and cannot be ct ~ Gateway Solo 9150Xt Solo $150XL 15.1" XGA TFT Color Display Intel Pentium It Processor 400MHz 256MB SDRAM (expandable to 384MB) 2X AGP 3-D ATI RAGE LT PRO with 8MB SGRAM eee ee Removable Combo DVD-I! Drive & 120MB SuperDisk Drive 14GB Ultra ATA Hard Drive Two Lithium lon Batteries & AC Pack NTSC/PAL Video Input & Output Integrated V.90 56K’ Modem Deluxe Leather Case EZ Pad Pointing Device Port Replicator & External Battery Charger Starting Weight: 8.6 Ibs.

MS Office 2000 Small Business - Software 1-Year Parts, Labor Limited Warranty & On-site Service*™ otas tow as $128 me 34 5 9 9 for 48 mos. through our Your Ware program”

Gateway Connect with us.

logo. Gateway Country, EZ Pad and Your:) Ware are trademarks ther respective companies. Many products are engineered to 6 Your APR may be higher 3) purchasing support package upotades. Trade-in available between t iy reasonable industry standard as determined in Gateway S$ sol of our limited warranties and on-site service agreements nse customers: | d Canada (excluding mice. keyboards, portable e Ist year, Rural access $3.95/hous. Local or registered wacemarks ol Gateway. Inc The intel Inside Logo, Int ateway spectlications, which vary {rom setail versions. Loans 1 131 1 2 9 1888 2895 87 19 95.628944 financing4 1 131 1 3 0 1422 2911 1028 41 -1 5 1 131 1 3 1 1422 2935 27 17 73.598511 Ze5 1 131 1 3 2 1459 2938 65 13 96.021141 access5 1 131 1 3 3 1533 2932 55 18 95.881020 checks 1 131 1 3 4 1599 2931 27 17 93.304924 fees 1 131 1 3 5 1636 2928 156 19 33.072517 (S2min/$15max.|,5 1 131 1 3 6 1806 2929 27 14 96.330627 not5 1 131 1 3 7 1842 2922 98 25 96.965965 applicable5 1 131 1 3 8 1949 2924 16 15 96.913841 to5 1 131 1 3 9 1974 2921 81 19 96.737381 Gateway5 1 131 1 3 10 2064 2918 97 22 96.372467 purchases.5 1 131 1 3 11 2173 2916 61 18 91.526253 Gateway5 1 131 1 3 12 2242 2915 68 19 96.713684 purchases5 1 131 1 3 13 2318 2913 25 16 89.559166 will5 1 131 1 3 14 2352 2912 48 19 88.943283 qualify5 1 131 1 3 15 2409 2911 18 16 83.644455 tors 1 131 1 3 16 2437 2911 13 15 76.689034 th4 1 131 1 4 0 1780 2939 676 33 -1 5 1 131 1 4 1 1780 2957 14 15 69.696976 he5 1 131 1 4 2 1803 2958 25 14 0.000000 burst5 1 131 1 4 3 1837 2957 22 14 86.501900 dav5 1 131 1 4 4 1867 2954 12 16 73.510849 of5 1 131 1 4 5 1887 2953 19 15 87.527954 thes 1 131 1 4 6 1914 2952 31 17 61.749252 24th5 1 131 1 4 7 1953 2951 42 16 64.898087 months 1 131 1 4 8 2002 2950 23 17 96.270660 ands 1 131 1 4 9 2033 2949 20 16 89.381554 thes 1 131 1 4 10 2060 2948 25 17 75.837524 fast5 1 131 1 4 11 2092 2948 23 19 96.463058 days 1 131 1 4 12 2122 2946 12 17 86.219971 of5 1 131 1 4 13 2142 2946 20 17 96.885124 thes 1 131 1 4 14 2169 2945 31 17 66.445892 AGth5 1 131 1 4 15 2208 2944 42 17 79.257835 months 1 131 1 4 16 2257 2944 30 16 88.963181 atter5 1 131 1 4 17 2295 2945 40 13 81.588043 deiivery5 1 131 1 4 18 2357 2941 12 16 90.549484 of5 1 131 1 4 19 2376 2939 80 18 16.420631 YourWe-4 1 131 1 5 0 1876 2961 543 58 -1 5 1 131 1 5 1 1876 2987 6 11 45.255642 Je5 1 131 1 5 2 1890 2982 67 15 94.423752 discretion.5 1 131 1 5 3 1967 2978 37 18 96.373169 Others 1 131 1 5 4 2011 2981 38 14 88.040947 terms5 1 131 1 5 5 2056 2977 24 16 93.259674 ands 1 131 1 5 6 2086 2975 72 17 0.000000 condstons5 1 131 1 5 7 2165 2973 36 46 44.475880 hid5 1 131 1 5 8 2210 2972 25 18 76.303207 Calf5 1 131 1 5 9 2242 2972 17 17 72.934822 for5 1 131 1 5 10 2266 2971 44 17 0.000000 data.5 1 131 1 5 11 2323 2963 52 22 16.496307 Call 1-8 ocking stations, external peripherals an access $1.50/hous over 150 hours per month. 42 months from detivery Mu telephone ines. communications software an¢ communications protocols. 4. All Gateway Intel processor-based syste” d the Microsoft Millennium Year 2000 test suite Gateway cannot be responsible for thied party sottware that imprope’ /year 2000.5. Weight varies based on contiguratior: e| and Pentium are registered trademarks, and Celeron 1s & trademark of inte available on approved credit through independent Geteway determines on-sitt monitors). You ma:

is _ -| EXHIBIT B \ GET A GATEWAY” ESSENTIAL PC WITH INTERNET INCLUDED:

LESS THAN A DOLLAR A DAY.

