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Apple sues Ontario electronics recycling firm
Apple Inc. is suing electronics recycling firm GEEP Canada for allegedly stealing and reselling nearly 100,000 iphones, ipads and Apple Watches it was supposed to destroy.
The tech giant claims that the resales damaged demand for new Apple products, created safety issues for consumers and hurt its brand by keeping products intended to be destroyed on the market. Barrie, Ont.based GEEP has denied all wrongdoing and filed a third- party suit claiming that three of its employees engaged in the theft without its knowledge.
Apple is looking for $ 31 million in damages from the firm, plus the full amount of any proceeds it made from reselling the devices.
Apple hired GEEP in Nov. 2014 to safely destroy its old products and ensure they didn’t end up in landfills. Recycling products is part of Apple’s mission to be more environmentally friendly. It also allows the firm to save money by reusing certain products, such as cobalt, which are extracted from old phone batteries to use in new ones. Apple encourages customers to drop off their old devices, which it then sends to firms like GEEP for recycling. Between January 2015 and December 2017, Apple shipped 531,966 iphones, 25,673 ipads and 19,277 Apple Watches to GEEP, according to the suit.
Apple said it discovered the theft after auditing GEEP’S warehouse and finding that its products were being moved into areas not covered by cameras. The firm checked the serial numbers of the products it sold to GEEP and said it found that about 18 per cent of all devices it shipped to the facility between January 2015 and December 2017 were active on carrier networks.
“At least 11,766 pounds of Apple devices left GEEP’S premises without being destroyed — a fact that GEEP itself confirmed. These misappropriated devices were then subsequently sold at a significantly higher price than other recycled materials to downstream vendors who refurbished and resold the devices to consumers,” reads Apple’s suit, which it filed in January.
Apple claims that wireless- only devices, like some ipads, will not appear on carrier networks, while other devices may not be connected to networks, making the real number of stolen devices higher. Lawyers for Apple did not respond to The Logic’s requests for comment.
GEE P’ s third-party claim, filed in July, states that three “rogue” employees, namely its continuous improvement manager Roger Micks, director of EOL operations Edward Cooper and general manager of training Steven White, stole the Apple products and sold them to Fu Yuan Yang, the president of Whitby Recycling. Yang and his firm then sold them to individuals in China, according to the suit. GEEP is looking for the three former employees, as well as Yang and Whitby Recycling, to pay damages if Apple wins, and also cover GEEP’S court costs.
“In an attempt to conceal their activities, including from GEEP’S management and executives, some or all of Micks, Cooper and White, either directly or indirectly, created and/or manipulated documentation evidencing the supposed destruction of the Stolen Products, even though no such destruction occurred,” reads GEEP’S claim.
None of the allegations from GEEP or Apple has been proven in court. In September 2019, GEE P Canada merged with the Shift Group of Companies to form Quantum Lifecycle Partners. The combined firm had eight facilities in four provinces and over 400 employees.
President Gary Diamond told The Logic his firm is not party to the lawsuits. “The lawsuit is between GEEP and Apple and we have no knowledge regarding the details.” He did not respond to questions about the relationship between Quantum and GEEP.
GEEP’S legal team declined to comment. Cooper and White did not respond to requests for comment. Attempts to contact Micks, Yang and Whitby Recycling for comment were unsuccessful.
In its court filings, GEEP said it only found out about the theft after Apple conducted its inspection because the three men used their access to GEEP’S systems to reclassify and hide the identities of the products. Once Apple notified GEEP, the suit claims, it installed new recording devices and instructed security staff to increase their monitoring of the plant as part of an internal investigation, which led the company to believe that the three men had been selling the devices. Two of the employees had already resigned at that point, and GEEP terminated the third, according to its filings. GEEP claims it did not violate the service agreement and that, contrary to Apple’s claims, it made no money from the resale of the Apple products and also lost a significant sum once Apple terminated the recycling agreement.
GEEP suffered “extensive business losses” due to the breach and “has or will suffer a loss of income and loss of reputation,” according to its suit. It has also tried to locate and purchase the stolen products, but was unsuccessful.
Apple’s lawsuit placed responsibility for the theft squarely with GEEP, as “the scheme was extensive and included members of GEE P’ s senior management” and “GEEP’S officers and directors knew or ought to have known about the scheme.” GEEP has requested that its claim against Whitby Recycling and the four men be tried at the same time as Apple’s suit against GEEP, or if the court will not order that, then immediately after.