Class-Action Lawsuits Filed Against Apple, AT&T Over iPhone

A class-action lawsuit was filed on October 5th against the unholy duo of Apple and AT&T, charging that they intentionally broke unlocked headsets via the last firmware update, and conspired illegally to monopolize parts of the mobile phone market by preventing consumers from using any services other than those provided by the two companies. The suit charges the two companies, either jointly or separately, with six formal counts, including “alleged violations of the California Business and Profession’s Code, The Cartwright Act, The Sherman Act, The Federal Trade Commission Act, The Communications Act of 1934, and The Telecommunications Act of 1996, as well as rules and policies established by the FCC.”

The particular issue is the nefarious 1.1.1 upgrade, which the lawsuit claims was designed solely to disable hacks and SIM cards that had been unlocked, and to damage phones with unapproved software installed, rather than to fix or improve any flaws in the device.

This is the second class-action lawsuit against Apple over the iPhone. The other one, which was also filed last Friday, claims that unlocking mobile phones is entirely legal based on existing law, and asks for an injunction against Apple to prevent any software locks on future iPhone sales.

“Class-action charges Apple, AT&T with unlawful business practices” [AppleInsider]
(Photos: moria and moria)

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  1. Anonymous says:

    bout time

  2. liquisoft says:

    My understanding is that we all signed a contract from the get-go. One that really wasn’t that unreasonable. I mean, we all knew the device did not support 3rd-party applications when we bought it.

  3. ElizabethD says:

    The Rebel Alliance is taking on the Evil Empire. Thank the Maker!

  4. mandarin says:

    Good luck with allll that…. maybe you can sue Danger for having their Sidekick locked too…

  5. Aladdyn says:

    @liquisoft:
    I’m not sure what the contract said but not supporting 3rd party software is different than intentionally disabling phones that have 3rd party software installed on them.

  6. Anonymous says:

    hmmm. it seems that in order for all this to take about so quickly from its release, these aren’t average joes they have upset, they are fanboys! wouldn’t you want to please those customers who ran right out to the store to buy one in the first quarter? those are the die hards. everyone else like me either doesn’t want one or is waiting another year first to see what happens.

    i hope sprint eventually has something that you can watch youtube vids on or has “real” internet.

  7. DanKelley98 says:

    May the lawsuit succeed and be a case for unlocking phones throughout the industry. Long overdue!

  8. SoCalGNX says:

    Ford parts do not fit on Chevy’s. The parts for a Samsung tv do not have to work with a Panasonic. Can’t see this going anywhere.

  9. Anonymous says:

    to me its that they actually have the cajones to make thousands of iphones completely inoperable. do they expect consumers to just buy another one? how does that work if your phone is bricked? i’m sure at&t doesn’t care if your phone works or not, they still want their money.

  10. ribex says:

    That’s *hand*sets, not *head*sets.

  11. GearheadGeek says:

    @SoCalGNX: Not that I think the suits will necessarily “go anywhere”, but a more valid analogy would be “Fords and Chevys can drive on all public roads” or “Fords and Chevys can use any brand of fuel that meets the octane and detergent requirements for their engine.” The Apple/AT&T case is more like “Fords can only be driven on US/Federal highways and we’ve put software in them to keep you from driving them on state highways.”

  12. jdmba says:

    If this suit works out, then every Verizon subscriber should sue. Verizon cripples 100% of their phones so that you are forced to use GetItNow(tm) for anything and everything.

  13. EvilSquirrel says:

    @SoCalGNX: Using a car analogy, an iPhone should work with any GSM cellular phone network like I could put any brand of oil, air filter, or brake pads on my car. Locking out the iPhone from networks other than AT&T would be like Ford making a car that will not run if I put Pennzoil in it instead of Ford’s Motorcraft oil. At least that is what the lawsuit is arguing.

  14. Mojosan says:

    It’s a nonsence lawsuit designed to make money for the lawyers.

    It is not Apple’s responsibility to make sure that 3rd party software functions with its phone.

  15. Syrenia says:

    @INconsumer: Did thousands of phones really become inoperable? From what I read, all updated phones lost their third-party apps. But that isn’t inoperable, just disappointing.