An unbelievable computer that actually comes with a year of Internet access — only $28 a month?’ That's less than a dollar a day. And this | ' isn’t just any computer. It’s a loaded Gateway Essential PC with an intel? Celeron™ processor, monitor, Internet and software. Let’s face it folks, buying a computer just doesn't get any better than this. GATEWAY” ESSENTIAL 400c | dy lyayrarrpayver ry-Sebedapert ten Labonte mo — L apdenhaland mane carpet pynbeny a anonree aan Lememneteel Mee Aare ge ened Jere eR nd lemeED | emt pes (ew | LL dpyedpehenghemdontions yap teria finetinala den ee ne ee ee meine men nanavanna rasa wan pues we mempere Rms ow — Las 0 me mek mi om Mave on) ba dhasen liesiea>saahedmuand ans oi Sane SON OR Amrenp 9 wip c/a, — ‘Ang ang war i, soted ous owe mea i8 = pahad = amine 7 men —o— , v “megbu9 ez on 8 aanopepen || Eas) SEM HOD ‘pra y ‘0:

wayeAH 19 ‘pesuepuOD FaNEARH 2 ‘POR m wenn “ees oe ae VOReNs|Ooy ™MONeA, ——_PRSUEPLOD eDnENAH BD EONBARH5 1 19 1 4 8 2126 1128 17 46 0.000000 :AUOY5 1 19 1 4 9 2110 1373 44 74 0.000000 munldoy5 1 19 1 4 10 2129 1827 18 30 39.030289 is5 1 19 1 4 11 2114 1863 33 36 0.000000 UEHs5 1 19 1 4 12 2129 1906 17 28 0.000000 -O¥4 1 19 1 5 0 2088 475 36 1459 -1 5 1 19 1 5 1 2103 475 20 70 0.000000 “Buedayy5 1 19 1 5 2 2103 552 21 42 36.454636 ‘ued5 1 19 1 5 3 2103 600 19 37 27.308029 ‘nig5 1 19 1 5 4 2103 644 19 50 0.000000 ‘vend5 1 19 1 5 5 2103 700 19 45 32.311562 ORG5 1 19 1 5 6 2103 752 18 54 0.000000 :were]5 1 19 1 5 7 2103 1093 16 52 0.000000 VOVEWY5 1 19 1 5 8 2103 1152 17 22 41.096916 “45 1 19 1 5 9 2088 1371 17 71 25.469101 anny5 1 19 1 5 10 2101 1841 18 46 0.000000 boeen5 1 19 1 5 11 2101 1895 18 39 0.000000 sag)4 1 19 1 6 0 2073 520 28 1415 -1 5 1 19 1 6 1 2080 520 16 60 4.748085 WAVES 1 19 1 6 2 2080 585 17 35 40.540695 HID5 1 19 1 6 3 2080 625 21 181 0.000000 ‘auder(Gin)esssueMeU5 1 19 1 6 4 2080 1098 16 29 45.613846 £65 1 19 1 6 5 2080 1133 16 41 22.797523 100lg5 1 19 1 6 6 2073 1857 17 29 40.642895 WN5 1 19 1 6 7 2073 1893 17 42 16.725037 a4 1 19 1 7 0 2030 606 50 1329 -1 5 1 19 1 7 1 2057 606 18 55 16.984085 wars 1 19 1 7 2 2057 669 17 57 10.910736 Uoae)5 1 19 1 7 3 2035 733 41 74 46.712616 leet5 1 19 1 7 4 2030 974 50 38 39.885651 1045 1 19 1 7 5 2031 1010 49 54 0.000000 Prsok5 1 19 1 7 6 2034 1065 39 19 30.420479 a5 1 19 1 7 7 2034 1082 39 54 0.000000 ue5 1 19 1 7 8 2057 1142 16 33 79.553360 am5 1 19 1 7 9 2043 1373 36 57 21.640205 maw5 1 19 1 7 10 2045 1847 17 29 62.762802 WN5 1 19 1 7 11 2045 1883 17 52 23.695366 90g4 1 19 1 8 0 2029 749 28 426 -1 5 1 19 1 8 1 2034 749 17 58 25.455460 NRO5 1 19 1 8 2 2029 877 28 28 82.627487 SPE5 1 19 1 8 3 2029 913 28 41 3.693359 $,QOy5 1 19 1 8 4 2029 961 28 19 25.081436 20)5 1 19 1 8 5 2034 1077 17 98 0.000000 e9:wone20}4 1 19 1 9 0 2006 484 35 1452 -1 5 1 19 1 9 1 2006 484 34 54 0.000000 BonaN5 1 19 1 9 2 2007 603 34 49 0.000000 feree!5 1 19 1 9 3 2019 1377 16 20 28.506104 ve5 1 19 1 9 4 2019 1402 20 42 42.798424 Aang5 1 19 1 9 5 2008 1612 34 32 42.197067 6G/5 1 19 1 9 6 2008 1646 34 20 65.344330 VS5 1 19 1 9 7 2017 1673 17 16 83.606400 105 1 19 1 9 8 2016 1695 22 129 0.000000 10em-DURRUEW5 1 19 1 9 9 2016 1829 18 51 0.000000 SAAON5 1 19 1 9 10 2016 1887 18 49 0.000000 [Oressy4 1 19 1 10 0 2005 1036 26 128 -1 5 1 19 1 10 1 2005 1036 26 33 19.354546 cu5 1 19 1 10 2 2014 1112 13 52 9.289772 LUO:4 1 19 1 11 0 1978 477 57 1866 -1 5 1 19 1 11 1 1984 477 49 82 0.000000 ‘Aouaiptb5 1 19 1 11 2 1984 566 49 46 0.000000 nog5 1 19 1 11 3 1984 650 48 52 11.888107 Pope5 1 19 1 11 4 1984 718 48 89 0.000000 mgooevess5 1 19 1 11 5 1978 865 57 91 0.000000 WORN5 1 19 1 11 6 1988 1013 40 24 6.798134 ae5 1 19 1 11 7 1988 1055 39 44 15.926773 ones 1 19 1 11 8 1982 1117 44 65 0.000000 om5 1 19 1 11 9 1989 1564 14 30 13.484573 IN,5 1 19 1 11 10 1993 1625 10 51 0.000000 MOSM5 1 19 1 11 11 1992 1688 11 27 0.000000 TIM5 1 19 1 11 12 1988 1731 16 1 0.000000 Z5 1 19 1 11 13 1987 1751 17 92 33.898666 MUNDI5 1 19 1 11 14 1987 1862 17 24 91.520546 AQ5 1 19 1 11 15 1987 1904 17 111 2.351875 GAFevgdig5 1 19 1 11 16 1987 2035 16 44 52.297707 SVM5 1 19 1 11 17 1990 2099 12 52 0.000000 LHW5 1 19 1 11 18 1990 2161 13 56 0.000000 isso5 1 19 1 11 19 1982 2227 26 51 0.000000 Images 1 19 1 11 20 1986 2296 17 47 0.000000 SWE2 1 20 0 0 0 1970 448 28 733 -1 3 1 20 1 0 0 1970 448 28 733 -1 4 1 20 1 1 0 1970 448 28 733 -1 5 1 20 1 1 1 1970 448 