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New Class Action Lawsuit Alleges iPhone Monopoly and Vindicative Apple
Tuesday, October 9th, 2007 at 4:00 PM - by Bryan Chaffin
Yet another lawsuit has been filed against Apple relating to the iPhone, this one a class-action suit alleging that Apple has created a monopoly for iPhones, and in collusion with AT&T, has worked to enforce that monopoly by vindictively bricking iPhone that have been unlocked to work with other carriers. AFP reported late on Tuesday that the suit, filed in California, seeks class action status, while AppleInsider noted that the suit seeks damages for up to six illegal counts ranging from $200 million to $600 million.
The gist of the suit is that Apple and AT&T colluded to both form and maintain a monopoly on iPhones. As iPhones are themselves a small portion of the cell phone market, use of the term "monopoly" may be loosely, perhaps erroneously, applied, but the other theme of the suit is that both Apple and AT&T have worked to keep users from unlocking their iPhones, asserting that such unlocking is a right.
While you won’t find the right to change carriers in the U.S. Constitution, breaking decryption on a cell phone for the purpose of changing carriers was specifically exempted by the Digital Millennium Copyright Act in the late 20th Century. In addition, there has been recent debate over whether or not the Magnuson-Moss Warranty Law affects Apple’s position that unlocking an iPhone voids its warranty.
Be that as it may, Apple and AT&T have worked to vindictively punish iPhone owners who have done just that, according to the lawsuit, by illegally voiding the warranties on unlocked phones, and by deliberately bricking those phones with a software update.
From the lawsuit, as reported by AppleInsider: "To protect its unlawful market position and the anticipated unlawful profits Apple and AT&T expected to earn, Apple repeatedly announced that any attempt to unlock the iPhone SIM or to install Third Party Apps would void the Apple warranty. This assertion was false as a matter of federal law, and was known by Apple to be false when made. The Federal Magnuson-Moss Warranty Act prohibits conditioning the iPhone warranty on the use of Apple products only, or on the use of AT&T service only, [...], which is effectively what Apple’s warranty approach unlawfully does."
The lawsuit was filed on behalf of a Washington resident named Paul Holman and a California resident named Lucy Rivello. Apple has so far been sued for dropping the price of the iPhone, for not properly disclosing that the iPhone can’t be unlocked, and twice for not allowing the iPhone battery to be changed by users. The device was introduced on June 29th, 2007, three months and thirteen days ago.
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