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Apple fails to dismiss iPhone class action suit

updated 07:50 pm EDT, Mon October 6, 2008

Apple dismissal rejected

A federal court in Northern California has rejected most of Apple's motions to dismiss monopoly claims that have been filed against it in a class action lawsuit inspired by issues with the iPhone, according to InternetNews. The suit, filed last year, makes several claims against the iPhone manufacturer and AT&T, accusing the companies of illegally closing the platform to any software or modifications that they consider competitive.

The plaintiffs also allege that the companies limited data and voice capabilities after the customers signed two year contracts, without indicating the changes during the initial purchase. Another complaint involves the five year exclusive contract between AT&T and Apple, which would effectively force customers to renew with AT&T after the initial contract has lapsed.

The companies are further accused of installing lock systems to prevent other SIM cards from being installed for travel or when the customer contract has been legitimately canceled. The suit also attempts to expose legal wrongdoing with the iPhone software update that was designed to cause malfunctions in phones that had been modified to run unapproved applications or SIM cards, which also nullified the device warranties.

The court denied Apple's motion to dismiss the plaintiff's Sherman Act, computer trespass, computer fraud, and Magnuson-Moss Warranty Act claims. The company successfully pushed to have the unfair and deceptive trade practices claims dismissed, although there is still room for amendment.

Apple is currently involved with multiple lawsuits from iPhone customers and AAPL shareholders, including another class action filing from a California resident that suggests violation of the Cartwright Act. Another suit from New York was initiated because of software problems, device quality, and performance that falls below advertisement claims. Another Sherman Act claim suggests monopolistic activity with iTunes. Even a Mac clone manufacturer, Psystar, that has been sued by Apple for copyright infringement has fought back with monopoly charges which are in the process of review for dismissal.




by MacNN Staff

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Comments

  1. saudio

    Joined: Dec 1969

    -3

    GIVE ME A BREAK!

    I bought a new car that had a full tank of gas. IT RAN OUT OF GAS and now I have to pay for it myself!!

    These people are RIDICULOUS and I'd expect NOTHING LESS from a Northern California court!!!


  1. panjandrum

    Joined: Dec 1969

    +2

    Astounding

    saudio - It always astounds me how little some people care for their consumer rights. If you want big companies to keep s******* you over, then that is your right, but leave me out of your blind consumerism. I for one welcome anything that will force Apple to start opening up their systems. Competition is GOOD for anyone who cares about the value of what they purchase.

  1. macadore

    Joined: Dec 1969

    -2

    BULLSH*T CASES

    All Conditions were disclosed by Apple prior to Sales!

    The customer has a choice to Accept and Buy, or not. To sue later to effectively renegotiate the Conditions is BULLSHT.

    Why do these judges not throw away such BULLSH
    T cases on day one? Or are they looking to get famous and pass it on to the Supreme Court? If so, let them audition for Court TV, or sub for Judge Judy...

    Smells like an extortion through ambulance chasing lawyers! Those should be made to pay all legal fees upon the dismissal!

  1. testudo

    Joined: Dec 1969

    0

    Re: Bullsh*t cases

    All Conditions were disclosed by Apple prior to Sales!


    No they were not. From the article:

    The suit, filed last year, makes several claims against the iPhone manufacturer and AT&T, accusing the companies of illegally closing the platform to any software or modifications that they consider competitive.

    Where was it disclosed that applications would not be allowed if they 'competed' with the companies?

    The plaintiffs also allege that the companies limited data and voice capabilities after the customers signed two year contracts, without indicating the changes during the initial purchase.

    You sign a contract, then they change the terms. This isn't allowed, is it? Oh, right, it's Apple and the precious iPhone. If Steve wants to come over for a reach around, you should be happy to oblige.

    Another complaint involves the five year exclusive contract between AT&T and Apple, which would effectively force customers to renew with AT&T after the initial contract has lapsed.

    The contract with ATT has never been fully publicized nor disclosed. But they are correct. What happens after two years? You're still stuck with ATT. This would be fine with a subsidized phone, but the 1gen phone wasn't subsidized to argue this point.

    The companies are further accused of installing lock systems to prevent other SIM cards from being installed for travel or when the customer contract has been legitimately canceled.


    Again, where is it published/mentioned that you cannot swap out a SIM card like you can with pretty much any similar type of phone?

    And since the DCMA allows for unlocking phones, this shouldn't happen.

    The suit also attempts to expose legal wrongdoing with the iPhone software update that was designed to cause malfunctions in phones that had been modified to run unapproved applications or SIM cards, which also nullified the device warranties.

    Again, the whole unlocking thing. It is allowed, so why stop it.

    If you want to complain, complain to Apple for tying themselves to ATT for absolutely no reason. They should've just sold it unlocked and let it go from there. (h***, they should've created a version to run on Verizon as well - and allow the iphoners to take control over their phones, rather than the phone companies people are so used to).

  1. vasic

    Joined: Dec 1969

    -3

    arguments full of holes

    "Where was it disclosed that applications would not be allowed if they 'competed' with the companies?"

