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Resellers sue Apple over sales tactics

Three Mac dealers are suing Apple Computer, charging the computer maker with a host of business wrongs ranging from overbilling to poaching customers.

A number of Macintosh dealers are suing Apple Computer, charging the computer maker with a host of business wrongs ranging from overbilling to poaching customers to stocking its own stores with new gear unavailable to resellers.

Three suits have been filed in recent months by Apple dealers, including San Francisco-based Macadam Computer, Los Angeles-based Computer International, and Oregon-based MacTech Systems. The resellers charge Apple with breach of its contract and fraud, saying the computer maker hurt their business by failing to pay them for repairs they made under warranty, by overcharging them for parts, and by disparaging the dealers to potential customers in an effort to gain more direct sales business.

An Apple representative declined to comment on the cases, which were filed over the past four months in Santa Clara Superior Court in San Jose, Calif. Apple has sought to have at least some of the cases moved to federal court, but the company has not addressed the specific allegations, according to court records. All three Mac dealers are represented by Marcus Merchasin, a San Francisco-based lawyer.

Macadam, which is seeking millions of dollars in damages, charges that Apple has contacted the store's customers, telling them that Macadam was not really an authorized dealer and urging them to deal directly with Apple. The suit also charges Apple with engaging in "predatory practices" by offering those customers discounts that were not available to Macadam.

The San Francisco store also alleges "unfair and deceptive accounting practices," saying Apple charged for parts that were returned and denied claims for products it had earlier said were under warranty.

"Such actions are burdensome, oppressive, annoying, fraudulent, intentional and despicable," Macadam said in its lawsuit.

In addition to the legal issues raised by the suits, the actions highlight the tensions between Apple and some of its dealers. Some dealers say the strain between Apple and them has increased as the company has built up its direct sales efforts--both online and retail--in the past few years.

Larry Moon, a vice president at Mac-only store Di-No Computers in Pasadena, Calif., said that he is concerned by feedback he has heard that Apple salespeople have told customers they will get better service by going direct through Apple.

"We can't have Apple telling people they get bad service" from dealers, Moon said. "That has happened on the phone."

Moon said he has no plans to sue the company that has supplied his products for the past 25 years, but said he is concerned that Apple's stores sometimes have new products he can't get his hands on, or offer promotions not available to his customers.

"It's not always a level playing field," said Moon, who competes with a new Apple store two miles away and another Apple-owned store in neighboring Glendale. The stores are taking away business, he said, but it is hard to know how much because the arrival of the Apple outlets coincided with a downturn in the economy.

As for the billing issues raised in the suit, Moon said getting reimbursed for repairs has long been a challenge with Apple, with the computer company often denying warranty claims or saying parts were not returned. However, he said that by keeping good records, such disputes eventually get resolved.

"It's a lot of work, but if you stay on top of it you eventually get your money," Moon said. "They just changed their system recently; hopefully that will improve."