Customers, resellers bite Apple back

Writ slipped under wire

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Three US legal firms filed a nationwide class action lawsuit against Apple yesterday, accusing it of scamming customers with shorter warranty periods and passing old kit off as new.

The suit, filed in San Francisco on Thursday (Feb 17), represents consumers and resellers in two separate subclasses.

The consumer suit accuses Apple of selling old computers as if they were new. It also alleges that Apple has been deliberately shortening warranty periods on its computers, beginning them from the date of shipment to the reseller rather than the date of customer purchase.

Resellers in the suit are accusing the company of breaching confidentiality. Apple is using resellers’ customer lists to target new customers for its own retail network of Apple stores which it began rolling out in 2001, says David Franklin, a partner at Franklin and Franklin, one of the law firms: “They’re stealing customers that would otherwise be more than happy to go to the normal resellers.”

Resellers have also been damaged by the practices outlined in the consumer section of the suit, says Franklin, who says that they are unwittingly selling old equipment supplied by Apple as new, and are blamed by customers if they find out.

“They’re also damaged by the warranty cuts,” Franklin continues, arguing that Apple has charged resellers for parts that they ordered for machines still under warranty. “When they try to point out proof of warranty to Apple, it'll take them literally days to straighten it out." The problem also applies to extended warranties provided under the Applecare service, he says.

There are currently three individuals acting as representatives for the consumer class, and two for the reseller class, but the class-action lawsuit applies retrospectively to all customers and resellers dealing with Apple since January 1, 1995 who have been adversely affected. Franklin hopes that it will help resellers who have been afraid to speak out by representing them implicitly. "According to the agreement Apple can de-authorise them as a dealer at any time for any reason, so many dealers are petrified to sue."

The suit now has to be certified by the court before beginning the long road to a trial. If the suit succeeds, Franklin hopes that Apple may be precluded from engaging in similar future activities, and could also be liable to compensate users for the price difference between new and old machines. Apple was not available for comment.

Tom Santos, an Apple reseller who closed his store in January, is acting as an expert adviser to Franklin. Santos is already pursuing an individual lawsuit against Apple that overlapped slightly with the class-action suit.

The class action suit was slipped through under the wire - today (February 18), President Bush signs the Class Action Bill. It imposes strict limits on class action lawsuits, forcing many of them to be filed in federal court, which many believe is less sympathetic to such claims. It also restricts lawyers’ fees.

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