Apple Store
Applesauce might be on the menu if Apple Inc. (Nasdaq: AAPL) doesn't take swift actions to ameliorate members of a coalition representing Iranian-Americans and speakers of Farsi who were allegedly denied sale of iPads and other merchandise by Apple store employees in recent weeks. Reuters

Reported incidents of discrimination by Apple Incorporated (Nasdaq: AAPL) employees against people of Iranian descent are increasing, raising the likelihood that what appeared to be a few cases of prejudice may turn into a legal and diplomatic scandal. Further, the company's virtual non-response to the reports exposes it to being played by Tehran, which has already become involved.

The National Iranian American Council said Tuesday it now knows of at least six cases of discrimination around the country.

In addition, Iran's state-owned English-language media outlet, Press TV, has said an Apple store in Australia cited U.S. law when denying the sale of an iPhone to an Australian citizen of Iranian descent.

The cases of U.S. discrimination have been heavily reported and many secular civil rights organizations, including the American Civil Liberties Union, have become involved on behalf of Iranian Americans.

We have received multiple reports [of discrimination by Apple store employees against Iranian-Americans], some that have not been reported, NIAC Assistant Policy Director David Elliot said Tuesday.

Cases have been reported in Atlanta, Santa Monica, Calif., and Sacramento, Calif., according to NIAC Policy Director Jamal Abdi in a New York Times editorial Thursday.

Several people say they were denied service by Apple store employees on account of speaking Farsi or disclosing that they were of Iranian descent, despite being U.S. citizens or in the country legally on visas. In the first reported case in Atlanta, Iranian-American Sahar Sabet was turned away by an employee who heard her speaking Farsi with her uncle. The employee said federal export control regulations related to the U.S. embargo on Iran prevented him from selling her an iPad.

In fact, though, there are no legal obstacles to retailers like Apple selling technology like smartphones, tablets or laptops to Iranian-Americans, Iranian citizens or anyone else. The only limitation under the embargo against Iran is that someone cannot take such items to Iran without special permission.

There is no U.S. policy or law that prohibits Apple or any other company from selling products in the United States to anybody who's intending to use the product in the United states, including somebody of Iranian descent or an Iranian citizen or any of that stuff, U.S. State Department spokeswoman Victoria Nuland said.

Individuals planning on traveling to Iran who want to take a smartphone, tablet or laptop with them can apply to the U.S. Treasury Department's Office of Foreign Assets Control. That office confirmed that there is nothing that would limit Apple's sale of products to people in the United States, even if they are Iranian. Moreover, you can take them with you [to Iran] if you get authorization from OFAC, spokesman John Sullivan said Wednesday.

Given that the U.S. embargo against Iran does not inhibit Apple selling products to Iranian Americans, Apple's apparent corporate policy against selling its merchandise to Iranian Americans is particularly odd. Apple's putting pressure on its employees to be export control officers, Elliot said.

According to Abdi, despite Apple's assurances that the company does not discriminate and even employs workers who speak Farsi to provide better customer assistance, the message on the ground seems, at the very least, muddled. One Apple employee told my organization, in an electronic message, 'a lot of employees, at least in my store, are almost forced to stereotype certain customers that come in due to the policy and fear of losing their job ... We essentially have to police what the customer is going to be doing with their products, which should be left to police rather than a sales rep.'

In fact, refusing sale of products to anyone because of their national origin or the language that they speak violates the Civil Rights Act, which made it illegal for private companies to discriminate against people on the basis of race, color, religion or national origin, according to Abdi.

Increasingly, there are signs that denying sales to people of Iranian origin is Apple corporate policy, extending to retail outlets not just in the U.S. but potentially around the world, rather than the bias incidents merely being the result of local misinterpretation of federal law.

A coalition of organizations, including the NIAC, ACLU, Council on American Islamic Relations, Iranian American Bar Association, Asian Law Caucus, Public Affairs Alliance of Iranian Americans and PARS Equality Center, have all called on Apple to issue an apology and to change its corporate policy and training of Apple store employees. To date, there has not been a public apology from Apple. Apple did not return calls for this story.

Not only does Apple's policy appear odd, it appears increasingly risky. The reports emerging from Australia about discrimination by Apple employees against Australian citizens of Iranian origin indicate a creeping involvement by the Iranian regime. Iran-controlled Press TV filed a story from Sydney claiming that Australian citizen Mahsa Javam was denied sale in an Apple store by an employee who cited the U.S. embargo on Iran in denying sale. The Press TV story includes audio of a purported Apple store employee denying sale to Javam, but there is no accompanying video and nothing said to identify the man speaking as an Apple store employee.

This is not to say that the report is necessarily a fabrication; it may, in fact, be a credible report of discrimination similar to the cases seen in the U.S. If that is the case, it would particularly troubling given that businesses in foreign countries, including Australia, are clearly not subject to U.S. law. Potentially more troubling for Apple, though, is the possibility of being used as a diplomatic and political tool by the Iranian regime and a potential rallying point against American corporations and the broader U.S. embargo.

The longer Apple goes without addressing the alleged instances of discrimination in the U.S., the greater the risk that the company will be drawn into an international debate of the embargo against Iran, a debate that could prove particularly troublesome for Apple if it does not maintain its image at home. Apple risks embarrassment in the U.S. for potential discrimination and embarrassment abroad if the company plays into the hands of the Iranian regime's media spin-cycle.

In fact, the Iranian issue may be gaining the attention of executives at the top of the foodchain at Apple. AppleInsider reported Wednesday that CEO Tim Cook made his first ever appearance at the Allen & Co. annual retreat in Sun Valley, Idaho, and notably was listed as attending a panel titled Iran vs. Israel.

Apple Incorporated (Nasdaq: AAPL) shares 1.05 percent to $598.08 in midday trading Thursday.