    The standard iPhone/AT&T contract does not allow any unauthorised software to be installed. If you do install unauthorised stuff, Apple no longer guarantees support for your iPhone. If it works, fine; if it doesn't, you're on your own. Since practicaly no other phone maker ever updates its software after purchase, you can continue to use your iPhone with the software as it was when you bought it, plus your jailbroken software. Just don't expect Apple support and updates. If this ain't fair, you may have completely wrong expectations.

    "...You sign a contract, then they change the terms."

    Nothing was changed. This is simply bogus.

    "...What happens after two years? You're still stuck with ATT. This would be fine with a subsidized phone, but the 1gen phone wasn't subsidized to argue this point."

    First, iPhone was always subsidised. Do you honestly believe that Apple would have sold iPhone for only $400 and NO subsidy? It is common knowledge that the subsidy for the original phone was $50-$150 per device plus $3-$11 per month for two years (depending on who sold it - Apple or AT&T). Besides, there is nothing in the two-year contract that states that they won't allow you to unlock the phone after 2 years expire.

    "...you cannot swap out a SIM card like you can with pretty much any similar type of phone?"

    Every single subsidised phone comes locked, just like the iPhone. You CANNOT swap SIM cards.

    Unlocking is not illegal; however, DMCA exemption doesn't require carriers to provide unlocking instructions just for the asking. That would be completely undermining their business strategy of reducing the up-front cost of the phone and spreading that cost over the number of months.

    Apple made an exclusive deal with the largest carrier in the US. Elsewhere in the world, it made individual or multiple deals, with various local and regional carriers. There is no law that prevents Apple from pursuing its strategy. The monopoly charge is just absurd -- the only market where Apple may be approaching a monopoly status is iTunes/iPod business, and even there, they aren't abusing the position.

    While iPhone is extremely popular and selling incredibly well, it is nowhere near the monopoly position in any segment of the mobile market, with the exception, perhaps, of mobile phones with touch screen and no keyboard.

    Nobody was forced into any agreement, and nothing in that agreement was concealed or changed subsequently.

  1. Athens

    Joined: Dec 1969

    +1

    correction

    "Every single subsidised phone comes locked, just like the iPhone. You CANNOT swap SIM cards."

    Subsidized phones are sold with locks against other local carriers, IE, Fido phone wont work with a Rogers Sim Card, T-Mobile phone wont work with a AT&T Sim card but those same phones generally supported sim cards from other countries and markets. So I could take a T-Mobile or AT&T Sim card and put it in my Fido phone when in the US. The iphone didn't even allow this.

    When it comes to 3G, some one correct me if I am wrong but T-Mobile and AT&T use different versions of 3G technology which means a AT&T 3G phone cant work with T-Mobiles 3G and vise versa. If true (I don't remember where I read it)so a 3G iphone would only work on edge on T-Mobile. No idea how valid that is since T-Mobile is a german company you would figure they would use the world standards and AT&T would use something different.

  1. nat

    Joined: Dec 1969

    +1

    oh c***

    thanks vasic. more rubbish from our favorite troll but you countered brilliantly. well done.

    i'd like to add that anybody who uses cable will find their contracts are changed all the time.

    and also this declaration:

    "No they were not."

    indeed. so the words "claim" and "allege" mean nothing to him to the point where he can simply make such a final statement. not surprising however as this is what he does.

  1. UberFu

    Joined: Dec 1969

    -2

    Whu isn't?

    Anyone suing Sony for having a closed Eco-System for the Playstation?

    Why isn't anyone suing M$ for having a closed Eco-System for the X-Box 360?

    Why not sue Nintendo for having a closed Eco-System on the Wii?

    Consumers are using and hacking into these systems all the time to see if they can do stuff beyond what the manufacturer intended.

    Any company that makes a game for one of these systems has to adhere to the respective company's specifications. And they have to make 3 versions of it if they want it on all 3 systems. They can't make just one version and use it on any hardware they choose.

    Smae thing goes for M$'s Window OS - since Apple is in the hotspot for this too - Why can't I buy a copy of M$ Office for Winodws and have it run natively on a mac OS?

    Why can't I buy a copy of M$ Office for Mac and have it run natively on Windows?

    If my Chevy breaks down - why can't I replace the broken part with a Toyota made part if it happens to be cheaper?

  1. SockRolid

    Joined: Dec 1969

    +1

    Verizon isn't suing. AT&T customers are. LOL.

    In an alternate universe, AT&T is absolutely awesome, everyone wants to join AT&T to buy iPhones, and once they do, they're blissfully happy. In that alternate universe, Verizon is suing Apple and AT&T to see if they can do something, anything, to get Apple to build a version of iPhone for them.

    In our universe, many iPhone users hate AT&T, and will switch to Verizon the instant they can get their hands on a Verizon-connected iPhone. And in our universe it's the AT&T customers are suing, if for no other reason than to send a message to Apple and AT&T.

  1. SockRolid

    Joined: Dec 1969

    +1

    Yet another freetard.

    @panjandrum - "I for one welcome anything that will force Apple to start opening up their systems. Competition is GOOD for anyone who cares about the value of what they purchase."

    Then you must HATE Microsoft. God, how can you STAND it? Now run along to WindowsNN.com and complain there. Make us all proud.

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