iPhone Class Action Suits Hit Apple, AT&T

By Geoff Duncan October 11, 2007

iPhone Class Action Suits Hit Apple, AT&T

It was bound to happen sooner or later—well, we take that back: it was bound to happen sooner than later. Irate consumers are filing class action lawsuits against both Apple and AT&T, alleging the companies are engaging in unlawful business practices and illegal monopolistic behavior, The complaints center on service restrictions on the Apple iPhone which bind it to the AT&T wireless network, and Apple’s recent iPhone software update which locked out third party applications and “bricked”—rendered inoperable—some number of “hacked” iPhones.

The two separate lawsuits were filed in San Jose, one in federal court and one in state court. Both are seeking class-action status. The federal case was filed by two law firms (one in Oakland, one in New York) on behalf of iPhone owners Paul Holman and Lucy Rivello, while the state case was filed on behalf of California resident Timothy Smith.

The federal case alleges that Apple and AT&T unlawfully conspired to prevent customers from using programs or services on the iPhone other than those specifically permitted by the two companies before the iPhone was released. One the iPhone was on the streets and unlocking solutions emerged, the suit alleges the companies then took additional stops to render inoperable phones which had been unlocked from the AT&T network, or which had third party applications installed. The suit cites Apple’s September 24 warning to iPhone users, and claims the iPhone 1.1.1 update was designed “solely” to enforce Apple’s illegal policies. All told, the suit includes six formal charges, including illegally stifling competition from third-party developers, charging a service cancellation fee o a non-subsidized phone, and making false claims that using a third-party unlocking solution would void the iPhone’s warranty, and seeks damages in the range of $200 to $600 million for each count. The suit asserts “millions” of iPhone users will be impacted by Apple’s actions.

The state case filed on behalf of Timothy Smith claims Apple is violating California’s Cartwright Act by binding the iPhone to AT&T’s network doesn’t specify a monetary damage claim, but does seek an injunction which would prevent Apple from selling software-locked iPhones, and would force the company to honor warranties on unlocked iPhones.

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