Why new U.S. federal class action lawsuit against Apple and AT&T is a big deal

iphone 4 cases“A federal class-action lawsuit will move forward against Apple and AT&T for ‘locking’ iPhones to AT&T’s network, and Apple’s control over which apps can be installed on the owner’s phone,” Wall St. Cheat Sheet writes for Seeking Alpha

“This is an issue of whether a purchaser of iPhones has purchased all the ownership rights to the device or whether Apple somehow has reserved a parcel of ownership,” WSCS writes.

WSCS writes, “If the courts rule Apple and AT&T may exert special control over iPhones after a customer has purchased the device, it sets the tone for hardware manufacturers to limit and manipulate the use of mobile communications.”

Full article here.

[Thanks to MacDailyNews Reader “Robert S.” for the heads up.]

42 Comments

  1. No it doesn’t. Phone networks have been using “locked” devices for longer than the iPhone has existed. To parody a currently popular meme, you’re phrasing the question wrong.

    I suspect Apple will do quite well in an environment where there were no locked devices… it seems to work for France well enough.

  2. It’s one thing to say Apple is selling a cell phone that can work on all cellular networks and is choosing not to, and another to note that the iPhone is only technically able to work on one US cellular network. No court is going to demand a manufacturer build a product to use on a technically different network just to satisfy a customer’s desire to have a particular device on that other network. Apple is neither a monopoly denying users access to a cellular phone, nor a hardware manufacturer behaving differently from any other in choosing where to spend its capital to satisfy its investors. Buy it or don’t, that’s the only choice you have, and how customers pressure manufacturers to change their decisions.

  3. This BS. I want to opt out of this lawsuit. I want Apple to exercise as much control over the OS and interface as Steve deems fit. I’m a total tool of Apple’s devices. Someone please come up with the link to the law firm waging this suit so I can sue them for including me without my permission.

  4. I think the core issue is whether Apple “hid” the fact and terms of its exclusivity agreement with ATnT. Seems they did.

    People knew they were signing up for 2 years, but 5 years?

    Perhaps some people would have thought again, if they knew no other carrier would be available for such a long time.

  5. The lawsuit should be for iPhones sold at full retail. The $599-$699 iPhones should be completely unlocked from ATT. I think that case would have a better chance at success.

  6. Concerning the ownership issue, Verizon controls every facet of the user’s network access experience, including how users access additional applications on their devices. AT&T;does the same. Just the approach is different. AT&T;entered into a special agreement with Apple to get the deal, and transferred its usual control to Apple to control the user experience.

    I agree with the earlier user who suggested that Apple would do just fine in a fully unlocked phone user experience. However, I’m not sure the user will be as happy when they can install some mystery-ware app and it blows up their phone, and Apple’s only advice is to restore to factory defaults and only use apps from their curated store.

    Apple wants the user to have the best user experience it can with their products, hence its control fetish. If the user wants treat their iPhone like a commodity piece of hardware, fine, but don’t call Apple when the fire breaks out. I don’t believe Apple has sued anyone for jail breaking their iPhones. They simply assure they can’t reenter the walled garden with their non-standard device, while permitting them to restore the unit to its factory default if they haven’t so corrupted the firmware that they can’t.

    I don’t see this suit going anywhere. You bought the iPhone, you own it, it’s yours. Break it outside of warranty, it’s still yours. You’re on your own. Jail break it and install anything you want on it, but don’t expect Apple or AT&T;to pay for it, or fix it. You can’t have the candy unless you play by the rules. That was the deal when you bought it.

  7. What a bunch of BS. Every phone AT&T;carries is locked to a two year agreement. Once your contract expires, you CAN’T take it another carrier except T-Mobile and even then, it is not compatible with some of their frequencies. This lawsuit should be granted class action but bounced out of court. Granted, I would like to see Apple offer the iPhone on another network just to shut some people up but we know VZ is the real holdout (i.e. wants all of the control) and that ain’t gonna happen anytime soon.

