Computer store owner Tom Santos has posted on-line an amended version of his long-running civil lawsuit, which accuses Apple of several unfair business practices, and asking for at least $7.5 million in damages. The lawsuit claims that in a June 3, 1999 e-mail message, Apple vice president of sales Mitch Mandich told dealers, "Apple does not understand retail. There are no plans to open Apple stores." But when Apple finally did open retail stores, it told dealers the stores would only be "showrooms" and wouldn’t cannibalize sales.
Among the many other claims of malfeasance in the lawsuit, Apple is accused of giving its own stores preference over dealers for supplies of products, that in August 2000 Apple recruited dealer employees for its then-future retail stores, and that Apple used the dealers’ confidential customer files to help its own stores compete. The lawsuit also alleges that Apple has a practice of charging its own retail stores less for products than authorized dealers, thereby giving itself a financial advantage.
Interestingly, the lawsuit complains about the designation of "Genius" at Apple’s retail stores. The lawsuit claims that Apple told its dealers the designation "Apple Specialist" would be represented by Apple to the general public as the highest level of service provider available to consumers. Yet, in Apple’s retail stores, "Specialists" were considered sales associates, and that "Geniuses" were considered the highest level of service person.
The lawsuit continued, "The Apple retail stores are deliberately targeted to, and concentrated in, large population centers and nearby to existing Apple Resellers, Specialists and Service Providers." Yet, when authorizing resellers, specialists and service providers, the lawsuit says Apple refused to allow them to be located near each other, "to avoid prejudicial competition and interference with one store to another."
The lawsuit states, "Plaintiffs are informed and believe and based thereon allege, that unless restrained or enjoined from restraining trade, Apple will continue to open additional retail stores in furtherance of this plan and scheme to monopolize both the U.S. and local markets for both wholesale and retail sale of Apple computers and related services and continue restraining trade and disparaging its dealers."