28 733 95.000000 2 1 21 0 0 0 1788 2357 11 196 -1 3 1 21 1 0 0 1788 2357 11 196 -1 4 1 21 1 1 0 1788 2357 11 196 -1 5 1 21 1 1 1 1781 2357 28 31 11.722244 ae5 1 21 1 1 2 1788 2399 10 34 16.653885 8D5 1 21 1 1 3 1781 2441 28 27 38.680359 Nem5 1 21 1 1 4 1788 2475 11 78 20.128876 woe5 1 21 1 1 5 1781 2535 28 21 18.278473 pe2 1 22 0 0 0 1754 924 55 1630 -1 3 1 22 1 0 0 1754 924 55 1630 -1 4 1 22 1 1 0 1754 924 55 1630 -1 5 1 22 1 1 1 1754 924 55 1630 95.000000 2 1 23 0 0 0 1760 924 44 1285 -1 3 1 23 1 0 0 1760 924 44 1285 -1 4 1 23 1 1 0 1760 924 44 1285 -1 5 1 23 1 1 1 1760 924 44 1285 95.000000 2 1 24 0 0 0 1775 378 16 318 -1 3 1 24 1 0 0 1775 378 16 318 -1 4 1 24 1 1 0 1775 378 16 318 -1 5 1 24 1 1 1 1775 378 16 318 95.000000 2 1 25 0 0 0 1733 1467 37 1073 -1 3 1 25 1 0 0 1733 1467 37 1073 -1 4 1 25 1 1 0 1733 1467 37 1073 -1 5 1 25 1 1 1 1733 1467 37 1073 95.000000 2 1 26 0 0 0 1735 1467 31 866 -1 3 1 26 1 0 0 1735 1467 31 866 -1 4 1 26 1 1 0 1735 1467 31 866 -1 5 1 26 1 1 1 1735 1467 31 866 95.000000 2 1 27 0 0 0 1760 556 14 337 -1 3 1 27 1 0 0 1760 556 14 337 -1 4 1 27 1 1 0 1760 556 14 337 -1 5 1 27 1 1 1 1760 556 14 337 95.000000 2 1 28 0 0 0 1703 287 65 1894 -1 3 1 28 1 0 0 1703 287 65 1894 -1 4 1 28 1 1 0 1703 287 65 1894 -1 5 1 28 1 1 1 1703 287 65 1894 95.000000 2 1 29 0 0 0 1676 206 84 2364 -1 3 1 29 1 0 0 1676 206 84 2364 -1 4 1 29 1 1 0 1676 206 84 2364 -1 5 1 29 1 1 1 1676 206 84 2364 95.000000 2 1 30 0 0 0 1254 205 248 2371 -1 3 1 30 1 0 0 1254 205 248 2371 -1 4 1 30 1 1 0 1254 205 248 2371 -1 5 1 30 1 1 1 1254 205 248 2371 95.000000 2 1 31 0 0 0 1273 237 11 125 -1 3 1 31 1 0 0 1273 237 11 125 -1 4 1 31 1 1 0 1273 237 11 125 -1 5 1 31 1 1 1 1273 237 11 125 0.000000 Eroucce5 1 31 1 1 2 1264 307 28 31 0.000000 #PO35 1 31 1 1 3 1264 347 28 19 26.108292 Oy2 1 32 0 0 0 87 194 1213 61 -1 3 1 32 1 0 0 87 194 1213 61 -1 4 1 32 1 1 0 87 194 1213 61 -1 5 1 32 1 1 1 87 194 1213 61 95.000000 2 1 33 0 0 0 1180 1125 63 533 -1 3 1 33 1 0 0 1180 1125 63 533 -1 4 1 33 1 1 0 1180 1125 63 533 -1 5 1 33 1 1 1 1196 1125 46 85 68.317871 SN YUM JAUUO | Kemoyesy “S/}!} B4eMYOS Puke SaOSSaI9e BIeEMPIEY OOO'OE 49A0 WOU) BSOOYD pue LOD'doysjods'MMmM JNO 499U esueak omy Jaye BuO Mau e JO aSeYydINd ay} PueMo} WaySAs ANOA UL ape} NOK 4a] Seseysund wesdoid ws EM (:sNOA, 666$ YO-:SOW 8b YOd HLNOW VW 8Z2$ SV MOT SV (2N TWA ObZ$) SSAIOV LANYSLNI wLIN'AVMSLVD YVAA'T ° 8 ALINS .LOZdYadQUOM .TaNOD — SYVMLIOS 1N4YIMOd « WALSAS YSNVadS OFYSLS 3JD3ld-2 GNV WON-d9 — GNNOS LVaHyD e (ATEWMGIA .6'ET) YOLINOW YO109 .ST — AVTdSIG LNVITHUG ° JAC GYVH 89€'p 8 WWUdS SINZE — AYOWSI SNOWYONG « ZHWOOr YOSS3D0UNd d wNOHA TIO e13.LNI — YAMOd S.1NUS « 000404 T-d LIdTHxXa Gateway LIAS (‘pod asnoul p puy) apo Dd AO} 143 ‘66CLS 404 yousezU] 2uUISsU0 Ss 3} Sopny] O LIaTHXS ‘pod asnoul D apNnpPul Sdd SWOS EXHIBIT C-l e re00 Gauewny 2000, Inc AB cs revered, Gammon, Yur!) Ware, ears venrde. ad Prod NETOS AT LACATAEKS OF TUGtNOrOS . ping and handing and taxes. Morty [rom rate versione. e rasa regan in 30 cya ol aaivery, Ruras access $3.96 ‘support package upgrades. Caf us tor dewle 3 ‘purchases. 4, Capanie of recenving at movema y a eee or a its tions software end commurscations pro 1951, North Sioux City, SO 57 -1951 tor a free Copy of our limited wa: wath which you are commun Hawai, Puerto Rico and Canada (exciuding Client Gateway Proouct. Consumer Ad. 4045 Headline: 1299 AMO Visuat(s): G6-400C Space: Remnant Space 5 . and portables). You may be asked to take your Pe to a Gateway location for warranty serv (pated te NETLYMAAK2000 oat and Microauh Mer anet reiade on Gaswway’e Year 2000 support can be jound a www This advertisement was prepared by vob #: GTW/CONMN90087 “a Right now you can get a loaded Gateway Essential 400c 4 . eC ™ Vsit®) Gateway™ Essential PC withan + tnt” Celeron ADM Process celeron *£V700 28 Screen Pitch 17” Monitor (1s.3" viewable) * 8MB AGP Graphics © 8.4GB Ultra ATA Hard Drive © 13X min/32X max CD-ROM & 3.5" Diskette Drives * SoundBlaster* AudioPCi™ 64D * Altec Lansing” GCS-100 Speakers ¢ S6K* internet/Fax Modem * Micro-Tower Case * Multifunction Keyboard & Mouse ¢ HelpSpot™ Troubleshooting & Self-Repair Software * Microsoft® Windows® 98 * Corel® WordPerfect® Suite 8 1-Year Parts, Labor & On-Site Support® Year 2000 Compliant* «1-Year gateway.net™ Internet Access’ $1299 or as low as $37/mo. for 48 mos: Great addition:

