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iPhone Antitrust and Computer Fraud Claims Upheld 273

Posted by ScuttleMonkey
from the everybody-hates-the-big-guy dept.
LawWatcher writes "On October 1, 2008, a federal judge in California upheld a class action claiming that Apple and AT&T Mobility's five-year exclusive voice and data service provider agreement for the iPhone violates the anti-monopoly provisions of the antitrust laws. The court also ruled that Apple may have violated federal and California criminal computer fraud and abuse statutes by releasing version 1.1.1 of its iPhone operating software when Apple knew that doing so would damage or destroy some iPhones that had been 'unlocked' to enable use of a carrier other than AT&T."
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iPhone Antitrust and Computer Fraud Claims Upheld

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  • by linzeal (197905) on Friday October 03, 2008 @05:10PM (#25251557) Homepage Journal
    They seriously need to be taken down a notch legally so they don't lawyer up at every opportunity.
    • by linhares (1241614) on Friday October 03, 2008 @05:16PM (#25251605)
      Steve seems to have got the same power-grabbing fever that Baby Bush [wikipedia.org] has.
    • by MacDork (560499) on Friday October 03, 2008 @05:20PM (#25251635) Journal
      They would certainly deserve it for willfully bricking unlocked iPhones the way they did, but this is the US were talking about. The only people who will see any benefit are the lawyers. The rest of the world will get a voucher at the Apple store online or some other equally lame appeasement.
      • by houstonbofh (602064) on Friday October 03, 2008 @05:26PM (#25251675)

        They would certainly deserve it for willfully bricking unlocked iPhones the way they did, but this is the US were talking about. The only people who will see any benefit are the lawyers. The rest of the world will get a voucher at the Apple store online or some other equally lame appeasement.

        $2.5 million in attorney fees, and everyone in the class gets a free iTunes download... Anybody willing to bet? Come on, anyone?

        • by Kagura (843695) on Friday October 03, 2008 @05:48PM (#25251841)
          I think the iPhone/AT&T locking is terrible. However, how does releasing a phone that is only licensed to work with a single cell carrier who is subsidizing part of the cost have to do with being a monopoly? Even if they weren't subsidizing the cost, why is this against the law?

          Note that I'm not saying it SHOULDN'T be against the law. Rather, I'm asking how it can be considered illegal under the laws we have today. I'm curious about the legal standpoint on this issue.
          • by xouumalperxe (815707) on Friday October 03, 2008 @06:11PM (#25252023)
            From reading at least part of the "article", what I gathered was the whole "oh look, you only have to sign for 2 years" while in fact there was a standing agreement between Apple and AT&T that Apple wouldn't provide access to other carriers for at least five years was a big no-no.
            • by defile39 (592628) on Friday October 03, 2008 @08:24PM (#25252965)
              It's an exclusive dealing contract - not necessarily a bad thing, but looking at the effect on competition, seemingly competition is hindered more than efficiencies are created. I don't think that the bricking of the iPhone is a big deal (but I haven't read the binding EULA, so I don't know if that kind of action is contractually authorized in the agreement). The big story here is, if this is affirmed, you will likely be able to get an iPhone on any number of carriers. This is actually GREAT for Apple as well (more sales). This is horrible for ATT, however.
            • Re: (Score:3, Informative)

              by shmlco (594907)

              "Apple wouldn't provide access to other carriers ..."

              Which, since since it's US law we're talking about, and since it's a GSM-based phone, I suspect the use of "carriers" (plural) is mistaken, as only one other mobile carrier in the US is GSM-based. (Leaves out Verizon and Sprint.) Further, in the case of the iPhone 3G, even unlocking the phone to use T-Mobile isn't much help, as T-Mobile's 3G network isn't frequency-compatible with AT&T's.

