Apple, AT&T served with class action suit over iPhone locking practices
By Chris Ziegler 
posted Oct 10th 2007 4:05PM
posted Oct 10th 2007 4:05PM
It goes without saying that if you sell enough of pretty much anything, you're going to eventually get someone riled up over a missing feature, a broken feature, or in this case, an unwanted feature -- and that someone might just happen to know a lawyer (or worse yet, be one). The latest class action suit against Apple and AT&T over the iPhone, filed in California, reads like a what's-what of complaints we've heard since before the phone was even released: the carrier shouldn't be charging an early termination fee for a phone that isn't subsidized, its international roaming plan is a total ripoff compared to a prepaid SIM that you'd normally buy to use with an unlocked handset, and most notably, that neither AT&T nor Apple have the right to purposefully damage (via firmware update) or void the warranty of a "lawfully" unlocked iPhone. All told, the suit rocks the two companies with a grand total of six counts -- alleging violations of a garden variety of state and federal laws -- each asking for between $200 and $600 million in cold, hard cash. Anyone who's bought an iPhone and "sustained damages" from it is entitled to participate, so put on your lawyerin' pants and enjoy the courtroom action.[Thanks, Mark]
The way I see it the hardware is yours when you buy it. If I find a way to unlock my phone through ways that do not violate Apple's patents, Apple does not have the right to damage my phone. They can not support it and decide they want nothing to do with me, but they can't HURT me. If I'm missing any facts please someone correct me but it seems like that is exactly what Apple is doing here and I hope they pay for it...
The hardware is yours but the software is only licensed to you. If you modify the software and then Apple modifies the software thinking it wasn't modified and it breaks, tough. Apple's updates are only designed for iPhones with unadultered software. They don't want to have to deal with the thousands of software combinations that come with 3rd party software. Besides, 3rd party software currently utilizes security holes that could be exploited by others to damage the phone.
That is interesting... I just finished a post that is similar to angelus', but then I saw your (t-bone's) post. I don't remember seeing that info in a license agreement/form- but...that's probably because I didn't read very hard, and just wanted to use the phone. A quick google shows that this is absolutely correct though.
I never really thought this was illegal on their part (although I used to think it should be). I just think that it isn't a very good way for apple to treat their customers. And really, they'd probably sell more iphones by turning a blind eye to modders. Of course...AT&T wouldn't be making any of that money, haha.
Well said!! i cannot read the contract until i connect to iTunes, so why apple needs the restocking fees?
Ok just wandering but how much of this did Apple REALLY do illegally?
Serves y'all right for buying iPhones in the first place.
Only two parts of this lawsuit may bear fruit, both related to unlocking. First, as stated (kind of) by Jerry, there is legal precedent and "common practice" expectations that would lead consumers to believe that the phones could be unlocked. Early termination fees are there to "encourage" people to keep their contracts and not to take their legally owned phones elsewhere. They are grudgingly allowed by lawmakers so carriers can recoup subsidization costs. Device locking is a different thing altogether. I know there was at least one case (can't remember details but I think there was a reference to it on this site not too long ago) that resulted in a carrier being forced to unlock phones at the request of the phone owner. Not a regulation but a precedent--thus requiring a lawsuit to force AT&T and Apple's hand. Some other countries do have laws, btw, and I have a feeling that a high profile case like this may force the FCC to create a regulation and/or congress to pass a law. The second is the part about knowingly damaging or disabling a device because it was unlocked. Might have been the same case, but it there is precedent against this type of behavior.
I believe that they will be forced to offer unlocking of this phone at some point. The overseas roaming costs are too extreme and it is very bad for the image of both companies. Even if the lawsuit fails to produce a legal impetus to do so, I think they'll eventually have to in order to repair their tarnished image. I know I for one have forsworn all Apple products (including the iPhone which I most certainly would get otherwise--it is way cool with or without 3rd partu apps) until they come to their senses. They're new to the phone game, give them a chance to figure out how to play.