    Among the network-unlocked phones, the results among those people who installed the patch seemed to fall into two categories. Some phones could be revived by reverting to the original SIM, admittedly on the AT&T network. Others became, well, bricks.

    I would love to see the numbers for how many phones were unlocked from AT&T, how many of those were actually updated, and how many of those were rendered permanently unusable.

    Next up: the battery. I can’t wait for that shoe to drop.

  16. darkclawsofchaos says:

    if I remember correctly, Captain Nembla got force choked, the fat guy got his jet blown up, and luke lost one of his hands to daddy who lost his hands from a sith, so taking on Apple and AT&T is crazy

  17. Rob says:

    Here’s how I see it, the OS is made by Apple (Lets call them the manufacture). Now you think the engine is too slow or is not doing something you want it to so you get a third party part (Not supported or endorsed by the manufacture) and have it installed by some random guys. Now the manufacture says “Hey we noticed X problem so we implemented X fix, come in and get it done, but be careful using third party parts might cause issues” so then you take it in anyway and have them check upgrade/fix it and then your shotty third party part breaks the whole engine.

    Who’s fault is that? Should the manufacture have to pay to fix this when they warned you and you were the one who got the third party part?

    (The above was only in reference to the Third party Aps)

    Now I’m all for unlocking the iPhone to any network. :)

  18. Mr. Gunn says:

    Well, we knew that it couldn’t be unlocked by simply entering a code from the keypad like every other phone on the market today, and we knew Apple tends to lock its devices down, so it’s understandable to me.

    I can’t imagine what grounds anyone has to sue, other than public embarrassment.

  19. lestat730 says:

    This should be an interesting case to follow. Not that I plan on ever getting an iPhone but I still think it’s messed up that Apple bricked all the phones with the update and then tells customers that the device is permanently destroyed and that they can’t be fixed. Yes I understand that an agreement was accepted before you use the device in reference to not using 3rd party software to unlock the phone. But still, it would be nice if they offered to reinstall the software and give you back a locked phone with the option to use it the way they say you should. I find it very hard to believe that the unlocking program causes hardware damage to the device. Hopefully the talented hackers out there will come to rescue everyone who was hit with this and release a method of flashing the phone with the original software.

    Also I’m curious, did we ever find out how much AT&T paid Apple for the exclusive right to carry service for the phone? It must have been a hell of a lot to convince apple to agree to it and give up international sales as well as domestic sales in areas where AT&T gets poor coverage. I know I have a couple of friends that would have been interested if Verizon wasn’t the only service provider able to give a good signal in my area.

  20. xanax25mg says:

    I think it’s a ludicrious lawsuit. Another analogy would be if you buy a lamp that clearly states it only works with Widget brand lightbulbs, but you want to use Walmart brand since they cost %30 less and as a result your lamp stops working entirely. Would you then argue that the lamp company has an obligation to make their lamp work with every lightbulb on the market?

    I also don’t buy the monopoly argument. There are hundreds of cell phone models and at least a half dozen major cellular providers (dozens if you count local providers like Revol in the midwest). You’re making the choice to get an IPhone, in the face of the fact there are countless alternatives to cell phones and cell phone providers. Hell there are at least a half dozen phones that mimic most of the overarching features of the IPhone(web browsing, music player, videos, etc).

    If we expect companies to honor contracts to consumers, then consumers need to stop whining when they of free will enter into contracts that lock you into specific provisions

  21. mechanismatic says:

    @Mojosan: You’re right. They shouldn’t be responsible for making sure that 3rd party apps work with their product. But that’s not the issue. The issue is that they have made efforts to make sure that 3rd party apps specifically do not work with their phone. The first case requires no special effort as it is the responsibility of the 3rd parties to get their apps to work with the phone. The second case is Apple going out of its way to keep potential competition from competing. It would be comparable to making it so that you couldn’t play music on an iPod that you didn’t download from iTunes. Such things should be the customer’s decision, not the manufacturers. Sony DVD players will (usually) play DVDs by other manufacturers.

    @darkclawsofchaos: Actually Anakin Skywalker lost only one arm to a Sith. Then he lost both the artificial arm and the natural one that was left (plus his legs) to a Jedi Master. Taking on Apple and AT&T may be crazy but so is attacking a space station with snubfighters and look how that turned out.