              • Re: (Score:3, Informative)

                by squiggleslash (241428)
                Verizon's announced plans to move to LTE (the 4G version of GSM.) It's quite conceivable that within two years both AT&T and Verizon will be rolling out their 4G LTE networks, and Apple will have released an iPhone 4G to go with it. So don't count out the possibility yet!
          • Re: (Score:3, Insightful)

            by Egdiroh (1086111)
            I am not a lawyer and I am not in this case. But I suspect there are two things coming into play here.

            1.) These phones CAN work on all those networks. So this restriction is completely artificial.

            2.) People already complain about the locking of iTunes to Apple Portable Players (iPod, iPhone). People complain about locking phones to networks. So the expansion to Itunes locked to apple players locked to AT&Ts network, probably just takes it a step to far, especially in light of reason 1.
            • Re: (Score:3, Insightful)

              by Kagura (843695)

              These phones CAN work on all those networks. So this restriction is completely artificial.

              There are SO many things in the cell phone industry that are arbitrary restrictions (like $0.50 text messages after you max your limit). Many other industries have this as well, like purposefully underclocked processors, and so forth. None of these are illegal, so I don't see why artificially tying the iPhone to AT&T would be considered illegal under current legal definitions.

              • Re: (Score:2, Interesting)

                by randomc0de (928231)

                so I don't see why artificially tying the iPhone to AT&T would be considered illegal under current legal definitions

                Seriously? Are you serious? Because there's an f'ing law against artificially tying products to services. It's illegal under current legal definitions because there's a law against it. Jesus.

                • by repvik (96666)

                  Like iTunes music to iPhones and iPods? I don't see Apple getting hit by that (Except possibly in Norway very soon)

                  • by tsa (15680)

                    The EU is also looking into that. And also into the fact that as a denizen of one EU country Apple doesn't allow you to buy anything at an online Apple store in another EU country. This is illegal since we have free travelling of people and goods within the EU. It's strange that Aplle has been able to get away with this practice for so long.

                • Seriously? Are you serious? Because there's an f'ing law against artificially tying products to services. It's illegal under current legal definitions because there's a law against it. Jesus.

                  No, there's only a law against tying if the party doing it has a dominant market share. The relevant market here is PDA phones, and Apple sure as hell doesn't have a monopoly in the PDA market. Maybe you should know your law before you start railing on others.
              • by jotaeleemeese (303437) on Friday October 03, 2008 @11:26PM (#25253827) Homepage Journal

                But people are not calling their bluff so far.

                Forcing people to buy one product in order to be able to buy another is a classroom example of an anticompetitive practice, which is banned in most civilized places, unfortunately most Apple fanboys are so wide eyed playing with their expensive toys that they fail to see they are being abused by the unholy alliance of phone maker and mobile telephony provider.

                As soon as some of them begin to wake up and smell the coffee complaints will follow and will, hopefully, end this most abusive "business model"...

                • Re: (Score:3, Interesting)

                  by xero314 (722674)

                  Forcing people to buy one product in order to be able to buy another is a classroom example of an anticompetitive practice, which is banned in most civilized places

                  As I mentioned above, this is not entirely true. Bundling products is perfectly reasonable and accepted in every country I know of. It's a matter of how that bundling is used. For example, a Ford dealer does not have to sell you a frame or body of a car separate from the engine, even though in many cases the engine that is supplied with the car is manufactured by another manufacturer (not 100% sure about for but I know that Lotus does that). My Apple computer comes bundled with an Intel processor, whic

          • by adam (1231) on Friday October 03, 2008 @06:30PM (#25252195)
            They're suing in relation to a breach of the Magnuson Moss Warranty Act of 1975, as well as the Sherman Anti-Trust Act.