All you people trying to defend Apple have seriously no scruples. The future of phones, is the iphone. We will all one day in the near future use iphones, whether it be by APPLE or by the Orion Nebula. Therefore it is imperative that a device which Humans carry everywhere they go on this planet, should be operational EVERYWHERE on this planet. A phone should not have locks and should be compatible with any sim-card in any country. I do not care about the lawsuit, and the judge can very well throw it out, as long as Apple wakes up to this and changes its policy on iphones. People who paid for it, with a ridiculous price tag of $400 - $600 for a phone cannot complain, coz you chose to buy something and didnt do your homework. However, people who have found ways to unlock the phone should not be penalized and Apple has no right to corrupt their phones and or Atnt cancelling their contract. People should realize that phone is not an accessory anymore, it is a ncecessity. If you paid $400 for a phone, and then travel to India for a month, what are you suppose to do? Buy a new phone in India?? It defies logic.
For your average customer buying at an Apple store is like going to a Best Buy, Sony or Palm shop or similar. You expect to buy hardware (and software) and i can understand people thinking their unsubsidized product without contract or anything would work on various cell phone carriers. Sounds like common sense and is standard practice in most countries. Just because Apple somewhere says it is changing standards (A device manufacturer dictating forcing you to a carrier to make a share is new to me) doesn't mean they are right so and should stay unchallenged.
In Europe phones bought at a regular retail chain are unsubsidized and can be used with any sim card /carrier. A phone simply being a device, as it should be and is with all other common electronic products.
Imagine Sony would do the same with their notebooks. Only EA games at twice the price and jpegs can only be viewed with photoshop.
I do get the no 3rd app. idea and would say that's apples thing, they should do what they want on that side.
In America, where this suit is based, you're average consumer purchases a phone that is locked to a particular carrier. Yes you can legally unlock a phone here (not something an average consumer does), but the carrier for the manufacturer is not required to unlock it for you/give you an unlock code. They might just to be nice, but they aren't legally required to.
@jt
I thought that was when you buy your phone through a carrier and not from the phone manufacturer.
How does it work at a palm store?
Palm stores are mostly in airports here, and I gather they are more geared to selling Palm accessories. Sure you can buy a Treo unlocked, but practically speaking most folks just get whatever their carrier/job offers.
Some typos up there, sorry. English isn't my native language. Thanks!
p.s. Really, Sony is your example? Yeah they would never require you to use proprietary formats with their products...
I was at a meeting at my school where Steve Wozniak (the co-founder of Apple) talked to about 20 students in private before he gave a speech (all of us luckily involved people got to hear him). I have to say that he DOES NOT like Apple's moves with the iPhone (he specifically mentioned the unlocking part since the first person who unlocked it goes to my school AND he also saud "what good is a phone you can't put ringtones on RIGHT WHEN YOU BUY IT and you need an update for that")... so yeah...
I don't know what to say anymore...
What happens when all of the hacked iPhone owners sue Apple into submission...
I realize that Apple is a multi-billion dollar company, but thousands of hacked iPhone owners multiplied by 6 counts multiplied by 200-600 million doesn't sound too good for Apple...
Which also means that your iPhone will never again be updated, will never again see a new version, and more than likely AT&T will drop the service.
I know that won't happen, but suing Apple for developing a device and then entering into a contract with a certain carrier, isn't the way to go about it.
Apple is only locking the iPhone because they wanted a certain service plan for their iPhone users (unlimited data and email, visual voicemail and the other little goodies they have) and AT&T fit the bill. They are only keeping their end of the bargain with AT&T, which WAS to give the best benefit to their users.
"Apple is only locking the iPhone because they wanted a certain service plan for their iPhone users (unlimited data and email, visual voicemail and the other little goodies they have) and AT&T fit the bill."
No, Apple locked the iPhone because they want in on that juicy contract money and not have you using your unlimited broadband connection in conjunction with the built in wifi and a third party Skype client. Here in Toronto, there's pretty much no place left where I can't get a wifi connection. I know the very thought of it is keeping telco's up here up at night. Apple wants to sell the cow, but still get the milk.
