Apple Sued For iPhone "Price Discrimination"

A New Yorker who waited for hours to be one of the first to buy an iPhone is now suing Apple, says Apple Insider.

Dongmei Li of Queens is accusing Apple of various sins such as “price discrimination, underselling, discrimination in rebates, deceptive actions, and other wrongdoings.”

Li purchased a 4GB model of the iPhone and now is upset that she can no longer resell her purchase for the same profit that someone who bought one after the price drop. She’s also upset that her phone has already been discontinued.

The $100 store credit offer didn’t placate Li because she thought it was unfair that Apple gave full $200 refunds to those customers who purchased their phones within the two-week return window. From Apple Insider:

Li included in her 8-page complaint historical stock graphs that show Apple’s share price to have risen in between the time it released iPhone in late June and when the company instated the price cut. She argues that this is proof that there was no sound reason for the cut, which she equated to “underselling.”

“Market conditions did not require Apple to change its price,” Li’s attorney, C. Jean Wang of Wang Law Offices, PLLC wrote in the filing. “iPhone was selling very well because Apple’s stocks were increasing since August 16, 2007 and rose as high as $144.16 on September 4, 2007, the day before Apple announced that it was cutting the price of iPhone.”

The lawsuit goes on to accuse Apple, Jobs and AT&T of forcing customers into 2-year service agreements with AT&T and imposing hefty $175 termination fees. These requirements are unfair, the suit continues, because customers who purchased the iPhone later in the year were able to utilize unlocking solutions that allowed them to forgo such terms and fees.

Unlocking solutions? That must be in the next lawsuit.

Oh, Steve Jobs. You’ve made them so mad. They hate you now.

Apple, Jobs, AT&T sued over iPhone price cut, rebates
[Apple Insider]
(Photo:Dan H)


Edit Your Comment

  1. DojiStar says:

    Ok, I finished laughing. I can write now.

    WTF?? She bought a retail phone and she is now mad because she can’t resell it for the same profit? What an idiot!!

    If you want to get in on new technology first, you are going to pay top dollar. If you want to wait a little bit, the prices always drop. ALWAYS!

    Why is this do difficult for Apple users to figure out?

    I bought a GPS in May for $250. It was just being sold in August for $199, 3 months after I bought it. Guess I should sue. TomTom f’ed me over, the bastards.

  2. louisb3 says:

    It’ll probably be about three minutes until someone comments that the early adopters paid a “stupid tax”, or similar bashing.

  3. louisb3 says:

    Damn, it was actually negative one minutes.

  4. azntg says:

    It’s true, Apple royally screwed over the early adapters… again! (my goodness, aren’t we seeing a pattern!. But, a lawsuit over it, well, I think it’s just another one to feed the lawyers. She should’ve known better that Apple is simply nefarious enough to do this! And Apple could’ve done better too… either apply the discount retroactively for everyone or don’t give a discount at all. Former would placate almost everyone, latter would prevent some sour grapes.

    Make no mistake though, I would be extremely pissed if I did buy an overpriced glossy plastic with metal accents, only to find out just after the return period that the price will be slashed to roughly in half and I’m SOL because my return period was passed by a day or two. Plus, the model’s being discontinued. God, that’s an ultimate insult and probably enough for me to swear off Apple for life and pray for their slow and painful downfall (as bad karma as that is).

  5. NickRB says:

    What a joke. I don’t think this will ever get in font of a jury.

  6. azntg says:

    @azntg: At the same time though, I have absolutely no sympathy to those trying to grab up everything early and start price gouging.

  7. randalotto says:

    @azntg: Apple didn’t screw anyone over. How many times must it be said?

    If you want an exclusive product when it first comes out, you’re going to pay more. I guess everyone who’s ever been on Comsumerist, (since you’re reading it online,) got screwed by Computer Company X, since newer, faster components came out and prices dropped after you bought your computer.

    It’s amazing that people are dissing Apple for ONLY giving $100 back. They had absolutely no reason to give ANYTHING back. The fact that they did is astounding to me, and makes me really respect how they treat their customers.

  8. urban_ninjya says:

    People who can’t deal with buyer’s remorse shouldn’t be buying anything new in the first place. There are millions of people who buy cars and see a larger than $200 price decreases with-in a year. And upon driving the car off the lot, they are already upside down on the car lone as the car has already lost 1/3 of it’s value.

  9. faust1200 says:

    I give it -30 minutes until someone starts bashing the people who gave a bashing to the early adopters.

  10. philbert says:

    Good – Apple sucks lately!

  11. crnk says:

    who cares?
    Stupid news about a stupid and frivolous “lawsuit”
    And since when does share price relate to a reason to drop the price of an item?

  12. azntg says:

    @randalotto: Apparently until your fingers fall off and you lose your voice, given the circumstances.

    I think it’s well understood that all technology will become obsolete in due time and is expensive as hell when it first comes out. Nobody would deny that and I sure as hell would not either (of course, some people never do learn about this).