            The Warranty Act is related to the product tieing, and bricking of unlocked phones. Essentially (and amongst other things) the MM Warranty Act says that it's illegal for a vendor to sell a product and require a tieing of services. From the FTC's web site:

            "Tie-In Sales" Provisions Generally, tie-in sales provisions are not allowed. Such a provision would require a purchaser of the warranted product to buy an item or service from a particular company to use with the warranted product in order to be eligible to receive a remedy under the warranty. The following are examples of prohibited tie-in sales provisions. In order to keep your new Plenum Brand Vacuum Cleaner warranty in effect, you must use genuine Plenum Brand Filter Bags. Failure to have scheduled maintenance performed, at your expense, by the Great American Maintenance Company, Inc., voids this warranty.

            They are arguing that tieing to AT&T, and then firmware releases bricking phones that have been unlocked to another carrier is an illegal/tortious act on the part of Apple. They allege Apple has told customers that downloading of unapproved software (but software that should be legal to install, under the MM act, imo) will void their warranty. Furthermore they have a vested financial interest in "approved" software from the Apple store, and obviously refuse to allow unlocking software to be included in that store. They refuse to provide customers who have lawfully canceled their AT&T contracts with unlocking codes so they may use their device with another carrier (again, covered by MM act). The list of allegations goes on. Full text of 15 USC Chapter 50 [house.gov], which is the section of the statute they have sued under (although I believe Title 16 - Commercial Practices, Chapter I - Federal Trade Commission, Subchapter G - Rules, Regulations, Statements and Interpretations under the Magnuson-Moss Warranty Act, Part 700 Section 102 also deals with warranty denials, text here [gpoaccess.gov]).

            They are alleging illegality on the part of Apple in that they monopolized the market for iphone applications, and also apple+AT&T for voice and data service monopolization. And of course the alleged illegality I spoke of above (services ties, denying consumers the ability to break these ties, pushing software updates that intentionally break the phones of users who have circumvented product ties, and then denying warranty coverage for these affected users)

            I hope that was somewhat helpful.

          • by SenseiLeNoir (699164) on Friday October 03, 2008 @06:33PM (#25252213)

            Because it breaks the idea of subsidies.I am not sure how these things are like in the USA, but here in the UK, when you buy a phone it is likely to be SIM Locked to the network as the cost of the phone is subsidised to the monthly contract.

            I am on T-Mobile (UK) myself.

            T-Mobile, Vodafone, Orange and 3, typically do that. They also typically customise the phone in such a way, to usually make it easier to use on their network. The customisations can be subtle in the case of T-Mobile (excluding the N95/VOIP fiasco), where the phone is not vastly modified, to outright butchery in Vodaphone/Orange, and 3.

            Nevertheless, once a phone is out of the subsidy period, it is YOUR phone, and legally you should be able to unlock it to all networks. In the case of T-Mobile (and I suspect the others) they will on request (and possibly for a small admin fee) provide you with the sim unlock code, to unlock the phone. I have heard that in many cases, they even gave the code, even before the subsidy term was over.

            T-Mobile promised the same deal for the upcoming G1 Android phone, in that it CAN be unlocked once the sub period is over.

            I personally buy my upgrades via Carphone Warehouse, as they source it idependantly, so phones are unlocked, and unbranded to T-Mobile, so I get the best of both worlds, a subsidised UNLOCKED phone.

            O2, intrestingly do NOT usually simlock their phones, unless its a specific O2 made phone. O2 is the UK's Exclusive network for the iPhone, and the iPhone is the first GENERAL phone O2 provides which IS simlocked.

            The point being is that, after the 2 year contract period with AT&T (or O2 in the UK) you STILL will not be able to unlock the iPhone, and use it with other networks, so in effect you still ARE locked into AT&T/O2. It is YOUR GSM phone, that has no TECHINCAL reason why it should not work on any other network, other than plain nastyness by Apple/AT&T/O2.

            This may not be totally legal in the UK (and same in the USA), especially as it is sold as a GSM phone. If Apple/O2/AT&T allows to unlock after 2 years, then they are ok, but something tells me that will not be the case.

            Note: this may be also why the Pay As You Go version was pulled from O2, as technically you own the phone straight away.

