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TMO Reports - Antitrust case Against Apple, AT&T To Proceed

by , 4:20 PM EDT, October 6th, 2008

Back in October, 2007, Timothy Smith filed an antitrust lawsuit against Apple and AT&T. On October, 1, the Northern District of California rejected Apple and AT&T's request for dismissal.

The fact that the judge rejected the requests for dismissal has little bearing on the merits of the case, an attorney who follows Apple lawsuits, bust wishes to remain anonymous, told TMO. A dismissal is usually only granted in the most obvious cases of judicial abuse, but in this case, the judge, James Ware, United States District Judge has elected to proceed with discovery and trial.

In the introduction to the order, judge Ware wrote:

"Plaintiffs allege that consumers were offered iPhones only if they signed a two-year service agreement with AT&T Mobility. Plaintiffs allege, however, that unknown to consumers, the companies had agreed to technologically restrict voice and data service in the aftermarket for continued voice and data services, i.e., after the initial two-year service period expired. The question before the Court is whether if these allegations are true, the Complaint states a claim for a violation of the federal antitrust laws and other consumer protection laws."

The plaintiffs brought the following charges against Apple and AT&T.


Judge Ware discussed the claims of the plaintiff, defenses, and applicable law, and reached the following conclusion, with some motions granted and most others denied.


In Mr. Smith's original lawsuit, he claimed that an exemption to the federal Digital Millennium Copyright Act of 1998 granted last year by the Library of Congress allows for phone unlocking. Some users who did unlock their phones found them subsequently bricked by an Apple Update. Observers have differed on whether the Library of Congress exemption applies if the user (perhaps unwittingly) agrees to certain wording in the iPhone terms of use.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:geoduck Posts: 1921 Joined: 30 Dec 2003
Subject:

Good call by the judge on this one.

I mean after all you ARE forced by law to buy a smartphone and the Apple iPhone Is after all the only smarphone available in the world, that's a monopoly that has to be broken. Plus, you don't see other companies having on-line stores that sell only software that works with there products and nobody elses.

No Apple is clearly in the wrong on this one.

Close Name:Sir Harry Flashman Posts: 792 Joined: 08 Feb 2007
Subject: Do I understand that correctly

"unknown to consumers, the companies had agreed to technologically restrict voice and data service in the aftermarket for continued voice and data services, i.e., after the initial two-year service period expired."

When my two year contract is up then my Iphone data plan may be restricted, I may no longer have unlimited usage? I just checked and I didn't see anything like that in my service agreement, but I may have missed it.

Perhaps somewhere in the agreement is something that says unlimited data requires a two year plan and when it expires and one goes month-to-month then you pay for data usage. We would have to sign up for another contract?

I was ticked off enough when I learned that my first month's iPhone minutes do not roll over.



Last edited by Sir Harry Flashman on Mon Oct 06, 2008 5:55 pm; edited 1 time in total
Reply | Quote
Close Name:geoduck Posts: 1921 Joined: 30 Dec 2003
Subject:

FWIW at the moment I am doing IT in a call center that supports "a major cellular provider", (not AT&T, one of the other guys).

Data plans are one of the biggest headaches for everyone. Agents find them difficult to explain. Customers assume they are getting ripped off. Nobody is happy.

Personally I just don't think ANY cellular provider is handling data plans well. AT&T, our client, Rogers here in Canada, they all have only ended up p!$$ing off their
customers.

Personally, I'm just not going to get ANY smartphone for a few years until they get this mess sorted out.



Last edited by geoduck on Tue Oct 07, 2008 7:55 am; edited 1 time in total
Reply | Quote
Close Name:Guest
Subject: Monopoly?

Companies have the right to regulate their products. Monopolies are about an entire market not a single product. You have to show that the monopolizer is so powerful that it can effectively ignore competition and force consumers into a single choice/price.

So what entire market are they monopolizing and how? Aren't there legitimate competitors? Doesn't Apple feel the pressure to beat RIM and others technology and pricing? This is what capitalism is all about. You make a big investment in hopes of getting a big market share.

I don't like the way they're doing things but I just don't see how it even comes close to a monopoly.

No knowledge/comment on the other charges.

Close Name:vasic Posts: 278 Joined: 09 Aug 2005
Subject: to Sir Harry Flashman

Restricting of voice and data service after the contract expires means that even though you are no longer bound by your contract, you still have to continue buying voice & data service from AT&T, i.e. you cannot buy them from any other carrier -- your iPhone is locked and, presumably, they won't allow you to unlock it.

This one is extremely easy to refute. Nowhere in the agreement did Apple (nor AT&T) state that the unlocking of the phone would be impossible. They aren't allowing it now, but they could easily begin to allow it on 30 June 2009 (when the first 2-year contracts begin expiring).

Currently, AT&T will provide unlocking instructions for every phone (but the iPhone) to every customer who asks (as long as they have been paying their bills regularly). Nothing indicates this wouldn't be possible with the iPhone when the time comes.

Close Name:Sir Harry Flashman Posts: 792 Joined: 08 Feb 2007
Subject: Thanks Vasic

Quote
vasic wrote:
Restricting of voice and data service after the contract expires means that even though you are no longer bound by your contract, you still have to continue buying voice & data service from AT&T, i.e. you cannot buy them from any other carrier -- your iPhone is locked and, presumably, they won't allow you to unlock it.

This one is extremely easy to refute. Nowhere in the agreement did Apple (nor AT&T) state that the unlocking of the phone would be impossible. They aren't allowing it now, but they could easily begin to allow it on 30 June 2009 (when the first 2-year contracts begin expiring).

Currently, AT&T will provide unlocking instructions for every phone (but the iPhone) to every customer who asks (as long as they have been paying their bills regularly). Nothing indicates this wouldn't be possible with the iPhone when the time comes.


Thanks Vasic. I consider the plan I have with AT&T to be reasonable and the service here in San Diego is good so I don't have a problem staying with AT&T.

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