T-Mobile Sues Starbucks over Free Wi-Fi

Although T-Mobile will soon bow out as Starbucks' Wi-Fi provider, it claims that in the meantime, the coffee house is giving away its service for free without compensation.

Loyal Starbucks customers may have been delighted to hear that the coffee chain was switching from T-Mobile to AT&T for its Wi-Fi service – and that they would be getting two free hours of Wi-Fi a day as a result – but T-Mobile was understandably not nearly as pleased with the arrangement. In fact, the company has filed suit against Starbucks over the free Wi-Fi deal, alleging it violates existing contracts.

The specifics of the suit stem from the nitty gritty details of the contract that Starbucks entered into when it began transitioning in-store Wi-Fi service from T-Mobile to AT&T. In a copy of the lawsuit posted by Gigaom, T-Mobile claims that the papers give it exclusive rights to peddle Wi-Fi in all Starbucks locations until they transition to AT&T, and at the moment, only two stores, one in Bakersfield Calif. and one in San Antonio, Texas, have actually transitioned fully to AT&T’s equipment. The remaining stores, it alleges, are basically giving away its service for free and without permission.

“Since T-mobile provides the resources and equipment to support Wi-Fi service in non-transitioned stores, it is T-Mobile alone that is bearing the cost and burden associated with this “free” Wi-Fi offer,” T-Mobile writes in the lawsuit. The company is seeking an immediate injunction to prevent the Starbucks deal from continuing, as well as compensatory damages.

Starbucks has yet to publicly comment on the suit, and despite AT&T’s involvement in the free Wi-Fi promotion, its contractual relation to T-Mobile has kept it free and clear of the lawsuit.