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GT Advanced prepares to air Apple's dirty laundry

GT Advanced prepares to air Apple's dirty laundry

October 13, 2014

Court filings made by GT Advanced Technologies have revealed that Apple imposes steep fines on suppliers for leaking information about an upcoming, unannounced product. In the case of GT Advanced, the fine imposed is $50 million “per occurrence,” according to the Financial Times (via AppleInsider).

The disclosure comes as GT begins Chapter 11 bankruptcy proceedings, which were first announced last week.

The sapphire crystal supplier has asked the court for permission to disclose the details of its agreement with Apple in the interest of creditors, equity holders, and other stakeholders. The company contends that this will ensure “an open, transparent and fair process.”

Previously, GT asked a New Hampshire judge to keep key documents relating to a “third-party” under seal, so that the company can avoid paying damages under confidentiality agreements. At the time, the company didn’t identify the third-party, though most assumed that it was Apple.

GT is Cupertino’s primary supplier of sapphire crystal, which is found in the Touch ID and camera cover on the iPhone 5s, iPhone 6, and iPhone 6 Plus. The material will also be used on Apple’s upcoming wearable device; both the Apple Watch and Apple Watch Edition models.

On Wednesday, Apple reacted to GT’s decision to file for bankruptcy by stating “We are focused on preserving jobs in Arizona following GT’s surprising decision and we will continue to work with state and local officials as we consider our next steps.” Soon after, GT announced that it plans on shutting down its plants in Arizona and Massachusetts. The closures will cost 890 jobs.

It will be interesting to see where this story goes from here. My bet is that it is going to get very interesting.

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