updated 09:00 pm EDT, Fri September 27, 2013
Carrier's change to data plans entangles Apple through 3G iPad
Although it had no say in how AT&T managed its "unlimited" 3G data plans, Apple and the US carrier are both responsible for harm inflicted on consumers who bought 3G iPads on AT&T's network expected to be able to use an unlimited data plan. The proposed settlement, which must still be approved by a judge, comes as a result of customers who spent an extra $130 on the 3G-capable iPad in the expectation that they could use AT&T's unlimited data plan with it. AT&T later revoked the option after promising it would retain it for iPad 3G customers.
The settlement would see Apple paying $40 to valid claimants, while AT&T would give class members $20 off an alternative data plan. Judge Ronald Whyte has given the deal preliminary approval, which might affect hundreds of thousands of customers, with no stated end point for the $20 discount -- which might last as long as the claimants continued to pay for that particular plan.
The settlement acknowledges that plaintiffs "overpaid" to get the 3G version of the iPad on the inherent promise of AT&T that they could use and continue to use its "unlimited" data plan, which they were later denied access to even as other customers on different plans were "grandfathered" in.
The settlement comes as a result of four separate lawsuits over the deception that were consolidated by the judge into one class-action suit. It would affect potentially all buyers of 3G-capable original iPads prior to AT&Ts termination of the "unlimited" plan, which happened in June of 2010.
While other 3G-capable tablets existed at the time, apparently not enough of them were sold to end-users for anyone to litigate AT&T over the lost data capability. No other brands of tablets are included in the settlement proposal.
The original case saw the plaintiffs demanding full refunds from Apple on the 3G iPads and that AT&T be forced to extend the unlimited data plan. The settlement is the result of years of negotiations between Apple, AT&T and the plaintiffs. Although the $40 Apple portion of the settlement could add up to hundreds of millions for Apple, historically only a small percentage of class-action claimants ever come forward.
AT&T's $20 discount will bring the cost of a premium data plan for claimants down to the cost of a basic plan, and includes any advancement in wireless technology such as forthcoming "5G" data systems, suggesting the discount may be active for users for years to come. Should millions of plaintiffs take advantage of the offer, both companies could see very substantive charges related to the matter.