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Bryan M. Wolfe
| October 22, 2012
Ending Locked iPhone Practice At Center Of New Suit Against Apple
Zach Ward and Thomas Buchar have filed a class action lawsuit alleging that Apple violated anti-trust laws by locking iPhone buyers into voice and data contracts with AT&T. The suit, filed in U.S. District Court in Northern California, was first reported by CNET. In a case that could have far-reaching consequences, the plaintiffs allege that Apple violated the Sherman Act, which prohibits monopolization. They believe that Apple didn’t get consumers’ “contractual consent” when they released the first iPhone in 2007, which was only available in the U.S. through AT&T until early 2011. As such, the plaintiffs are seeking monetary damages and a restraining order to stop Apple from “programming iPhones in such a way that would prevent consumers from unlocking their SIM cards.” In addition, they want Apple to provide SIM unlock codes to iPhone owners on request as well as an order “preventing Apple from selling iPhones without adequately disclosing that the handsets are locked and obtaining consumers' contractual consent for that arrangement.” This lawsuit is significant in that it the first to take on Apple, and not carriers, over this issue. The U.S. Supreme Court ruled in 2011 that consumers no longer have the right to file class action lawsuits against wireless carriers. In AT&T vs. Concepcion (PDF), the court ruled that a clause in the carrier's customer contract limiting consumers to arbitration instead of class action met the basic standards of fairness, according to the report. Most likely, this case could come down to the question of who is providing a service when a consumer makes an iPhone purchase -- the carrier or Apple? The last time I checked, terminating a contract meant giving money to a carrier. Am I wrong? Ward et al v. Apple Inc. As usual, we'll keep you updated. Source: CNET