"Apple is only locking the iPhone because they wanted a certain service plan for their iPhone users (unlimited data and email, visual voicemail and the other little goodies they have) and AT&T fit the bill."
No, Apple locked the iPhone because they want in on that juicy contract money and not have you using your unlimited broadband connection in conjunction with the built in wifi and a third party Skype client. Here in Toronto, there's pretty much no place left where I can't get a wifi connection. I know the very thought of it is keeping telco's up here up at night. Apple wants to sell the cow, but still get the milk.
One point to be noted here is the return policy. From AT&T's website:
"If the equipment you purchased does not meet your expectations, simply return it either to a store or by mail within 30 days from the date the equipment was purchased or shipped. (Gift cards, Ring tone cards, and Apple branded equipment are excluded. See below.) Equipment returned within 30 days will be refunded back to the original payment method. Any rebate associated with the returned equipment will be voided."
"Apple branded equipment is covered by a 14-day return policy and must be returned to the original point of purchase. If the Apple branded equipment is returned unopened and in the original shrink wrapping, it will be refunded back to the original payment method. Opened Apple branded equipment that is returned within 14 days will be subject to a 10% open box restocking fee. All products must be packed in their original, unmarked packaging including any accessories and manuals that shipped with the product."
So I am suppose to look at the shrink wrapped box (I must concede Apple packaging is great) and decide whether I like it or not? Now, yes I can try out the Apple / AT&T store but how the heck will do I know whether the phone will work inside my bathroom or not? Now if I am shelling out half a grand I should be able to atleast try the thing out and I shouldn't be charged 50 bucks just for exercising my choice.
And Chris, Apple + AT&T are being sued here NOT for selling "too many" iPhones but for clearly discriminating against one set of customers.
This is the first time I have seen Apple's short sightness here. Apple is loosing customer base here just to help AT&T gain market share. This alliance is bound to fail like the Moto ROKR crap...
You see this is the problem, people in the states are so used to locked phones that they think it is the norm. They think consumer should expect their phone to be locked to a certain network (ie: Ryan's comment and may others). This is simply a very old school type of thinking. If you look around the work, there's a lot of places where lock phone is either prohibited or never sold. These place are usually countries with the highest cell phone penetration rate and some of the cheapest calling plan in the world. I think it is time for the consumer in the USA to wake up to the fact that they are getting rip of by corporation like Apple and AT&T. Consumer in the USA need to rally their congress to band locked cell phone period (of course this apply if the phone is not subsidzed, I do agree that if it is, then the carrier has the right to lock the phone during the contract period.).
SUE THEM ALL - LET THE JUDGES SORT THEM OUT - Class Action please go full steam - when things don't change you can't start throwing your phone at jobs can you? maybe someone will - anyways - thanks to Apple for applying for more patents on the whole underlying touch screen pressure sensitive technology - good luck seeing another mfg bring out a phone with just a touch screen - someone make a slider instead - I know it's not the most elegant solution - but we gotta do it yesterday - it's not the JESUS PHONE it's the JUDAS PHONE!!! I SAID IT FIRST! TUESDAY OCTOBER 11TH 2007!!!
but yeah it's the JUDAS PHONE from now on I'm going to call it that - no matter what happens - it's the JUDAS PHONE!
Apple will lose this one then unlock all the iPhones for free and those that will be sold. Then more people will spring for the thing.
It's all been planned out by Steve Jobs himself!
Same thing as with video game consoles.
If you buy a PSP and then hack it to play NES games, you're breaking the terms of use, violating the EULA, and doing something they never intended you to do.
You're free to do it, but if you destroy the system it's YOUR PROBLEM. If you connect to the Sony network and update the console after you've hacked it, you have NO RIGHT to complain if the update bricks your device!
You certainly have no warranty, either.
You have the choice to accept the hardware as it was designed and intended, or to violate the terms of use and go on your own path... But the manufacturer is NEVER under any obligation to provide service to you if you do this. They are definitely not obliged to help you use their device in ways they did not intend.