Epson® Color Printer — Add $179 Intel® Celeron™ processor at a terrific price, plus gateway.net™ Internet access' for an entire year. And, if you buy through our Your:)Ware™ programy’ you can pay $1299 or as low as $37/mo. for 48 months? So call us today and we'll have it built and delivered right to you.

: . Gateway.

Ad Code: #40015 Call, click or come in 1-000-000-0000 www.gateway.com Hours: 10am to 9pm Mon.—Sat,, Noon to 6pm Sun. Joga and intel ere regetered | trademarks o their reapectve Tagernarks, and Ceveron le a trademark of inisl Gateway products sre engineered to Gateway by. 1) financing through 8 Galewey authorized lender, 2) purchasing an sadional d an Annual Percentage Rate ae low a8 14 Fh. Your APR may be higher Th access check toe nt Oats trancior fale dependent upon variates, Inch cular ‘AY of write 10 Gateway Terms & Conditions, P.O. Box duct In the continental United States, Alaska, ica, See agreements for specitic terms and limitations. 8. Gateways inet These lagues are nol related to the hactware and operating system, and cant cornmunical 80, the determined ITUrranties and on-site service agreements. It Gateway determines ores! Yous 2000 test suite. ‘Gateway le not reeponaitse lor any UWTd8 gateway comyearz000 ty eottware that wnproperty sete, resets, Of calculates ales ! McCann-Enickson Inc ee ee Z esue: Week ot 2/26/00-Nuwus Marketing a Es sgitg’s ¢ ; Breed: NA 2 bard o .o8e e22 ge Trim: NA 2 23 58 5 qi Beg SB Live: 13x21 ir] z g28g0 age x 8Bu Be AD: J, Maggiore & weigass tebe ge 2 Cw: 0. Stakiotahs & Needs Saal ss SESCSaRRS CD: H. Waiters 2 BeESSESA QRRPEBSe a ye =| HERE ia ae Palxess | Bede dSEEEEPESSoSS5 E85 “Mystery Box -Free ISP”

QGTY3997 6/8/99 :

OPEN ON TWO BOXES, ONE CORRUGATED BROWN WITH QUESTION MARKS. THE OTHER IS THE GATEWAY BOX. A HAND COMES IN TO PULL THE GATEWAY BOX AWAY TO REVEAL THE FULLY LOADED GATEWAY PC. DETAILED VIDEO INSTRUCTIONS TO FOLLOW. VO:

When you buy a bargain basement PC, what you're really buying is a mystery box. Will there be a monitor? Probably not. Lots of software? Ha.

A free year on the Internet? Legal S 3 legal Super “ For a limited time. No monthly fee 1" year. Rural access $3.95/hour. Local access $1.5O/hour over 150 hours. 12 months mums from delivery. Must register w/in 30 days of delivery. 24/7 tech support? Dream on.

With a Gateway Essential PC, you know exactly what you’re getting. Monitor, great software, award-winning tech support and free Internet access, for $28 a month. No mystery there.

Supers:

As low as $28/mo. for 48 mo. or $999 Legal Super:

Prices exclude shipping and handling and taxes. Loan financing available on approved credit through independent lender. APR as low as 14.9% 2% check access fee ($2 mir/$15 max.). Restrictions apply. Call for details.

