Starbucks Monopoly Gets Sued

You can’t keep on suing the little guy before he sues back: Starbucks has been nailed with a huge class-action anti-monopoly suit by small, independent coffee shop Belvi Coffee.

The suit claims that Starbucks actually controls a whopping 73% of the American coffeeshop market. They then qualify that with “at least.” I find that pretty damn hard to swallow, but Starbucks’ retort is so oddly semantic that it lends the claim veracity: they claim they only have 8% market share in all coffee consumed in the States. See what they did there?

The suit claims that Starbucks leases prime commercial real estate at above market prices in order to get the exclusive right to sell espresso drinks or specialty coffee in those locations. It also claims that, when Starbucks opened in Belvi’s area, Starbuck employees loitered outside the building to hand out free Starbucks drinks to passers-by.

Starbucks has left a bad taste in our mouth ever since they tried to put DoubleShot Coffee out of business for copyright infringement. A big thumbs-up for this lawsuit.

Starbucks sued for squashing competitors [Reuters]

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  1. Ookseer says:

    Just to pick nits early in the morning: It’s perfectly legal to be a monopoly in the US. It’s abusing the power that a monopoly has that (can be) illegal.

    “Starbucks sued for squashing competitors” is the headline. Isn’t that was a good business is supposed to do? I’m sure that’s what the stockholders hope for.

  2. Paul D says:

    I’d be interested to know how a company that has a monopoly can reasonably be expected to NOT abuse that power.

    I remember back in the day, hearing about how great Starbucks was as a company. “Oh, female CEO” “Decent wages!” Yadda yadda.

    Seems to me they’re squandering all that good will with this crap.

    The coffee’s not even that good.

  3. xboxishuge says:

    The title of this post got me all excited for a game of Starbucks-opoly, which might be the most boring of all the -opolies.

    Angry Cup nicely dashed that hope, though.

  4. AppTechie says:

    Zadaz:

    Sorry bud, you are wrong. Monopolies are illegal in the US. The US just puts up with the monopolies that are based in other countries because nothing can be done about it.

  5. adamondi says:

    What?!? Starbucks pays a premium for prime real estate? They hand out free samples when opening a new location? HOW DARE THEY EMPLOY COMMON, EFFECTIVE, INTELLIGENT BUSINESS PRACTICES?

    Any company would employ these same tactics if they had the resources to do so. Firebombing competitors’ locations = bad. Leasing prime space and handing out free samples = good. Sounds like someone needs to quit whining.

  6. yeah the small local coffeshops can easily have a loyal following by just having a more cozy, funky atmosphere, hosting local bands and having cheaper prices. Staying open later is also a plus, especially in a college town.

  7. Spiny Norman says:

    Have you tasted Starbuck’s coffee lately? In my personal opinion they over-roast the coffee and keep it savagely hot to guarantee that bitter taste. A free sample would send me rocketting for my nearest Coffee Bean & Tea Leaf. It’s not a crime to overpay for prime real estate. It’s a crime to claim that fuel costs are killing them and raise the price.

  8. AcidReign says:

    …..I have a decade-old Black and Decker space saver coffee machine that makes better coffee than Starbucks. And all our local grocery stores carry New Orleans blend Community Coffee. Great stuff. It’s like Cafe DuMonde sans beignets! And the Mother-in-law occasionally gifts me with bags of Godiva Creme-brulee coffee, which is a nice treat. Who needs Starbucks?

  9. nogod says:

    Controlling 73% of the market is a monopoly only if you aren’t the company controlling 73% of the market.

    For the rest of the world it is certainly not a monopoly.

    If Starbucks, who has a large share of the market, whined about a competitor attempting to drum up business near a Starbucks, people would think they were nuts.

    I hope Belvi coffee gets successful and then has to deal with all of the leeches trying to destroy them with stupid lawsuits.

  10. Paul says:

    Apptechie, I suggest that in the future, before you decide to correct someone on a point of fact, you shoul, you know, look up that fact yourself.

    Google helps. For instance, try searching for “monopolies illegal,” without the quotes, even, and the first link I got was the Federal Trade Commision:

    While it is not illegal to have a monopoly position in a market, the antitrust laws make it unlawful to maintain or attempt to create a monopoly through tactics that either unreasonably exclude firms from the market or significantly impair their ability to compete.

    Which is exactly what Zadaz said. So, uh, to quote you:

    Sorry bud, you are wrong.