Antitrust case Against Apple, AT&T To Proceed

October 5th, 2008 at 3:00 PM - Reports by John Martellaro

Back in October, 2007, Timothy Smith filed an antitrust lawsuit against Apple and AT&T. On October, 1, the Northern District of California rejected Apple and AT&Tis;request for dismissal.

The fact that the judge rejected the requests for dismissal has little bearing on the merits of the case, an attorney who follows Apple lawsuits, bust wishes to remain anonymous, told TMO. A dismissal is usually only granted in the most obvious cases of judicial abuse, but in this case, the judge, James Ware, United States District Judge has elected to proceed with discovery and trial.

In the introduction to the order, judge Ware wrote:

"Plaintiffs allege that consumers were offered iPhones only if they signed a two-year service agreement with AT&T Mobility. Plaintiffs allege, however, that unknown to consumers, the companies had agreed to technologically restrict voice and data service in the aftermarket for continued voice and data services, i.e., after the initial two-year service period expired. The question before the Court is whether if these allegations are true, the Complaint states a claim for a violation of the federal antitrust laws and other consumer protection laws."

The plaintiffs brought the following charges against Apple and AT&T.

Judge Ware discussed the claims of the plaintiff, defenses, and applicable law, and reached the following conclusion, with some motions granted and most others denied.

In Mr. Smithis original lawsuit, he claimed that an exemption to the federal Digital Millennium Copyright Act of 1998 granted last year by the Library of Congress allows for phone unlocking. Some users who did unlock their phones found them subsequently bricked by an Apple Update. Observers have differed on whether the Library of Congress exemption applies if the user (perhaps unwittingly) agrees to certain wording in the iPhone terms of use.