Call 1-800-GATEWAY for a Gateway Essential PC with an Intel Celeron processor. Supers:

1-800-GATEWAY free Internet End frame:

Gateway logo 1-800-GATEWAY www ..gateway.com Intel logo 00008 | — / Gateway HIBIT D EXHIBIT E Let’s talk about th traveling compani« On the road again? We'll build you a portable with all the powe: | of a desktop PC. So you can do spreadsheets, send e-mails, mak and more, to make you just as productive as back at the office. pentium] play games and watch DVD movies to make traveling more fun. and 9100 each won the August ’98 PC Magazine Editor’s Choice award, and the eR <4 it the magazine’s Best Buy Award as well. With the best portables on the market f :

more reason why customers who buy another computer come home to Gatewc the ultimate union.

| the power and features mails, make presentations the office. You can even j more fun. The Solo* 2500 d, and the Solo 2500 won he market, it’s just one to Gateway.

EXHTRIT E-1 Wa Frequent Flier The fatest thing in portables | Other goodies Every Gateway client is unique, and so is All these add-ons Solo 2500SE every Gateway PC. The systems here are just are available when qa IZA" TET Color Displz examples of what we can build for you. you purchase a Intel Pentium Gateway system. Processor with MMX'T King of the Road The Portable Technology 200MHz Solo 5150LS Desktop Canon* B}C*-80 Color 32MB SDRAM Solo 9100LS Bubble Jet Printer (expandable to 160MB) 14.1" XGA TFT a 14.1" XGA TET ($299) 2MB Graphics Color Display Color Display Accelerator : wi 64K Colors Incel® Pentium® {I Intel Pentium UI Kensington* Processor 233MHz Processor 266MHz Saddlebag ($79) Integrated 8X min/20X with 512K Cache with 512K Cache max CD-ROM Drive & 3.5" Disk Drive 64MB SDRAM 64MB SDRAM MS Professional (expandable to 160MB) (expandable to 192MB) Resource Suite ($99) eae ATA ard Drive 2.5MB 256-Bit 4MB SGRAM 3-D Graphics Accelerator Graphics Accelerator PC Card Modem with NiMH Battery & AC Pa Modular DVD-ROM Ii Modular DVD-ROM Cellular Support USB Ports, CardBus Drive & 3.5" Disk Drive Drive & 3.5" Disk Drive ($50 upgrade from & Zoomed Video Supp< 4GB Ultra ATA 6GB Ultra ATA Winmodem) NTSC/PAL Video Oucp: Hard Drive Hard Drive Integrated 16-Bit Sound: Lithium lon Battery Lithium lon Battery & Kensington & Stereo Speakers Be cause AC Pack Master Lock® ($39) TelePath 56K' Modem 2 USB Ports, CardBus & for Windows 2 USB Ports, CardBus Zoomed Video Su t sm & Zoomed NTSC/PAL Vid ma 2 gateway.net Casual Case Video Support Output ideo Input 14.95/mo. EZ Pad Pointing Device N Vi; F TSC/PAL Video Output 16-Bit Wavetable Sound & Microsoft Windows ne Integrated 16-Bit Sound & Altec Lansing* ome Essentials & Stereo Speakers Speakers: LapLink V.7.5 for TelePath® 56K! Modem TelePath 56K' Modem for tindows 98 & for Windows Windows cAtee Virusocan Deluxe Leather Case Deluxe Leather Case Fed Pareway Gold Service’ EZ Pad® Pointing Device EZ Pad Pointing Device iso As low as Microsoft® Windows® 98 Ee Microsoft Windows 98 & & MS® Office 97, MS Office 97, Smail $ 50/mo. Small Business Edition Business Edition plus for 48 mos. or $ 179 plus Bookshelf® 98 Bookshelf 98 LapLink® V.7.5 for LapLinkV75 f_ Windows 98 & “wows 98 & McAfee® VirusScan McAfee VirusScan Gateway Gold” Service’ Gateway Gold Service’ for Portable PCs for Portable PCs g As low as As low as $81/mo. = $95/mo. P4 for 48 mos. or $2899? for 48 mos. or $3399° 888-888-2013 www.gateway.com/yourware Let’s talk about your Gatewa' © 1998 Gateway 2000. inc Ali rights reserved Galeway and the Gateway styled logo are trademarks, and Your |Ware 1S a service mark of Gateway 2000 Inc The Intel Inside Logo and Pentium are registered trademarks, and Mt> vSdeMark of iniel Corporation. All other brands and product names are vademarks oF registered Tacdemarks of thew respective Companies All prces and Conhgurabons are subyect to change without nolice Or Obkgation Prices Oo include shipping and handing or any applicable taxes Many Gateway pmducis are engineered to Gateway specihcations. which may vary om retail versions of the software andor hardware m funchonaiity, perlormance of compatt Tradesn credtuisipnty available fl you purchase a new Gateway produc! Gateway will give you the average wholesale value on Ihe Your Ware product in good condition as Gelermined by Galeway's sole discretion. using the cuent (+ Blue Book of aremer, similar commerciaty reasonable industry standard determined by Gateway Other terms and conaitions apply Call our toll-free number lor details Paces do not mciude shipping and handling oF ary applicable li: Loan fnancing available on approved credit through dependent tender Payments based on 48 month lem and an Annual Percentage Rate as low as 149% Your APR may be higher 2% access check tee ($2 min /$15 map | apphcabie 10 Galeway purchases Telepnone fine charges may apply Not avgdabie in all areas 1 Ma»imum dala transier rate dependent upon cena peepee INCAKIING Boy ee modems with which you are Communcaling leler:'ines. communications software and communications protocol 2 Galeway Gold on-site and installation services are administered by PG Technglogy Services, Inc. for product (excluding m: keyboards, monitors and Solo portables) purchased and located in the continental United States. Alaska, Hawat, Puerto Ricd and Canada. 3 Gateway purchases wil! quality {c Your Ware program by 1] fmancing tough a Gateway authorized lender 2) purchasing six monins of gateway net and /or 3) buying an addiional software bundie Trade.in avaniadle af any time Detween the fst day ol the 24tr-monit the las! day of the 49th month after delivery of Your Ware Product 4 gateway net™ pricing Based uA 6 month commiment $15 tee lor early cancellavor EXHIBIT E-2 The Affordable Portable.

