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New Class Action Lawsuit Alleges iPhone Monopoly and Vindicative Apple

Wednesday, October 10th, 2007 at 4:40 PM - by

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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xmattingly said:

member since 31 Jul 2007 with 266 posts, unranked, send him a message or view his profile

Wed Oct 10, 2007 4:59 pm

You spelled "vindicative" wrong. It's vindictive.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Wed Oct 10, 2007 5:06 pm

No, I don't think they did. "Vindicative" means "tending to be vindicated". I think what the headline editor is trying to say here is that these post-lobotomy lawyers who are suing Apple and the mouth breathers they represent pretty much make Apple's case just by existing.

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A guest said: (hide)

Wed Oct 10, 2007 5:14 pm

I see a problem here.

(1) Apple forwarned in their documentation that if you use unsupported third party modifications it would VOID your warranty. This was known up front and the consumer knew this BEFORE purchasing.

(2) Apple WARNED users that if you had "unlocked" your phone applying the 1.1 update may make your phone inoperable.

The user would have to VOLUNTARILY apply the update. The update was not needed to operate the phone.

So a user would KNOW in advance that if they chose to "unlock" their phone they would (a) void their warranty and (b) run the risk of making their phone inoperable if they applied the update.

THis law suit is stupid. Many carriers have phones that are "EXCLUSIVE" for only them. See any lawsuits for those? iPhone is no where neear any monoply because you have your choice of other PHONES. ie Blackberry.

As to applying the updates then crying when the phone became a brick.

You can purchase a GUN in any state. You buy bullets for said gun. If you voluntarily load the gun then point it at your foot and pull the trigger is the Gun manufacturer to blame for your own stupidity? No.

Users were FORWARNED about the consequences of the update. It is not Apple's fault that most people are to busy in their selfish lives to actually READ before the click OK.

So lets ramp up the lawsuits of stupidty.

(1) If you buy an XBox you can only play Xbox games on it. You cannot play Wii games nor PS3 games. Why that is a monopoly! What do you mean I can only play halo 3 on an XBox 360? Why that is not fair! I should be able to play it on my atari 2600. Lets sue!

(2) DVD's with regional codes. What do you mean My American REgion DVD player won't play this EU DVD my cousin sent me! Lets Sue!

(3) I own a Nissan. Why can't I put FOrd Parts on it? I bought the truck. I should be able to use anything on it! Lets Sue!

(4) I poured syrup in my gas tank and now my truck won't run. Lawsuit! Gas as the only fuel source violates my consumer rights!

These people filing lawsuits all have one thing in common. They have no common sense.

These are the people who try to blow dry their hair in the bathtub or pour hot coffee in their lap and then cry foul. THe "Idiot Labels" we now have on products are for these foolish people who do the stupidest things.

In order to "brick an iPhone" you have to (a) decide that although the WARRANTY information states that if you use unauthorized software modifications you WILL VOID your warranty they still choose to IGNORE that warning and go ahead and VOID THEIR WARRANTY. (b) After they have VOIDED their warranty they get an option to update their phone. The text STATES that if you HAVE USED SOFTWARE MODIFICATIONS YOU MAY MAKE YOUR PHONE INOPERABLE. They have to CLICK OK and continue with the update VOLUNTARILY even though they were WARNED BEFOREHAND.

So is it Apple's fault that a small percent of iPhone consumers are slobbering idiots? No.

These kind of lawsuits would be opening the doors for all kinds of PROPRIETARY issues. Just because you purchase a product doesn't mean your aren't responsible for your ability to use it correctly.

SOmeone drop a steamer in the gene pool. Geez.

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A guest said: (hide)

Wed Oct 10, 2007 7:01 pm

Apple's solution to this will be to void any and all warranties and then stop offering them completely. It's not too far a stretch to go from 90 days to nothing if you think about it. IMHO, this lawsuit will be tossed for being frivilous. NOBODY forced them to buy a product they knew the terms of up front. It's not like they had a gun to their head and were told you have to buy it no matter what. It's not a monopoly, there are THOUSANDS of optional choices of phones, carriers, and such. Just because you can't have this one device isn't stopping you from communicating over the cell waves is it.

By the way, does it void my warranty if I hack my microwave oven and make it into a toaster? Just curious. I'd like it to give me a light brown color on my bread, but I don't want to void the warranty doing so. I'd also like to make my pencil sharpener into a lathe so I can do some woodwork. Do you think it's going to make it USELESS?????????

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A guest said: (hide)

Wed Oct 10, 2007 8:12 pm

Isn't saying Apple has a monopoly on iPhones sort of like saying Microsoft has a monopoly on Excel?

