Apple fines suppliers millions for leaking product secrets

If suppliers leak confidential information about Apple products, they can face a hefty fine. This is evident from documents provided to the American court by the bankrupt GT Advanced Technologies.

GT Advanced Technologies, GTAT for short, had an agreement with Apple to manufacture sapphire components. However, the company ran into financial distress and GTAT has submitted several documents to the US court in the bankruptcy case, The Financial Times reports. It states, among other things, that GTAT would receive a hefty fine if it leaked Apple trade secrets. It would be 50 million dollars, converted almost 40 million euros, per event. In recent years, leaking information about unannounced Apple products has become commonplace.

Little is known about the agreements that Apple makes with its suppliers. GTAT’s lawyers now believe that more information about the mutual agreements should be made public. That would be in the interest of both creditors and shareholders.

In November 2013, Apple announced that it was lending $578 million to GTAT. The company was able to use that money to build a factory in Arizona, in which sapphire parts could be produced. The two companies signed a five-year contract with each other at the time. A year later, however, that agreement is under heavy fire. GTAT’s stock price fell significantly when it was announced that Apple would not use sapphire glass for the new iPhones. The company is said to have been devalued by $1.5 billion.

GTAT points the finger at Apple. The mutual agreement would be oppressive and burdensome. Shareholders are also outraged and are filing lawsuits against the GTAT. The producer hopes to take advantage of its bankruptcy case by highlighting the negative side of Apple’s collaboration agreements.

The judge has agreed with GTAT’s request, which means that more news will probably come out in the coming period about the agreements that Apple makes with its suppliers.