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08/31/2006, 12:00am, EDT

Thursday, August 31st

Foxconn backs down on iPod lawsuit

Apple's iPod manufacturing partner Foxconn has drastically reduced the amount of damages it is seeking in a lawsuit against two journalists in connection with an allegedly false report on the working conditions in Foxconn's iPod factories. Following a report that said Apple was going to help mediate the dispute between the parties, Foxconn has slashed a libel claim from 30 million yuan ($3.77 million) to just 1 yuan, according to the Xinhua news agency. Foxconn, which manufactures iPods for Apple, said it would also apply to unfreeze the journalists' assets, which include their homes, bank accounts and a car, according to the report. The Chinese manufacturing giant, which is also reportedly vying for additional laptop production business from Apple, was seeking damages caused by a tarnished reputation from false charges of labor abuse. "This is a victory for Chinese media," Weng Bao, one of the two reporters working for the Shanghai-based China Business News, was quoted as saying.

According to the report, it was not immediately clear why the damages claim had been cut; however, China Business News, the publication which published the report, had urged Foxconn to drop the case, saying it "strongly condemned" the lawsuit and would do whatever it could to support its journalists.

The Foxconn lawsuit triggered an ongoing public debate on protections for journalists, prompting atleast one industry watch group to write an open letter to Apple's CEO Steve Jobs. The journalists, whose report followed a similar one by a UK-based publication five days earlier, also setup their own blogs to give their side of the story. Nearly 2 million people had visited the blogs by the middle of Wednesday--mostly voicing support for the journalists--Xinhua reported.

While Foxconn admitted to breaking some local labor laws, Apple reported found no truth to most of allegations; however, it did find some violations related its Code of Conduct for suppliers and said that it was working with Foxconn to resolve those issues; however, Apple's report was criticized by some industry officials who believe that it should have hired a third-party to conduct the investigation.

Apple also said that it would continue to monitor the iPod factory conditions and also examine the conditions in its other manfacturing and production facilities.


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wrf
0
08/31, 1:12am, EDT
wait a minute, since when is china all about free speach and stuff? btw if someone posts some bad info about my company that makes me look really bad, and turns out to not be true at all... you better believe I'm going to sue, and thats not ambulance chasing
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yeah, but..
0
08/31, 2:09am, EDT
...unfortunately, considering labor conditions in China, it's more likely that most of this was true, and Foxconn backed down in return for Apple promising them more business, if they get their ass in gear, and drop those idiotic charges.

Essentially, Aple did the right thing AND worked within the cultural context, by letting Foxconn save face, in return for getting their act together.
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perhaps...
0
08/31, 4:17am, EDT
...but I'm guessing the last thing Apple wants is a PR bonanza & global microscope turned on suspect iPod factory labour conditions - if Apple's report inadvertantly missed 'something' it could be bad news for shareholders, corporate goodwill & pressured alternative production cost increases... As I recall Nike faced a similar dilemma at one point...
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Hmmmm...
0
08/31, 8:11am, EDT
Foxconn attorney, Skippy Xaoping was reportedly at the playground at the time of publication, and according to his mommy and daddy, would have no further comment.
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protect journalists?
0
08/31, 8:12am, EDT
Why does it appear that journalists should be entitled to greater protection than the rest of us? I wouldn't piss on the average journalist if they were on fire. Just look at what passes for journalism on the mac-obsessed c|net. Are they pursuing a noble calling, serving a greater good? Get real. When a reporter publishes a sensationally wrong story across the front page, the retraction is buried on page twenty-six! Anybody can sue anybody and it's up to the courts to decide who's right or wrong, that's what they're there for. Arbitration. Remember that many journalists are protected by the huge corporations for whom they work. When they libel an individual with few financial resources, they're happy, safe and secure. Funny how they don't like it when sued by organisations with money and power equal to their own! Now that's justice!
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What's the point?
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08/31, 8:28am, EDT
Now they've gone from suing for $3.8 million to suing for 12.5 cents? What's the point?
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Good...
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08/31, 8:37am, EDT
Good on Apple for agreeing to mediate and calming Foxconn's ire. If the reporters were indeed making false claims then Foxconn has a legitimate right to sue, but freezing of the reporters' assets, including their homes and cars is wholly unreasonable.
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re: what's the point?
0
08/31, 8:38am, EDT
Exactly. . . . the point.

They are (at least in theory) not seeking money, but rather vindication.

Note: I have no idea whether they did anything or not, or whether the suit had a foundation or not. But if you keep suing when you're asking for nominal damages, that must mean you intend to get something from it that makes it worthwhile to you, and clearly that something isn't a monetary value.

Presumably the attorney isn't doing all this work on a contingent fee basis.
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FOX CONN
0
08/31, 10:44am, EDT
Apple should find someone else for manufacturing.
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Between the lines...
0
08/31, 1:47pm, EDT


And there is your answer boys, Apple told FoxCon that unless they dropped that suit that they would find somewhere else for manufacturing; you can bet your hat on it. And, it is a good thing they did too. If the media went into war mode with this story and Apple continued to do business with FoxCon, there would have been no end to the stink on it for Apple. Apple would have appeared to be condoning the seizure of people's homes in a process where corrupt business and government work together to suppress bad publicity. Not good, not good at all.

By the way Feathers, your observation about the state of journalism (and journalists) is right on, but they still provide a valuable service to society (by exposing exactly such abuses as covered in this situation). It is imperative that they be given as much protection and free reign as possible--whether it is in China with the China Business News reporting on corruption in corporate labor policies, or in the U.S. with the New York Times reporting on corruption in national defense policy.
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