            • Re: (Score:3, Informative)

              by RMH101 (636144)
              The PAYG iPhone's on direct sale from O2 in the UK. http://www.o2.co.uk/iphone/paygo [o2.co.uk]

              I would expect to be able to phone O2 after 2 years of ownership and say "unlock this, please" and have them do it. Mind you, I'd also expect within 12 months to be bored stupid of my handset and have changed it for something else, and I expect their 2 year contract (which is otherwise unheard of in the UK) takes this into account and expects most users to swap out for an iPhone gen 3 in a year, and further extend their

          • by aliquis (678370)

            Yeah, just don't buy it if you don't want to accept how it's sold. I for sure wouldn't.

            • by rlk (1089)

              A lot of the problem is that people weren't told how it was sold -- like the fact that it's really permanently (er, at least 5 years) locked, not just for the life of the contract.

      • Um, a voucher plus the ability to use another carrier if they want to!
      • by Graff (532189) on Friday October 03, 2008 @05:54PM (#25251889)

        They would certainly deserve it for willfully bricking unlocked iPhones the way they did, but this is the US were talking about.

        The thing is that these phones were unlocked through exploits which placed the iPhones in a indeterminate state as far as updates went. It was a crapshoot whether or not an update would cause the phone to be unbootable. Everyone who unlocked their iPhone either understood this or didn't know enough about what they were doing and shouldn't have been doing it in the first place.

        If you hack ANYTHING then you should have no expectations that it will continue to be stable across software updates. You've made the choice to modify your device, you live with the fact that you may have broken it irreversibly. Now in the case of the iPhones it turns out that almost all of them were NOT bricked, they just had to be coaxed back to the factory software and you were good to go. There's even NEW unlocking software that you can apply for the latest version of the operating system. Of course the same caveat still applies: hack your device and you might ruin it.

      • Re: (Score:3, Interesting)

        Meh. It's still worthwhile if it creates a disincentive for Apple to do this.

      • Re: (Score:2, Funny)

        by ssintercept (843305)

        ...but this is the US were talking about.

        that is the beauty of the USA: you never know what you can get away with til you try!

      • The Bricking was caused by a bug in the unlock code. The unlock code resulted in a bad security zone. When the baseband was later upgraded, the security zone would fail verification and the phone was locked up.

        However, it wasn't "bricked", there were methods to recover from the bad upgrade, and later unlocks fixed the problem from the first one.

        There were other problems with various unlocks. One jailbreak resulted in every iPhone using that tool having the same MAC address.

      • Re: (Score:2, Interesting)

        by milkmage (795746)
        "willfully bricking unlocked iPhones the way they did" - they did? funny, mine was hacked to use another SIM (just to see if it worked).. and subsequent patches worked just fine. had to hack it again to continue using a TMo SIM - but it was never bricked. show me the source for your comment.
      • by DurendalMac (736637) on Friday October 03, 2008 @11:00PM (#25253705)
        Willfully bricking? Prove that. Go ahead. Try. You can't. Why? Because there's zero evidence that it was willful. Why in the hell should Apple test out every unsupported hack with firmware updates? Why should people who hack their hardware in warranty-voiding ways complain when bad things happen in updates? Yes, it does suck that Apple is locked to AT&T, but people knew that going in.
    • by HTH NE1 (675604) on Friday October 03, 2008 @05:26PM (#25251689)

      They seriously need to be taken down a notch legally so they don't lawyer up at every opportunity.

      Everybody has a right to an attorney. Even a corporation.

      (And even an unlawful enemy combatant, but that's another topic for another time.)

    • by Anonymous Coward on Friday October 03, 2008 @05:39PM (#25251759)

      Nothing has been "Upheld", all that has happened is that the court denied Apple's 12b6 motions for dismissal. (Failing to state a claim upon which relief can be granted.)

      This case is still pre-trial. Discovery has not happened yet. Apple can still file for summary Judgment.

      If the complaint survives Apple's inevitable motion for summary judgment, then the case will go to trial. Then there will be appeals.

