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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
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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.

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Comments

1

i really dont understand any of this…

Posted by TED M. LEBLOND on October 3, 2008 at 8:27 PM (PDT)

2

well verizon et al are equally screwed cause they all have their ‘iphone’ as well and if Apple loses, every one of those folks will have to give up their exclusive deals as well. cause they are doing just what apple and att have going on. as for the whole damage claim, what a pile of bunk. I really doubt they can prove that apple set out to f-up all the unlocked phones. there’s like 100 different ways to unlock an iphone, how could apple be expected to figure out and deal with all of them. and given all the folks I’ve run into that put apps from unapproved companies on their phones only to have the phone hosed by a bad program, owners should be thanking apple for a little oversight on apps.

and next time, folks should remember that no one is making them buy an iphone and just skip it rather than buying it, screwing it up and then screaming foul cause they can’t get their money back. bet these folks buy CDs and DVDs, open them, rip them and then try to return them for a refund too

Posted by lucas on October 5, 2008 at 4:34 PM (PDT)

3

It is the 9th circuit, correct?  You had to have known the liberal collection of judges in the 9th circuit doesn’t bode well for this case.  AT&T;definitely wasn’t going to win their motion for arbitration. 
In the end, I don’t think the anti-trust claims will hold water.  There are plenty of choices out there.  The market share is such that you don’t have to buy Apple.  And Apple did shop around for a partner before AT&T;.  Locking the phone down is something that Verizon and others have done for the better part of a decade.  Why is Apple suddenly at fault?  It’s a support issue.  Apple and AT&T;do not want to try and troubleshoot a wide open iPhone with dozens of home-brew applications.

Posted by Dick Fer on October 5, 2008 at 5:19 PM (PDT)

4

Uh….what competing network? AT&T;‘s 3G network is incompatible with other carriers networks an vice versa. Perhaps I should sue the manufacturer of my car because it won’t run on diesel?

Posted by Rand on October 28, 2008 at 10:15 AM (PDT)

5

Regarding class action law suits, is it legal for AT&T to not allow wireless customers with AT&T to not do early upgrades to the iphone? It seems that new customers can pick up an iphone for $200 while customers with contracts would need to pay at least $300 - 400. Customers with cellphone contracts are also not permitted to buy refurbished phones.

Isn’t this a monoply? Is there any recourse? Thank you for your help.

Posted by Maureen Fullam on January 2, 2010 at 11:27 AM (PDT)

6

Apple and AT&T continue with their monopoly.  It seems that there might be criminal implications here as well.  The greed and stupidity is astounding.

Posted by Kelley Lynch on November 14, 2010 at 2:28 PM (PDT)

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