iLounge

Apple + AT&T’s iPhone Antitrust Class Action Smackdown

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Friday, October 3, 2008
Category: Backstage

If I wasn’t busy working on other things at the moment, I would write more about this:

Apple + AT&T Lose Early Attempt to Fight Antitrust Class Action Lawsuit.

I’ve read through it. Apple and AT&T haven’t lost the case yet, but the language of the court’s decision is pretty brutal. A few of the findings:

(1) AT&T can’t force plaintiffs to submit to arbitration rather than a full trial, because the AT&T service contract requiring arbitration was unconscionable under California, New York, and Washington State law.

(2) Plaintiffs can proceed against Apple under antitrust law regarding voice and data services for restricting users’ ability to use their iPhones on competing networks.

(3) Plaintiffs can proceed against Apple under antitrust law regarding iPhone applications, for restricting users’ ability to use unapproved third-party iPhone applications.

(4) Plaintiffs can proceed against Apple under the common law, as well as the Computer Fraud Abuse Act and the California Penal Code, for damaging unlocked iPhones with version 1.1.1 software.

Say what you want to say about lawyers, but the way this case is settled has the potential to radically change the entire mobile phone industry in the United States—as well as Apple’s business practices regarding current and future iPhones. I say “settled” because this ruling radically increases the chances that Apple and AT&T will feel compelled to resolve things without letting the case go further through the trial process, and one can only hope that the plaintiffs’ attorneys don’t get so excited by the prospect of settlement dollars that they pass on achieving the larger (precedent) goals of the suit. Millions of iPhone customers have a stake in seeing Apple and AT&T act reasonably regarding contract terms, unlocking, and applications, and as this court has explained, there’s evidence that they previously haven’t.