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A guest said: (hide)

Wed Oct 10, 2007 11:06 pm

Boo Freaking hooo.

I can't get On-Star in a Ford either. Does that mean I should sue GM?

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Intruder said:

member since 07 Jul 2004 with 3149 posts, TMO Mac Specialist, send him a message or view his profile

Wed Oct 10, 2007 11:06 pm

Anonymous wrote:
Isn't saying Apple has a monopoly on iPhones sort of like saying Microsoft has a monopoly on Excel?

It is exactly like saying that.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Thu Oct 11, 2007 2:04 am

Guest wrote:
I can't get On-Star in a Ford either. Does that mean I should sue GM?

Yes, you can! There is a vibrant developer community committed to getting OnStar running on the Ford platform and continually working around impediments that GM introduces at upgrade time. They already have OnStar working on previous generation Mustangs (2000-2005) as well as the first generation Taurus! Best of all, their workarounds are available for free and licensed under GPL 3!

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A guest said: (hide)

Thu Oct 11, 2007 3:17 am

I'm thumbing this comment on my iPhone after the 1.1.1 patch. I'm happy with AT&T and the iPhone. Although the hacks were tempting, I refused using anything, including jailbreak, because I knew the risks involved. Apple had warned their customers from the get-go not to toy with the sim cards. Weither or not Apple proactively sought to brick the hacked phones intentionally, the hacked phones wouldn't have been bricked in the first place if they had listened and pondered what the consequences might have been. Yo' mama told you not to run with scissors, if you fall on your fat arse and poke an eye out, don't come cryin' to yo mama. Following the warning signs is just common sense, like comments stated before this one. Don't bite the hand that feeds.

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Thu Oct 11, 2007 8:36 am

Every week it seems somebody is suing Apple for one asinine thing or another. Yes these suits will be thrown out with prejudice, or most of them will be anyway, but there is a cumulative effect. Like the old saying; it's like being nibbled to death by ducks.

I think it's time the community took action. Boycott.

Who else do these slimeball attorneys represent? Don't do business with them as long as they use a legal firm that takes such unethical cases

Who do these plaintiffs work for? Don't do business with them as long as they employ such lowlifes.

If it became known that suing Apple had serious consequences, i.e. you could get fired or your business could be bankrupted, then maybe some of these greedy AH, and let's not let them fool us these suits are all about greed, might think twice about trying to extract their pound of flesh from Apple.

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A guest said: (hide)

Thu Oct 11, 2007 9:54 am

@geoduck, Just what we need. Another megacorporation impervious to the legal system and able to browbeat smaller entities because of the risks of holding them accountable. I'm not supporting this case in any way, but your suggestions are horrid.

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Thu Oct 11, 2007 2:16 pm

Apparently the "threats" of legal action aren't really being taken seriously by too many people, least of all stockbrokers and investors. Apple's stock has run up almost to $170 now. Sales are booming, the lawsuits are frivilous and just plain annoying now. I think most people understand the vast difference between Apple's stance on the iPhone versus the "Monopoly" ruling handed down against Microsoft in the US and the EU.

And since the iPhone has been out less than 3 months, most also realize that there needs to be an appropriate amount of time for Apple to consider opening up the 3rd party development. They're doing so, at their own pace, using authorized means. If there were NONE, they they would have a monopoly on the software for the device. But they've opened the door slightly and it's creeping in. 3 months does not a monopoly make.

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Thu Oct 11, 2007 7:27 pm

Anonymous wrote:
@geoduck, Just what we need. Another megacorporation impervious to the legal system and able to browbeat smaller entities because of the risks of holding them accountable. I'm not supporting this case in any way, but your suggestions are horrid.

I don't think it would make Apple impervious at all. The sucess of the boycott would I suspect be in direct perportion to the legitimacy of the lawsuit. If Apple found to be, let's say powering their laptops with little pieces of unshielded plutonium, I doubt most people would have a problem with somebody filing suit and any boycott would not get off the ground.

Mind you, I have supported the concept of Looser Pays in civil suits for quite a few years now. Without some risk to the plantiff, going to court is too often just a chance to get money for slimeballs. Not that all cases are without merit mind you. Many are very justified. I just think it's a little too easy to drag anyone into court for any reason no matter how frivolous.

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A guest said: (hide)

Sun Nov 04, 2007 7:03 am

I believe that there are simularities between the iphone situation and that regarding dvd region code restrictions. In particular: computer users are not appropriately informed regarding region code restrictions/enforcement, and, that, apparantly, vendors by their policies seek to make difficult customer actions to correct the dvd region code restriction. Has anybody brought a class-action law suit regarding these region code restrictions? thank you.

B.

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