Apple Retailer Lawsuit Makes Bay Area TV News

by , 8:00 AM EST, February 24th, 2004

Elite Computers shut its doors last April, a victim, according to the company, of Apple's unfair treatment to its resellers. A lawsuit from Elite's Thomas Armes and MacAdam's Tom Santos followed soon, with both retailers claiming that Apple was systematically and unfairly putting them out of business in order to make way for the company's own chain of Apple Stores. The two former Mac retailers have taken their story to Bay Area airwaves, with San Francisco's Channel 7 (KGO), an ABC affiliate, giving the story several minutes of airtime.

Channel 7 noted that the lawsuit against Apple contained charges of "fraud, breach of contract, unfair competition, false advertising, and even racketeering." Shot in part in front of Apple's new San Francisco location, still under construction, the reporter pointed out that the MacAdam retail location was but a few blocks away. From the report:

Armes: "We always knew there were problems, but you know, Apple kept telling us we were the only ones."

But he wasn't. Dealers began to talk to one another and they say the problem is widespread. As Apple-owned retail outlets opened, authorized dealers in those areas reported losing their access to products.

Armes: "When you treat their stores different than our stores, that's unfair and it's illegal."

Tom Santos, owner, MACadam: "Apple's trying to disband the dealers. They want to put the dealers out of business."

The reporter said that Apple declined to comment from the story, in keeping with the company's normal policy concerning ongoing lawsuits.

We caught the report on local TV, but you can read the story on the KGO Web site.

The Mac Observer Spin:

It's a fact that many Mac retailers were not given inventory when new models were released, despite nearby Apple Stores having plenty, and to spare. It's difficult not to conclude that this is a deliberate effort on Apple's part. We are of the camp that says this is not the way to treat your business partners, but then Apple has a history of not being so good to its business partners (we should note that BusinessWeek said that this is exactly what Apple should do for all of its retail locations).

None of that is really "news," however, as this is a story long in the making. What is news, however, is how Apple just got a dose of bad publicity. Whether or not Apple has done anything wrong in its retailer relations, the story that KGO aired made the company look bad. It will be interesting to see if such publicity affects the lawsuit in any way. It's not likely, but you never know.

What are your thoughts on this issue?

KGO Story