Class Action Suit Against Apple, AT&T Moves Forward

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A lawsuit in California that alleges Apple and AT&T’s exclusive iPhone carrier deal constitues a monopoly and unfairly ties customers to a single cell service provider is moving forward as a class action case.

The plaintiffs in the case, which now includes everyone that purchased an iPhone along with an AT&T service contract, claim that AT&T and Apple misled them by stating they were told they could terminate their contracts at any time and switch to another cell service carrier. The deception, they claim, is that they really couldn’t switch carriers since the iPhone is locked only to AT&T.

 “Plaintiffs allege that although they were required to purchase a two-year service agreement with AT&T when they purchased their iPhones, Apple and AT&T had secretly agreed to technologically restrict voice and data service in the aftermarket for continued voice and data services for five years, i.e., after Plaintiffs’ initial two-year service period expired,” the lawsuit stated. 

The case also claimed “Apple monopolized the aftermarket for third party software applications for the iPhone, and that Apple caused the iPhone to become unusable if it detected that a customer had ‘unlocked’ their iPhone for use with other service providers.”

The plaintiffs are seeking injunctive relief and damages in the case.

Apple and AT&T have not commented on the pending litigation.

[Thanks to Wired for the heads up.]

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The possible: the extension of the contract with AT&T beyond 2 years is problematic.

The reality: Nobody else would sign a contract with Apple. Verizon passed on the iPhone.

Dean Lewis

I don’t remember the deal being secret. I’ve known it was at least a five year exclusive deal for, hmmm, about 5 years now. Plaintiffs may not have been informed directly, but the information was out there.


Devil’s advocate time:
Might Apple be secretly hoping they lose? If the exclusivity part of the contract were set aside then they would be able to sell through other service providers without waiting another year or more. This isn’t 5 years ago. Verizon, MCI, T-Mobile, Sprint everyone would jump at the chance to sell the iPhone.

All that said I don’t see how Apple could lose. The information was out there from day one. In addition the iPhone is one of many SmartPhones so there is no monopoly.

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