In a nutshell: Apple reportedly filed a lawsuit against a Canadian recycling firm in January for stealing and reselling more than 100,000 obsolete devices. The recycler was supposed to destroy the products and retrieve resources like cobalt for reuse, but instead sold them to "downstream" resellers for refurbishing.
The Logic notes that Ontario-based recycler GEEP was contracted by Apple to collect old iPhones, iPads, and Apple Watches and safely dispose of them. Reuseable materials were to be returned to Apple's suppliers. The company has been under contract since 2014.
Recently, Apple became suspicious during a warehouse audit when it found that GEEP housed some of its devices in an area not covered by cameras. So Cupertino checked the serial numbers of the products GEEP had received between 2015 and 2017. It found that 18 percent of the 531,966 iPhones, 25,673 iPads, and 19,277 Apple Watches were active on cellular networks.
"At least 11,766 pounds of Apple devices left GEEP's premises without being destroyed—a fact that GEEP itself confirmed," said the court filing. "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."
At least 103,845 devices were found to have been resold. Apple says that the actual totals are probably higher since it can only identify those connected to a carrier's network. So, for example, there is no telling how many GPS-only Apple Watches the recycler stole.
GEEP claims it has done nothing wrong and was unaware of the theft. However, Apple points out that the firm filed a separate lawsuit against three "rogue" employees in on the theft who were all executive management. Although the thieves had falsified documents in an attempt to cover their tracks, Apple's legal team is not buying the claim that the company was unaware of the illegal actions.
"The scheme was extensive and included members of GEEP's senior management," says the lawsuit. "GEEP's officers and directors knew or ought to have known about the scheme."
Apple says that theft and resale of its products hurt its business by driving down demand and possibly endangering its customers with products that were meant to be destroyed. It seeks 31 million CAD ($23 million) in damages and all of the proceeds from the sale of the misappropriated devices.
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