    But, given the circumstances, the timing of those price drops and announcement of the planned obsolence, I would completely understand how those people who actually did buy the damn thing with good intents would suspect foul play and people saying that Apple screwed them over. It’s simply happening too close to the release date to be a coincidence. Most people would expect some “float” time before the bubble pops on them so soon.

    Besides, I’m also sure that you know about human nature. Either everyone gets uniformly treated to a discount or everyone pays full price or there will be people pissed off for “avoidable” reasons (of course, some people will always be pissed off no matter what).

    I’m sure this was obvious, but I was just being a devil’s advocate on this post.

  13. mrjimbo19 says:

    A good Consumerist would either wait for the “wow factor” to wear off and the price to drop or purchase the item with a price guarantee credit card so they have some level of protection. Obvious I know but still needs to be said…. over and over again.

  14. TMurphy says:

    If this lawsuit were to go through, it would imply that a company must get consent from the consumers what the price should be, unless they can provide a massive report on why it ‘makes sense’ from the consumer’s perspective.

    Let’s see what happens when the lawsuit finishes its course, then the lawyer drops his rates, having earned a tidy profit from this person …

  15. burgundyyears says:

    Wait until Ms. Li buys a new car and finds out driving it home to list it on ebay will knock off a heck of a lot more than $200 off its market value. What a maroon.

  16. BrooklynMike says:

    Early iPhone adopters need to give it up with the constant complaining about the price drop. Apple went above and beyond by giving a 200 dollar rebate to those who purchased it within 14 days of the price drop in addition to 100 dollars in store credit to those who purchased an iPhone outside of that window.

    So really, they only paid 100 dollars more than those who bought it recently. That’s what happens with exclusivity. I want the new blackberry curve with tmobile, but I don’t want to pay the hefty price tag. If I wait a few months the price will drop. But by then it will be an older product and there will be news of more products on the horizon. That’s the game, get over it.

  17. GearheadGeek says:

    She should hire the $54M-pants-lawsuit guy from DC, Roy Pearson. He should be out of a job by now, and if he hasn’t been disbarred he’d love to take a case as frivolous as those he files for himself.

  18. MyCokesBiggerThanYours says:

    OK, I am an Apple fan. But I didnt buy the iPhone when it came out. You know why, because its too expensive for me.

    I think this lawsuit is silly. It common knowledge and common sense that as soon as you buy a gizmo the resell value drops dramatically. Its also common knowledge that the price drops when items are discontinued to move the remaining product.

    I agree its pretty bad for early adopters that the price dropped in such a relatively short time, but that is the price early adapters pay. For the rest of this this is a phenomenal plus. The lower price makes the iPhone more accessible so many more.

    You shouldn’t be able to sue someone just because you made the wrong choice and a bad economic decision.

  19. Rusted says:

    @louisb3: It is fun to state the obvious.

  20. BillyShears says:

    This totally reminds me of the post about the guy who dropped an executive CS carpet bomb on Starbucks because they were out of raspberry syrup so the poor dear couldn’t get his “regular.”

  21. homerjay says:

    Ooh! I get to be the one to say it this time!

    “Call the WAAAAAAA-mbulance!”

    Only in freakin’ America. This guy is probably best friends with Fancy Pants.

  22. @homerjay: You’re right, Homer. You’re right.

    I’ve got three Macintosh computers, have used Macs since 1989, and am never going to buy an iPhone. It’s just too expensive and is something I don’t need.

    Now the new, cheap-o TiVo HD box, though…That sucker ROCKS.

  23. RumorsDaily says:

    I don’t understand what her claim is. Does she have one of those “I didn’t go to law school” lawyers?

  24. homerjay says:

    @loquaciousmusic: I was thinking of switching to that when FIOS went live (next couple months). I’d like to get your input on it but wde should probably bring it over to the forums instead of here. I’ll start a thread.

  25. homerjay says:

    @loquaciousmusic: I was thinking about getting that. I’d like to get your opinion on it but we probably should take it over to the forums instead of here. I’ll start a thread if you feel like discussing.

  26. Mr. Gunn says:

    Can I sue iphone owners for being whiny babies?

    /get a Nokia

  27. Buran says:

    What’s the problem here? Things drop in price all the time and normal people don’t go suing, say, Motorola when their $500 Razr they bought the first day it was on sale now can be had for free with some deals. And considering everyone seems to have those these days, I guarantee a lot of stupid people have Razrs. Yet they manage not to file stupid lawsuits.

  28. Crazytree says:

    If nothing else, this goes to show what immature, selfish little babies Apple fanboys are.

  29. Ncisfan says:

    beggars cant be choosers. you bought it full price when it first came out you paid $300 for it glitches and all…. and now you cant do anything about it

  30. hoo_foot says:

    Why are iPhones owners so whiny?

  31. bombaxstar says:

    oh noes =[

  32. FLConsumer says:

    @hoo_foot: Typical Apple fanboi personality. Goes hand-in-hand with the whole emo thing.

