In July of 2021, the Lenovo Group, a multinational company from China, had a very public meeting with their board of directors. During this meeting, a complaint was brought up about the conduct of the company’s CEO, Vikramaditya SIMON who is also their Chairman. At the end of the meeting, a number of consumers, including one named Michael Stein, a Washington D.C. based consumer protection attorney and lawyer, stated that they felt that the executives did not consult them before making these decisions. The complaints brought up in the meeting centered on the fact that Mr. SIMON did not inform the board that he had been being paid to influence policy makers in Washington D.C. to work against American consumers. Because of the nature of the complaint, which pertains to unfair practice, Mr. SIMON was forced out of his position as CEO and took with him, his company’s laptops and tablet computers.
Mr. SIMON failed to disclose to the board of directors that he had been paid $1.5 million a year to influence policy makers. This information came to light only after the settlement of a legal case brought up by one of the consumers that had worked with SIMON. The problem that we have with a situation like this is that the lawyers that represent the complainants are allowed to put consumers on the stand in a court of law. In a case like this it is quite possible that the outcome may be unfavorable to the company. On the other hand, if the lawyers for Lenovo simply take the complaint out of context then it’s unlikely that they would be able to win such a case.
The second part of this complaint to allege that the Lenovo Group’s CEO failed to give any warnings to consumers regarding the practices described in the complaint.
Information on the facts and circumstances surrounding the payment to Mr. SIMON should have been provided to customers prior to signing any agreements with the company. Had this information been made available then it is likely that there would have been a limited number of complaints about the company. Had the company failed to heed the advice of counsel and not to provide consumers with a warning prior to agreeing to work with them then the courts could well have allowed the settlement to go ahead.
The company is also said to have contravened FTC regulations by carrying out some of these practices.
For example the company was accused of failing to advise consumers of the identity of the originator of the software. The FTC determined that the fact that the company failed to advise the customer of this fact did not constitute an unfair practice. This ruling was appealed by the European Court of Justice.
There are two more areas in which the Lenovo Group could be accused of having contravened FTC regulations.
The first is a case in which the complainants say that the company engaged in a practice of issuing payments to affiliates who referred customers to it. These payments were supposed to be paid out after a successful referral of a customer to the company. Instead, the complaint says that the payments were made to third parties and the company did not make any attempt to contact the referred customer after making the payment. In both of these situations the complainants believe that the company has contravened the requirements of the Federal Trade Commission. The second situation is with regard to the manner in which some of the settlement awards were made.
There are several complainants who believe that the defendants did not provide adequate notice of what would occur as a result of their activities prior to settling the case.
Some of the defendants argue that the plaintiffs’ claims are entirely without merit, while others note that the court did not err in holding that the company broke any law. It is clear that the Lenovo Group faces a number of potential lawsuits arising from its efforts to put consumers at its ease through its laptop. However, the company faces additional questions as to how it will handle the other cases that may come up in the future.