Monday 22 October 2012
Apple sued over deal locking iPhone to AT&T network
Posted on 02:37 by Maria Scott
A pair of
iPhone owners are suing Apple to get their handsets unlocked.
Zach Ward and Thomas Buchar filed a putative class action lawsuit in
U.S. District Court in Northern California on Friday alleging that the
tech giant violated antitrust laws by locking iPhone buyers into voice
and data contracts with AT&T Mobility. The plaintiffs claim that
Apple violated the Sherman Act's prohibition on monopolization by not
obtaining consumers' contractual consent to have their iPhones locked
when the tech giant entered into a five-year exclusivity agreement with
the wireless carrier in 2007.
To enforce the terms of its agreement, Apple installed software locks on
the iPhone that prevented buyers from taking their devices to a
competing wireless carrier, the lawsuit claims. That activity violates
the Digital Millennium Copyright Act, which includes an exception that
allows handset owners to modify their phones for use on the wireless
network of their choice, the plaintiffs said.
"Through these actions, Apple has unlawfully stifled competition,
reduced output and consumer choice, and artificially increased prices in
the aftermarkets for iPhone voice and data services," plaintiffs said
in their lawsuit (see below).
In addition to monetary damages, the lawsuit seeks an order restraining
Apple from programming iPhones in such a way that would prevent
consumers from unlocking their SIM cards. The plaintiffs also want Apple
to provide SIM unlock codes to iPhone owners on request, as well as an
order preventing Apple from selling iPhones without adequately
disclosing that the handsets are locked and obtaining consumers'
contractual consent for that arrangement.
Consumer frustration over handset software locks installed by wireless
operators is nothing new, but previous lawsuits against wireless
carriers over the issue have failed thanks to a U.S. Supreme Court
ruling in 2011 that found consumers no longer have the right to file
class action lawsuits against wireless carriers. In AT&T vs. Concepcion (PDF),
the court ruled that a clause in the carrier's customer contract
limiting consumers to arbitration instead of class action met the basic
standards of fairness.
However, this lawsuit takes a different tack, pursuing the handset maker
rather than the wireless carrier. Whether Apple has a similar clause in
its customer contract wasn't immediately clear.
CNET has contacted Apple for comment and will update this report when we learn more.
Source: http://news.cnet.com/8301-13579_3-57536889-37/apple-sued-over-deal-locking-iphone-to-at-t-network/
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