    You don’t see Motrola Razr customers bitching about having spent a fortune for them when they first came out only to have cell phone co’s giving them away free now. Same “type” of market as the iphones — new, cutting edge, exclusive product. The only difference is the hype and the fanbois who think Apple still gives a rip about them.

  33. Broominator says:

    “iPhone was selling very well because Apple’s stocks were increasing since August 16, 2007 and rose as high as $144.16 on September 4, 2007, the day before Apple announced that it was cutting the price of iPhone.”

    This argument makes no sense. How do they intend to prove that because share prices were increasing, iPhone sales were doing “very well.” Any correlation between the price and iPhone sales was the result of pure investor speculation, as Apple has only announced the first 30 hours worth of sales (last quarter) and when they hit 1 million (later in September).

    Can someone explain this to me?

  34. ShadowFalls says:

    No one made her get an iPhone, no one made her wait in line for one either. She knew what she was paying for when she paid for it, there was no price guarantee provided by Apple or AT&T at all.

    Apple cut the cost to increase its profits. Simply put, the sales were beginning to dwindle as most everyone who was going to buy it for that price range already had done so.

    No one got angry at Microsoft and Sony for dropping the price on their game consoles when others paid more for it. It is a way of life with things.

    Remember, no one forced her into that contract. She willingly signed it when purchasing her iPhone, knowing all the fees it came with.

    Besides, what amount of damages do you think she might even get awarded? This is just another case of “American Gone Sue Crazy.”

  35. motown_missile says:

    Boo Fucking Hoo. Get a life, Dongmei Li of Queens, or learn how the real world works before you venture out into it, shiny new Sense Of Entitlement clutched firmly in your greedy little paws.

  36. Jesse in Japan says:

    I am suing the United States government over the declining value of the US dollar in comparison with other major currencies, most notably the Canadian dollar and the Euro.

  37. SOhp101 says:

    The only funny thing about this whole debacle (or lack thereof) is that it’s a slap in the face of all diehard Apple fanboys. They’re a for profit corporation and their primary motive is to stay in the green.

  38. Buran says:

    @homerjay: You mean, two threads?

  39. olegna says:

    Stupid Tax, Keeping Ahead of the Joneses Tax, Being Seen With The Newfangled Gadget Tax, Rounded Corners & Brushed Alumminum Tax, Sat My Fat Ass in a Lawn Chair for 48 Hours Eating Cheetoes and Being Seen on TV Tax.

    Early Adopters are Idiots. Doesn’t matter if it’s Apple or not. Stop trying to pretend like you’re rich, OK? You’re not rich. That iPhone was charged on your credit card. You probably ended up paying over $1,000 for it because you charged it. Rich people use mobile phones held together with duct tape. Rich people drive 10-year-old Izusu Troopers. Poor people and those clinging to the Middle Class have iPhones and Ford Explorers (the latter: esp. in the ghetto).

    I know a guy who is worth five million dollars. He had a Nokia that came free with his mobile plan. He drives an old Ford Taurus station wagon.

  40. Trai_Dep says:

    So does this mean that Zune owners can sue for TWICE as much?

  41. aseriesoftubes says:

    I guess Apple forced her to wait in line for hours, then actively coerced her into signing an “unfair” mobile contract (ain’t they all?). Sorry, I have zero sympathy for this dummy.

    On top of that, part of her complaint is that Apple and AT&T colluded to prevent her from using unsanctioned, third-party SIM-unlocking software that would void the iPhone warranty and violate the AT&T terms of service. The massive corporations have some nerve!

    If the legal system in this county isn’t completely broken yet, this one will be laughed out of court.

  42. Raachie says:

    In short: What a dumb bxtch.

  43. royal72 says:

    dear ms. li,
    i appreciate your frustration with apple and/or at&t, however on behalf of the tax payers of the united states, i request that you take your lawsuit and shove it up your ass. you are wasting our (collectively) tax dollars on what amounts to a couple hundred bucks.
    thank you for your cooperation,

  44. Anonymous says:

    What is the first rule of Geek Club? Never buy first generation technology/model!

    Patience is a virtue.

  45. S-the-K says:

    I agree! How dare companies sell things for less weeks or months after their initial release! How dare car companies sell cars that are only a year or two old for less than new cars!

    I’m going to sue IBM because the IBM XT I bought back in the day sells for less now than it did then. I want a $2500 refund, you thieving big blue weasels!

  46. thalia says:

    So it’s Apple’s fault that if you end your contract, you get charged a $175 termination fee? Girl, you get charged that no matter what phone you own if you end your contract.

    This is why I NEVER buy things the first six months they’re out. Any idiot knows that electronics are most expensive the first six months unless there’s a promotion going. If you have the mentality of, “Gotta have it, and gotta have it now!” you need to shut up and accept the consequences of an impending and highly probable price drop. Personally, I’m holding out on getting that new nano until they come out with a 16GB version, even if it takes a year for them to make one (although once that happens, you know all the people who cheaped out on 4GB are gonna complain about the price drop of the 8GB…I’m just saying…)