  22. IANAL, but it seems to me the the issue is whether or not Apple deliberately engineered the upgrade to cause hacked and unlocked phones to stop working. If so, that seems above and beyond any normal upgrade. For example, I just upgraded my Wii’s software tonight, and got a warning screen that said basically “if you’ve modified your Wii this update might damage it”–typical stuff. The charge against Apple, on the other hand, is that the upgrade was intended to damage or render inoperable any “rogue” phones.

    As that Slate article argued earlier this week, if you bought your iPhone and didn’t activate the AT&T service agreement, you should legally be able to do what you want with it. (Maybe even if you did accept the agreement, but I don’t know.)

    I think, then, that they’ll have to prove that Apple deliberately tried to break phones that weren’t being used the way Apple and AT&T wanted, and then prove that by doing so, they interfered with consumers’ rights to unlock their phones (which the U.S. Copyright Office ruled was legal).

  23. Oh, for those of you making Star Wars comments, please note, regarding the accompanying photo, that I totally pulled a George Lucas and digitally inserted those orange rebel pilots into the parade. (Click the Flickr credits under the article to see the originals.) As I was doing it, I pretended the original photo was taken in 1977 and the orange guys were entirely CGI.

    So there ya go, my little meta-joke about Star Wars.

  24. BigNutty says:

    Instead of trying to figure out how to make the most money on a deal like this, why don’t companies think ahead and put themselves in the consumers shoes?

    I agree with xanax25mg above that nobody put a gun to the heads of the people that bought iPhones and signed a contract with AT&T to provide service.

    I just think a company should anticipate what the public reaction will be when they make the design of a new product, (can’t change the iPhone battery) or the way they market the product, (Apple & AT&T only -no outsiders please).

    The companies better start getting smart because the consumers are starting to get even smarter.

  25. speedwell (propagandist and secular snarkist) says:

    @Aladdyn: Exactly. I support a corporate database that is designed for Internet Explorer, but that happens to run perfectly well on Firefox. I don’t support the Firefox implementation, so I tell users they are on their own with it and to keep IE handy just in case… but I don’t have a company mandate to keep track of who uses which browser, to go to their locations with a sledgehammer, and to smash their hardware. Indeed.

  26. MeOhMy says:

    It’s sad that Apple, a company that once espoused innovation and a “little guy” mentality has fallen so far into the typical corporate nonsense. Class acton lawsuits are a farce these days, but the I agree with them in spirit. Hey manufacturers of widgets (I’m talking to you Apple and you TomTom): User-generated Content allows users to extend the functionality of your product at no cost to you, you morons!

  27. Greeper says:

    In the past 3 years Ive bought 2 IMACs, a powerbook, and over 10 Ipods (for gifts and because they keep breaking and getting stolen). THe way they act when I take stuff in (I have to make an appointment with a “genius” to have them replace their shitty ipod that breaks every other day, coupled with the way they’ve crippled the iphone made me say enough is enough. THe day finally came when Microsoft didn’t seem so bad after all.

  28. royal72 says:

    congratulations steve jobs, you’ve turned apple from a “think different” company, into to new micro$oft.

  29. infinitysnake says:

    @SoCalGNX: OTOH, it would certainly wrong for Chevy to disable your car for using aftermarket parts, wouldn’t it?

  30. xanax25mg says:

    @infinitysnake: there’s a big difference. You presumably didn’t sign a contract with Chevy to ONLY use Chevy parts. IPhone folks were aware when they bought it AND before they installed the firmware update they were notified the phone could be rendered useless if it had been cracked. IPhone users had opportunites to A– Not buy an Iphone or B– not install the update if they had cracked it and installed 3rd party apps, both blatantly in violation of the contract.

  31. adrianna.jackson says:

    Justice Stephen G. Breyer wrote that allowing to ‘require arbitration’ in order to ‘block’ class-action suits gives that business the ability to “insulate itself”…really… really what about me the consumer?! So the consumer has no rights, I thought court served the ‘people’ not big business! I pay their monumental pay checks with my taxes, I don’t count? As I’m getting older the more disillusioned I get with our government, is it just me? As for that contract you need a lawyer to figure out what it all means, which was probably their intent!