Starbucks facing “monopoly” charges

September 27, 2006

Seems like Seattle is a great place to grow companies that come to dominate their markets–and then get viciously attacked for their success. Of course I’m talking about Microsoft and now Starbucks.

This story from the Daily Dog discusses a lawsuit filed against Starbucks from a Seattle coffee franchiser complaining about monopolistic and predatory practices.  One quick side comment about the “Dog” story. It starts with”Starbucks isn’t called the Evil Empire for no reason…” Oh come on. I thought the evil empire dates to Reagan and the USSR. Not sure who is calling Starbucks the evil empire (suspect it is competitors) but for a PR-oriented publication to offer a lead like this is, well, a little yellow. Yes, I own Starbucks stock so perhaps I have a vested interest, but this rather obvious imitation of the mainstream media’s worst corporate-bashing tactics is surprising to me in a PR-industry publication that ought to be more critical of this kind of attention-grabbing writing.

But on to the main point–the monopoly claims. I can’t comment on the specifics, but in our town located just 80 miles north of Seattle there are lots and lots of competitive coffee places and even small franchises. The one owned by my neighbor has about 10 stores. Starbucks only has a few in town. We have a strong strong anti-corporate attitude in our university town and so when Starbucks opened a store downtown a few months ago, there was a real reaction against it. I usually go to the non-Starbucks places closest to my office. But I went to one the other day and the horrible music was up so loud that the barrista behind the counter, who insistently bent over the counter working on something for about 7 minutes, could not hear us even when we tried to get his attention. We walked out. Went to the next place. One person was in line ahead. The idiotic barrista dinked around with his single drink for so long, engaging in casual conversation with him, completely ignoring me and my guest in the process that after about 10 minutes of this we walked out. We went to Starbucks. They served their usual completely consistent Americano and actually did what I asked when I said I only wanted half a cup of water in it. That doesn’t often happen in a non-Starbucks store.

Microsoft was super aggressive and no doubt engaged in business tactics it later came to regret. And it was beat about for its dominance and success and made to pay for it, just to serve as a lesson in case anyone thinks that success is what they really want. But did this change the public’s opinion of Microsoft? No. Their reputation has improved dramatically but mostly I believe because of the emergence of a new giant–Google. Claims about King Bill and Microsoft’s complete dominance are now a memory. The new target to attack is someone who doesn’t even ask you to pay for all the functionality they offer–and how is innovating for profit charities.

So, lawsuit-happy failed franchisers, stop blaming Starbucks’ success for your failures. Get out there and Google them.

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