  8. @ Tyoung
    Simple fix. When two years was up you could go to another phone and carrier. This is why the world hates Americans. We have turned into a nation of crybabies

    I agree 100%. If people are so damn anxious about verizon all the time, go to verizon. Stop damn complaining. The grass isn’t always greener on the other side.

  9. I would agree with the argument that the private terms of the Apple deal with AT&T;might be relevant if the iPhone would work with anyone else’s network on the US after two years, but it won’t. I signed up for a two year agreement for a new phone (knowing that), just as I have always done (researched new products I was interested in). At the end of the contract I can renew (which I have with the new iPhone 4), or I can select a new phone on AT&T;’s network, or another network. No one held a gun to my head and forced me to sign up for the iPhone.

    I think it’s rubbish for users to expect Apple to trash its customer experience just so they can install non-curated apps, while having Apple retain ownership of their user experience. If you want the wide open Windows experience, buy an Android or Windows Phone 7 (whenever they come out). As I said earlier, Apple does NOT have a monopoly on the cell phone experience. The choice is yours.

    I think people are misunderstanding Apple’s corporate mindset with their products. While it would certainly love to own 100% of the market, that is NOT their espoused motivation. They’re all about the user experience. That’s why I chuckle when Apple haters start shouting Apple is DOOMED just because Android and WP7 are/will gain greater market share over the coming years. I don’t believe Apple even cares. If Apple ends up with an ongoing profitable product line, while continuing to provide the user experience it aspires to, it’s completely fine with that.

    Apple moved into a new technology area that was broken and underachieving by its standards and took it over by storm. Now, the rest of the market can build on that opening Apple’s marketing prowess brought about. Those other companies operate with different agendas, and will be successful or not on their own merits.

    Apple generates new revenue streams, and the other companies do as well in Apple’s wake. I see the same thing happening with the iPad, Apple wasn’t first to the tablet market, but it is certainly showing other companies how to proceed.

    They might not be so surprised if they revisited their motivation for selling things from repackaging the same old stuff to squeeze out a few extra bucks, to reconsidering why people buy things in the first place, to use them with a minimal of fuss.

  10. @ rosswell,

    “I think the core issue is whether Apple “hid” the fact and terms of its exclusivity agreement with ATnT. Seems they did.”

    Everyone knew when they purchased the first iPhone that it only worked on AT&T. It was common knowledge at time that Apple gave AT&T 5 year exclusivity.

    Even if a purchaser did not know and was outraged, they would have said something a year ago when their two year contract died. We didn’t hear a damn thing. What those first iPhone purchasers did was sell their old iPhone on eBay or pass it down to family or friends. Then they bought an iPhone 3G on AT&T.

    Seems to me there are grounds to nullify this federal class-action lawsuit.

  11. Attorneys + Deep Pockets = Cause for Lawsuit

    It’s simple math.

    And, Tyoung: This is not about crybaby Americans. This is about a broken tort system, opportunistic attorneys, and a gutless political class that won’t do anything about it.

    I find it odd that when I bought my first iPhone in 2007 I knew that I would be stuck with ATT for 5 years. That was the widely reported span of the Apple/ATT deal. The exact terms were not made public, but the fact that a long term exclusive agreement was in place was clear to anyone who cared to listen.

    Lastly, people can do whatever to, and install whatever they want, on their iPhone. Apple is clearly within their right to disavow any guarantees to future functionality of the iPhone if you do. The “rules” of being a citizen in the iPhone ecosystem are pretty simple and clear. Join if you can live with the rules, buy an Android phone if you cannot.

    This reminds me of people that build houses at the end of airport runways that have existed for 70 years, and then complain about the noise and campaign to get the airport shut down. Ego-maniacal Narcissists!

  12. Customers knew iPhone works on ATT’s network, and that they were required to sign a two-year contract with ATT. You can’t even buy an iPhone (at least for the “usual” price) without going through the approval process for the two-year contract with ATT. If that was a deal-breaker, they did not buy an iPhone. There are plenty of other mobile phones and wireless carriers out there to choose from.

    Apple sold the iPhone “as is” and fully functional. Customers were free to buy or not buy apps to put on the iPhone.

    This lawsuit is completely pointless.

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