       

    • by IdahoEv (195056)

      As a full-time Apple user with three macs and an iPhone ... I couldn't agree more.

      I love their products, I hate their politics and Gestapo behavior with respect to consumers and the market.

      The NDA gag-order on the iPhone SDK got dropped**, and in the same week their monopolistic practices got nailed by the courts. Happy Apple consumer.

      **out of fear of developers going to Android, no doubt.

      • by colganc (581174) on Friday October 03, 2008 @05:46PM (#25251825)
        If you hate it so much, don't buy their product. They would get the message really quick then.
        • Re: (Score:3, Insightful)

          by IdahoEv (195056)

          If you hate it so much, don't buy their product.

          I'm a little entrenched and short on options for that approach. I have about 15 years of time, experience and thousands in software invested in working with their platform(s).

          Products I love from a company with some policies I hate is still a better than my other option: products I hate from a company I also hate.

          If I spent a few thousand to get new copies of all my Adobe stuff, I could in principle switch my business over to Windows. Hooray. Then I'd dete

          • Re: (Score:3, Insightful)

            I have about 15 years of time, experience and thousands in software invested in working with their platform(s).

            First of all, I imagine at least a few hundred of those thousands are from things which simply aren't needed on other platforms. I'm talking about things like AppZapper here -- Apple has this community of shareware that just looks weird, coming from Windows and Linux.

            Second, OS X hasn't been out 15 years. Since OS X, if your experience is more than skin deep, you know Unix. And I'm really not sure how much OS9 has in common with OS X, in terms of your skillset.

            Finally, the stuff you have doesn't magically s

        • Re: (Score:2, Funny)

          by chromatic (9471)

          If you hate it so much, don't buy their product.

          Macholm Syndrome?

        • by Lally Singh (3427)

          Yeah... but have you seen how shitty the other stuff is?

    • This isn't just about Apple. The document cites, for example, that AT&T Mobility does not (or is not required to) subsidize the cost of the iPhone, contrary to standard industry practice, yet they still charge a $175 early termination fee.

      I am with the court on this one! Early termination fees only make sense if the carrier is subsidizing the cost of the handset.

    • by Anonymous Coward on Friday October 03, 2008 @06:51PM (#25252351)

      All the Slashdotters who mod people down for pointing out that Apple is, was, and always will be a far more brutal monopoly than Microsoft have been dealt another crushing blow by reality.

      Yes, we all know they make nice shiny electronic gadgets. But that doesn't justify their monopolistic behavior, no matter how much someone may hate Microsoft. Two monopolies doesn't make it right, and the GPL-based monopoly the Stallmanistas are trying to create will be no better.

    • They seriously need to be taken down a notch legally so they don't lawyer up at every opportunity.

      Uh. Being taken down a notch legally makes a company (or person) generally more prone to "lawyering up", in any reasonable sense of the phrase, early and pre-emptively in any future circumstances where legal action might potentially occur. So I don't follow the logic, here.

  • Good (Score:5, Insightful)

    by Darkness404 (1287218) on Friday October 03, 2008 @05:10PM (#25251563)
    This is excellent news for consumers. About the only area that technology is seriously lacking in, is cell phones. And it isn't because we don't have the capability, the iPhone and Android platforms proves that it isn't the case, but rather it is the cell phone companies.
    • Re:Good (Score:4, Interesting)

      by houstonbofh (602064) on Friday October 03, 2008 @05:27PM (#25251691)
      People forget that when it comes to phones, "we" are not the customer. Verizon is the customer, and we are the product.
    • Re: (Score:3, Funny)

      by Shadowlore (10860)

      Sure, because the telcos have been the epitome of advancing the technology, and implementing technology. Their extremely honest willingness to let you use your bandwidth as you see fit, to let you use VOIP w/o extra pain and cost, to bill you such a very low rate for basic text messages that pager companies were letting you send a decade or more ago prove that it isn't the telcos putting down the rules on their networks, but the dastardly cell phone makers refusing to implement such cool technology.