Whether you work in a downtown office or downstairs at home, the agreeably priced Solo® 2500SE and 2500LS are all business. Both are powered by Intel processors. They give you 12.1" TFT color screens for clear, brilliant color; superior 16-bit sound; stereo speakers; plus, integrated CD-ROM and diskette drives. And have you heard? Gateway can customize a portable to fit your specific needs.

The 2500SE. The even more powerful 2500LS. Whichever one is right for your career and life, we’re talking two powerful portables that are raring to go.

EXHIBIT E-3 Solo® 2500SE Your Basic Business Partner a 12.1" TFT Color Display Intel® Pentium® Processor with MMX™ Technology 200 MHz 32MB SDRAM (expandable to 160MB) 2MB Graphics Accelerator w/ 64K Colors Integrated 8X min/20X max CD-ROM Drive & 3.5" Diskette Drive 2GB Ultra ATA Hard Drive NiMH Battery & AC Pack USB Ports, CardBus & Zoomed Video Support NTSC/PAL Video Output Integrated 16-Bit Sound & Stereo Speakers TelePath® 56K' Modem for Windows EZ Pad® Pointing Device Carrying Case C4 Microsoft® Windows® 98 Microsoft Home Essentials™ LapLink* V.7.5 for Windows 98 McAfee® VirusScan ra Gateway Gold™ Service? for Portable PCs [ss GoldValue Lease $64/mo. for 36 mos.

vr $1799 call 888-888-2013 www.gateway.com ©1998 Gateway 2000, Inc. All rights reserved Gateway and the Gateway stylized logo are tademarks of Gatewa Maxi ts a trademark of Intel Corporation Any ofttes brands and product names are trademarks or registered trademarks change without notice of obligation. Prices do not include shipping and handling or any applicable taxes Many Gateway products are cu are communicating, telephone lines, communications software and communications protocols. 2. Gateway Gold on-site and installation services are provided by PC Tec product (excluding mice, keyboards, monitors and Solo portables) purchased and located in the continental United States, Alaska, | customers. Lease payments based on 36-month term Lease terms subject to change without notice or obligation 3. Leasing provided by independent leasing companies to qualifted commercial Solo 2500LS The Business Builder 12.1" TFT Color Display Intel Pentium Il Processor 233MHz w/ 512K Cache 32MB SDRAM (expandable to 160MB) 2MB Graphics Accelerator w/ 64K Colors Integrated DVD H Drive & 3.5" Diskette Drive 4GB Ultra ATA Hard Drive Lithium ton Battery & AC Pack USB Ports, CardBus & Zoomed Video Support NTSC/PAL Video Output Integrated 16-Bit Sound & Stereo Speakers TelePath 56K' Modem for Windows EZ Pad Pointing Device Carrying Case Microsoft Windows 98 Microsoft Office 97, Small Business Edition plus Booksheif® 98 LapLink V.7.5 for Windows 98 McAfee VirusScan g ;

Gateway Gold Service? for Portable PCs [s3 GoldValue Lease $89/mo. for 36 mos.? or $2499 p4g Let’s talk about your Gatewa Y 2000. Inc The inte! inside Logo. Inte! and Pentium are registered trademarks, anc of their respective companies All prices and configurations are subject to stom-engineered to Gateway specifications, which may vary a1 upon Certain vanables, including particular modems with which you hnoiogy Services, inc. for ico and Canada ™ awaii, Puerto Se !Phone Buuk Sioux F alls (605) 367-1888 (14400-56 bps) Tol Free (886) 709-4067 (14400-56 bps) EXHIBIT F VOLUME 131 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft complaint which the Western Region proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in § 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order: 1. Respondent Gateway, Inc. (“Gateway”’), is a Delaware corporation with its principal office or place of business at 610 Gateway Drive, North Sioux City, South Dakota 57049. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest. VOLUME 131 Decision and Order ORDER DEFINITIONS For the purposes of this order, the following definitions shall apply:

1. Unless otherwise specified, “respondent” shall mean Gateway, Inc., its successors and assigns and its officers, agents, representatives, and employees. 2. “Clear(ly) and conspicuous(ly)” shall mean as follows: a. _ In an advertisement communicated through an electronic medium (such as television, video, radio, and interactive media such as the Internet, online services and software), the disclosure shall be presented simultaneously in both the audio and visual portions of the advertisement if the claim triggering the disclosure is presented by both audio and visual means. In any claim presented solely through visual or audio means, the disclosure may be made through the same means in which the claim is presented. Any audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. Any visual disclosure shall be of a size and shade, with a degree of contrast to the background against which it appears, and shall appear on the screen for a duration and in a location, sufficiently noticeable for an ordinary consumer to read and comprehend it. b. In a print advertisement, promotional material, or instructional manual, the disclosure shall be in a type size and location sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears. c. Ona product label, the disclosure shall be in a type size and location on the principal display panel sufficiently VOLUME 131 Decision and Order noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears. The disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement or on any label. 3. In the case of advertisements disseminated by means of an interactive electronic medium, such as software, the Internet, and online services, a disclosure made “through the use of a hyperlink” shall mean a hyperlink that in itself is clear and conspicuous, is clearly identified as a hyperlink, is labeled to convey the nature and relevance of the information it leads to, is on the same Web page, online service page or other electronic page, and proximate to the triggering representation, and takes the consumer directly to the disclosure on the clickthrough electronic page or other display window or panel. 4. “Internet access service” shall mean any service that enables a consumer to access the Internet or any other electronic network.

5. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44. I.

IT IS ORDERED that respondent, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication: A. the price or cost to consumers of such service or what is included in the price of any such service; or B. the price or cost incurred by consumers, if any, for the use VOLUME 131 Decision and Order of “1-800,” “1-877,” or “1-888" telephone numbers, or any other telephone numbers for which respondent is the toll free subscriber.

