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Apple Sued By Two iPhone Users Stuck With AT&T Contracts

October 22, 2012
Image Credit: Photos.com

Michael Harper for redOrbit.com — Your Universe Online

Remember all those years ago when Apple had an exclusive deal with AT&T? So do Zach Ward and Thomas Buchard, and they´re still upset about it.

The pair is suing Apple for using software locks to tie their iPhones to AT&T rather than allow them to be freely used on any network. Should they win, Buchard and Ward will ask for monetary damages, a restraining order preventing Apple from locking their phones to specific carriers, and to have their 3-year old iPhones unlocked, already.

According to the lawsuit, Apple violated the Sherman Act´s prohibition on monopolization when they failed to get consumers´ contractual consent to be locked to AT&T. Apple´s iPhone software kept these consumers on AT&T, (legally, at least) an act which Buchard and Ward say violates the Digital Millennium Copyright Act. This act, say the pair, includes an exception which allows users to modify their handsets to work on whichever network they please.

“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,” say the plaintiffs in their court papers.

Not being able to unlock an iPhone is an old complaint.

When the iPhone was first released in 2007, only AT&T customers could (legally) partake in the Apple goodness. Of course, there existed ways to get around the software, unlock the phone and throw in a T-Mobile SIM card. Then, in January of last year, Apple unveiled a Verizon iPhone 4, signaling an early end to their 5-year exclusivity agreement with AT&T. Several months later, the iPhone 4S arrived for AT&T, Sprint and Verizon.

Even though new iPhones had been released for other carriers (the Verizon and Sprint iPhone 4S is a world phone, capable of running on GSM networks), AT&T had refused to offer unlock codes except in very special cases. In June 2011, just months after the Verizon iPhone 4 had been released, Apple had already begun selling unlocked phones off contract, albeit at a steep premium: $650 for a 16 GB and $750 for 32 GB. This past April, AT&T reversed their decision to keep a lock on iPhones and said it will unlock out-of-contract phones.

Verizon´s iPhone 5 also comes unlocked out of the box, able to be used on any network free of contract.

According to the court documents, Buchard and Ward purchased their iPhones in 2009, but were quite upset to find out later that their GSM-only iPhone could not be used on other networks. The two believe Apple should have shared the details of their 5-year exclusivity plan with AT&T with customers, informing them of their tie to Big Blue before signing any contract.

What´s not described in the court documents, however, is if Buchard and Ward would have purchased the iPhones regardless of this contractual blockade.

While it may appear as if these two are simply striking out against the richer party, CNET explains that a 2011 Supreme Court ruling has banned consumers from filing class action lawsuits against wireless carriers, meaning the two will just have to take their aggression out on Apple instead.


Source: Michael Harper for redOrbit.com – Your Universe Online



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