      • Re:Good (Score:5, Interesting)

        by IdahoEv (195056) on Friday October 03, 2008 @06:11PM (#25252027) Homepage

        Their extremely honest willingness to let you use your bandwidth as you see fit, [etc.]

        ...and their ability to keep up with the industry in other countries. A couple years ago I was shocked to hear that Korean, Scandinavian, and Japanese homes were regularly getting inexpensive > 100 Mb/s data lines. Last week, /. reported that Japanese telcos are rolling out Gigabit fiber for $55/mo.

        And yet this week one of my clients is still struggling to get a reliable 1 Mb/s connection to their office, right here in the middle of Los Angeles. They are currently paying $150/mo for a DSL line that ain't working. Even if it worked, that's almost a factor of 3000 increase in the cost per Mb/s relative to the new stuff in Japan.

         

  • by DreadfulGrape (398188) on Friday October 03, 2008 @05:12PM (#25251581)

    So that's what gave Jobs the heart attack...

  • clarification (Score:2, Insightful)

    by larry bagina (561269)
    per the first paragraph, the AT&T/Apple restriction is ok, but they [might have] imposed other limitations after the 2 year contract (umm, which hasn't ended for anyone yet).
    • Re: (Score:3, Interesting)

      by Anonymous Coward

      per the first paragraph, the AT&T/Apple restriction is ok, but they [might have] imposed other limitations after the 2 year contract (umm, which hasn't ended for anyone yet).

      If someone purchases an iPhone and ends their two year contract after they pay the applicable fees associated with an early ended contract, is it against "computer fraud and abuse" to not allow them to use their hardware?

      Recently Sprint was forced into allowing its customers to unlock their phones [cnet.com]. So, applying that logic, if I own an iphone (and am not renting it from AT&T, is it not an abuse of law to release a patch to hardware which intentionally damages my property?

      Sorry if that didn't make sense.

  • by Bobartig (61456) on Friday October 03, 2008 @05:20PM (#25251629) Homepage

    People on other carriers that want to use the iPhone?

    People who were "compelled" to get an ATT account to use the iPhone?

    People who didn't get an iPhone because of the exclusivity?

    Who *wasn't* damaged?

    Just for the record, I have an iPhone, I was already with ATT, and Apple should have figured out that this might have been illegal beforehand.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      This is not a scenario to the iPhone. Similar exclusivity deals have been made with plenty of other phones and you'll find this kind of practice all over the place.

      For whatever reason, people are so crazy over the iPhone that they feel its their right to have one on their own terms while there are plenty of more open alternatives on the market.

      • by HTH NE1 (675604)

        Precedent has to be set somewhere. You just have to pick a battle you think you have the best chance to win.

      • Re: (Score:3, Interesting)

        by peragrin (659227)

        That is what really gets me. AT&T and Apple's deal isn't abnormal in the cell phone industry. Certain phones don't show up in certain regions because of such deals.

        The big plus of this whole lawsuit is that all this will be made public and the cell phone industry will be forced to change. Like Apple broke open music downloads by forcing an industry to be more open (and closed), maybe this lawsuit will break open the cell phone industry. Of course it won't be apple leading the charge but defending t

    • by mr_matticus (928346) on Friday October 03, 2008 @05:39PM (#25251765)

      D. None of the above.

      People who bought the iPhone and are allegedly stuck with AT&T for five years as a result, despite having agreed to a two-year contract.

      The exclusivity agreement, according to the complaint, prevents any iPhone customer from going anywhere else once their contract is up. The problem is that (a) no one's contract has expired, so there is no evidence for or against Apple and AT&T as to what happens at that time, (b) there are already tools to unlock the iPhone and use the device on other networks, which, after the AT&T contract and the product warranty expires, Apple could not care less about for end users, and (c) the "legal action" discussed does not extend to people unlocking their handsets for the purpose of lawfully connecting them to another provider's network.