Il.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the use of “1-800,” “1-877,” or “1-888 ” telephone numbers, or any other telephone numbers for which respondent is the toll free subscriber unless it discloses, clearly and conspicuously, the dollar amounts of any hourly surcharges and any other fees charged by respondent for use of such numbers. Ill.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any Internet access service, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the price or cost to consumers of such service, unless it discloses, clearly and conspicuously:

A. that consumers may have to pay long distance telephone charges, hourly surcharges, and other fees in excess of local telephone service charges to access the service, if that is the case;

B. the dollar amounts of any such hourly surcharges and any other such fees, other than fees which are not within the control of respondent or any of its promotional partners providing the service; and VOLUME 131 Decision and Order C. a means for each consumer to ascertain whether he or she would incur such fees or charges to access the service, such as a list of local access numbers available on the Internet or other electronic network; and D. that consumers should contact their local telephone company to determine whether using the access telephone number for the location closest to them will incur charges in excess of local telephone service charges. Provided, that in the case of advertisements disseminated through an interactive electronic medium, respondent may make the disclosures required by Part HI. A through D above through the use of a hyperlink labeled: “Additional Phone Charges May Apply. Click Here.”

Provided, further, that in the case of television advertisements, respondent may comply with Part II. A through D above by making the audio and visual disclosures through the use of the phrase “Additional Phone Charges May Apply. Call [a telephone number which is free to consumers] for Details,” and by clearly and conspicuously disclosing the information required by Part III. A through D above at the time consumers contact respondent through the telephone number.

IV.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, sale or distribution of any Internet access service, in or affecting commerce, shall prior to consumers incurring any financial obligation for such service or any other product or service sold in connection with such service, maintain adequate customer support to respond to consumer inquiries, including but not limited to, an adequately staffed, telephone number which is free to consumers and a directory on the Internet, to determine the telephone numbers available for accessing any such service and the town or city where those numbers are located. VOLUME 131 Decision and Order V.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, shall offer reimbursement to certain local access subscribers to Gateway.net services as provided in this Part. A. Respondent shall retmburse any Gateway.net local access subscriber, within thirty (30) days of receipt of the subscriber’s “Reimbursement Notification and Request,” attached as Appendix A to this order, as required under subpart B of this Part, who:

1. between January 19 and April 1, 1999 registered as a local access subscriber to the Gateway.net service; 2. between January 19, 1999 and August 15, 1999 incurred charges for the use of a “1-800,” “1-877,” or “1-888" telephone number while registered as a local subscriber; 3. has not been previously reimbursed for these charges; and 4. within sixty (60) days of receipt of Appendix A provides respondent with a signed statement that s/he requests reimbursement and has not previously been reimbursed for these charges.

B. Respondent shall send, within forty-five (45) days after the date of service of this order, by first class mail, exact copies of the “Reimbursement Notification and Request” attached hereto as Appendix A to the last known address of any Gateway.net local access subscriber who, according to respondent’s records, paid any fee for the use of a “1-800,” “1-877,” or “1-888" telephone number between January 19, 1999 and August 15, 1999 and has not received full reimbursement for such use. Respondent shall include a pre-addressed, postage paid envelope for consumers to return a signed “Reimbursement Notification and Request.” VOLUME 131 Decision and Order The front of the envelope transmitting Appendix A shall be in the form set forth in Appendix B to this order. The phrase "ATTENTION: REIMBURSEMENT OFFER" shall appear on the front of the envelope in typeface equal or larger in size to 14 point. The words "FORWARD & ADDRESS CORRECTION REQUESTED" shall appear in the upper left-hand corner, one-quarter of an inch beneath the return address. Except as otherwise provided by this order, no information other than that required by this Part shall be included in or added to the above items, nor shall any other material be transmitted therewith. Respondent shall also mail the “Reimbursement Notification and Request” and a pre-addressed, postage paid envelope, to any such local access subscriber whose mailing is returned by the U.S. Postal Service as undeliverable and for whom respondent thereafter obtains a corrected address via the National Change of Address (““NCOA”’) registry. Respondent shall retain a NCOA licensee to update its list of such local access subscribers under this subpart by processing the list through the NCOA database. The mailing required by this subpart shall be made within ten (10) days of respondent's receipt of a corrected address or information identifying each such local access subscriber. . Respondent shall send reimbursement checks to local access subscribers, under subpart B of this Part, who complete and return to respondent the “Reimbursement Notification and Request” set forth in Appendix A to this order, postmarked within sixty (60) days of receiving it, and who fulfill the requirements set forth in subpart A of this Part. Respondent shall send each reimbursement check by first-class mail, postage prepaid, within thirty (30) days of receipt of each local subscriber’s completed “Reimbursement Notification and Request.” The front of the envelope transmitting reimbursement checks shall be in the form set forth in Appendix C to this order.

VOLUME 131 Decision and Order D. Within one (1) year after the date of service of this order, respondent shall furnish to the Commission a list of the local access subscribers who have applied for reimbursement pursuant to subparts B and C of this Part, the amount of each reimbursement request, and the date of mailing and amount of the reimbursement provided to each applicant.

E. Respondent shall, for three (3) years after the date of service of this order, maintain and upon request make available to the Federal Trade Commission or its staff for inspection and copying:

1. Sufficient records to identify:

a. The name and last known address of each person sent a notification pursuant to this order and the date the notification was mailed; and b. The name and address of each person who is notified by respondent that his or her reimbursement application is deficient;

2. Sample copies of all letters, descriptions, applications and forms sent to local access subscribers or others pursuant to this order; and 3. Each and every reimbursement application received. VI.

IT IS FURTHER ORDERED that respondent and its successors and assigns shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials containing the representation, provided, however, that multiple versions of VOLUME 131 Decision and Order advertisements and promotional materials need not be maintained or submitted if they differ only in representations not at issue in this order; and B. All materials that were relied upon in disseminating the representation.

VIL.