      This, furthermore, is not a finding of fact or law. It is not an opinion. It is simply a rejection of a dismissal motion. It by no means suggests the final outcome, nor does it endorse any of the allegations made by the plaintiffs. It is entirely possible that this suit will be dismissed further along in the discovery process, dismissed during trial, or that Apple/AT&T will win at trial. It will likely provide nothing of value to consumers either way, with the possible exception of an announcement of an "official" unlocking tool for customers whose initial contracts have expired.

      It is important to note that such a tool being offered upon completion of your term commitment would entirely moot this case.

      • You hit the nail on the head. You have signed up to a 2 year compulsory contract, yet you have (at least) a 5 year hidden contract, as you will NOT be able to use the phone on any other network, shoudl you wish to move. (this is on the assumption that after their exclusive deal is up, they will actually allow firmware updates to unlock the simlock, which I seriosuly doubt).

        So yes, it stiffles competition, as people are likely to remain on AT&T just to use their iPhone, even after the 2 years is up.

    • "Who *wasn't* damaged?"

      People smart enough not to buy one.

  • Wait... what? (Score:5, Interesting)

    by pushing-robot (1037830) on Friday October 03, 2008 @05:24PM (#25251661)

    I have a hard time seeing how the iPhone could be considered monopolistic when it has such a small market share; you can't have a monopoly by law unless there are no good alternatives to your product.

    On the other hand, I'd love to see an end to the AT&T exclusivity agreement and unlocked iPhones for sale in the USA. I hope this case leads to more than just punitive damages.

    • Apple's marketing seems to state pretty strongly that there are no good alternatives for to the iPhone.

      • Re: (Score:3, Funny)

        by LandDolphin (1202876)
        And the Tabacco companies told us that Cigarettes are good for you.
    • MS was slammed by the EU over server software when it wasn't (and still isn't) the market leader.

  • by darkmeridian (119044) <william@chuang.gmail@com> on Friday October 03, 2008 @05:34PM (#25251735) Homepage

    The title of the article discussed a motion to dismiss. The article itself was slashdotted, but a motion to dismiss only means that the lawsuit is allowed to continue. The holding only means that the complaint states a legally-cognizable cause of action, and does not address the substantive merits of the plaintiffs' (as it was a class action) case aside from that.

    I would like to know if this was filed under the federal antitrust statutes or the California antitrust laws. If it is the former, than the decision would have national implications and Apple may lose significant amounts of money if it is found liable of anti-competitive conduct.

    Moreover, if the contract between Apple and AT&T Mobile is ruled in violation of law, does AT&T owe Apple money anyway, or are they just going to sue each other? This will be fun to see.

    • by dgatwood (11270)

      What I hope comes out of it are the following findings:

      • Customers have a fundamental right to unlocked phones except during a contractual subsidy period.
      • Telcos are required to provide unlock codes at the end of the subsidy period, with no exceptions. (It is then incumbent upon them to require the hardware manufacturers to provide those codes as part of their contractual agreements.)

      I have mixed opinions on the other issues being argued, but my opinion on the unlocking thing is that AT&T needs to be

  • Antimonopoly? (Score:5, Interesting)

    by MMC Monster (602931) on Friday October 03, 2008 @05:38PM (#25251753)

    Apply iPhones are a small fraction of all smart phones, let alone all phones.

    AT&T/Cingulair has at least a couple viable large competitors in most markets in the U.S.

    How the heck is this a monopoly?

    • They're a 0% percentage of smartphones. Jobs redefining the term doesn't make a phone whose software is controlled by the manufacturer a "smartphone".
    • How the heck is this a monopoly?

      You know, you could read the linked article - it explains it fairly clearly.

  • Will the Psystar law suit end going the same way?? as apple is locking mac os to it's hardware and useing software locks like how apple is locking the I-phone to ATT sim cards.