IT IS FURTHER ORDERED that respondent and its successors and assigns, shall deliver a copy of this order to all current and future officers and directors, and to all current and future managing employees, agents, and representatives having responsibilities with respect to the subject matter of this order. Respondent shall deliver a copy of this order to current personnel within thirty (30) days after the date of service of this order, and, for a period of three (3) years from the date of service of this order, to future personnel within thirty (30) days after the person assumes such position or responsibilities. VU.

IT IS FURTHER ORDERED that respondent and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.

VOLUME 131 Decision and Order IX.

IT IS FURTHER ORDERED that respondent and its successors and assigns, shall, within ninety (90) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order. X, This order will terminate on June 22, 2021, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission, Chairman Muris not participating. VOLUME 131 Decision and Order APPENDIX A REIMBURSEMENT NOTIFICATION AND REQUEST [Name and Address of Recipient] Dear [NAME]:

Our records indicate that you registered as a local access subscriber to Gateway.net between January 19, 1999 and April 1, 1999, and that you incurred charges for the use of that service between January 19, 1999 and August 15, 1999. Gateway is offering reimbursement to certain Gateway.net subscribers who, by error, were not adequately warned that they would be charged $3.95 per hour for the use of a toll-free telephone number to access the service. Gateway initiated this retmbursement program in August, 1999 and is committed to providing refunds to customers who did not understand that a fee would be charged for the use of these numbers. We would, therefore, like to offer you reimbursement for the fees you paid, if we have not already done so.

Gateway recently settled a dispute with the Federal Trade Commission that dealt with, among other things, the adequacy of advertising disclosures to warn customers of possible phone charges for Internet access. Our agreement with the Commission provides that we continue the process we had already begun of refunding fees to customers such as you. To request and receive your refund, simply sign the bottom of this letter, stating that you have not already received reimbursement from us, and return the entire letter within 60 days in the enclosed, postage pre-paid envelope. You should return this original letter, and make a copy for your records. If you have not been fully reimbursed already, we will be pleased to send you a check within one month after we receive your signed VOLUME 131 Decision and Order form. If you have any questions about this letter, please call us at [toll-free telephone number].

Sincerely, [gateway.net] REIMBURSEMENT REQUEST I have not been reimbursed for the $3.95 per hour charges I incurred to access Gateway.net between January 19, 1999 and August 15, 1999; and I request that a check be sent for the charges I paid. Signed:

VOLUME 131 Decision and Order APPENDIX B REIMBURSEMENT NOTICE LETTER ENVELOPE Gateway, Inc.

[address] FORWARD & ADDRESS CORRECTION REQUESTED [Address or address window] ATTENTION: NOTICE OF REIMBURSEMENT ENCLOSED VOLUME 131 Decision and Order APPENDIX C REIMBURSEMENT CHECK ENVELOPE Gateway, Inc.

[address] FORWARD & ADDRESS CORRECTION REQUESTED Window Envelope [Indicates a check is enclosed] VOLUME 131 Analysis Analysis of Proposed Consent Order to Aid Public Comment Issued when the Commission tentatively approved a proposed consent order on May 4, 2001 The Federal Trade Commission has accepted, subject to final approval, an agreement containing a consent order from Gateway, Inc. (“Gateway’’).

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will decide whether it should withdraw from the agreement or make final the agreement's proposed order. Gateway advertises and sells personal computers, computer peripherals, software, and Internet services to the public. This matter concerns allegedly false and deceptive advertising of Gateway’s Internet access service, “Gateway.net.” The Commission's proposed complaint alleges that Gateway advertised that with the purchase of certain computer models, Gateway.net Internet access service would be included for free for one year, or could be purchased for a flat fee, such as $14.95 a month. In fact, for many consumers one year of Gateway.net was not free or obtainable for a flat fee, because these customers incurred long distance charges to access Gateway.net, or were charged $3.95 per hour by Gateway for the use of a “‘toll-free" telephone number to access the service. The Commission’s proposed complaint challenges these “free” or “‘flat-fee” ads as both misrepresentations and as failures to disclose material facts under Section 5 of the FTC Act. Further, the complaint alleges that Gateway falsely represented that the use of its “toll free” 1- 888 number to connect to the Internet was free to consumers. In fact, Gateway charged consumers $3.95 per hour for the use of this “toll-free” number.

The proposed consent order contains provisions designed to prevent Gateway from engaging in similar acts and practices in the future. Part I of the proposed order prohibits the company VOLUME 131 Analysis from misrepresenting the price or cost of any Internet access service, or of any “toll-free" telephone number. Under the order, the term “Internet access service” is defined as “any service that enables a consumer to access the Internet or any other electronic network.”

Part II of the order prohibits representations regarding the price or cost of any “1-800" or “toll-free” telephone number provided to the consumer by Gateway unless it discloses, clearly and conspicuously, the dollar amounts of any hourly surcharges and any other fees it charges for the use of such numbers. Part III of the proposed order requires that Gateway clearly and prominently disclose that consumers may have to pay long distance telephone charges, hourly surcharges, or other costs in excess of local telephone service charges to access any Internet access service. Gateway must disclose the dollar amounts of any such fees within its control or the control of any of its promotional partners providing the service. It must also provide a means for each consumer to ascertain whether he or she would incur such fees to access the service, and inform consumers that they should contact their local telephone company to determine whether using the access telephone number for the location closest to them will result in charges in excess of local telephone service charges. ___Part IV of the order requires that Gateway maintain customer support to answer consumer inquiries regarding any Internet access service, including but not limited to, an adequately staffed toll-free number where consumers can determine whether they have a local access number for such service. Part V is aredress provision requiring that Gateway refund all charges for “toll free” numbers paid by local access plan gateway.net customers who registered for the plan between January 19, and April 1, 1999, and who paid such fees up until August 15, 1999. Parts VI through IX of the proposed order contain the usual reporting and compliance provisions, and, Part X is a provision "sunsetting" the order after twenty years, with certain exceptions.

VOLUME 131 Analysis The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

VOLUME 131 Complaint