  • by jakethejuggalo (718693) on Friday October 03, 2008 @05:40PM (#25251777)
    Wouldn't this ruling apply to Verizon phones also? They're technologically the same as sprint phones, but if you switch from Verizon to Sprint or vice-versa, you can't use your phone on that new network. What's the difference between that situation and wanting to use the iPhone on t-mobile?
    • by cdrguru (88047)

      I have a Windows application that I used for many years that is technologically the same as any other Windows application today - both run on the x86 processor. However, for some reason that is a complete mystery it does not work today. Funny, it worked fine in 1995. Could there be some subtle difference, other than the base underlying technology between windows 3.1 and Windows Vista?

      That is pretty much what you are saying. CDMA has been heavily customized by the carriers so there is no carrier-to-carri

  • Point five is false. (Score:3, Interesting)

    by argent (18001) <peter@NOsPam.slashdot.2006.taronga.com> on Friday October 03, 2008 @05:47PM (#25251829) Homepage Journal

    The original iPhone WAS subsidized by AT&T. The fact that it was only available with AT&T service, so there was no unsubsidized price listed, doesn't mean there wasn't a subsidy.

    I imagine Apple will appeal on this basis at least.

    • The fact that it was only available with AT&T service, so there was no unsubsidized price listed, doesn't mean there wasn't a subsidy.

      There's only one single company - ATT - through which Apple's iPhone is available, due to an exclusive contract signed between the maker and the service provider.
      What does best qualify as a monopoly ?

      I can't imagine how could Apple appeal on that.

      Compare this to Europe, where anti-trusting laws where applied.
      Here in Switzerland, the iPhone is available in subsidized form from 2 of the 3 phone operators. And in addition is available in unsubsidized form with "bring your own sim" no phone plan at-all.
      You have

      • There's only one single company - ATT - through which Apple's iPhone is available, due to an exclusive contract signed between the maker and the service provider.
        What does best qualify as a monopoly ?

        I'm not even addressing the question of whether there is a monopoly or not.

        I am addressing the question of whether there was a subsidy or not.

        These are different words. Look them up. I'll wait. "Monopoly". "Subsidy".

    • My wife and I paid $600 each for our first-generation iPhones. If that was subsidized, I'd like to know what the unsubsidized price would have been.

      We've been enjoying them very much, but neither "subsidized" nor "inexpensive" normally occurs to me as appropriate adjectives.

  • How is this any different than any of the other phones out there that are available exclusively through one provider or another? (Samsung Instinct etc) While I'd love to see the cell phone company walls come down, I don't think Apple is doing anything different than everyone else in this case.
  • Some on Slashdot are fond of describing MS as a "convicted monopolist" which is incorrect since the action taken against them was strictly civil. Wouldn't it be mind-bending if they could accurately describe Apple that way some day?

  • Bad summary (Score:4, Insightful)

    by torstenvl (769732) on Friday October 03, 2008 @07:03PM (#25252449)

    As darkmeridian said above, this is just denying a MTD. MTDs are filed in every case, ever, and they are denied in the vast majority of them.

    Nothing to see here, move along.

  • by algae (2196) on Friday October 03, 2008 @07:23PM (#25252585)

    Thanks a lot for linking to an article that puts perfectly good plaintext info into a craptastic, poorly supported, embedded flash image that won't even load in 64-bit linux. Scribd sucks so badly it makes black holes jealous. There's already a document format for the internet, fuckers - it's called HTML. Might look into it.

  • by Nom du Keyboard (633989) on Friday October 03, 2008 @08:21PM (#25252937)
    I hope Apple and AT&T get so ripped to shreds over this that nobody else will ever try this monopoly shit again out of fear that it could happen to them too!
  • by earlymon (1116185) on Friday October 03, 2008 @09:06PM (#25253195) Homepage Journal

    It's common /. knowledge that Apple + AT&T lock-in is pure evil - I agree with this knowledge, fwiw.

    And it was evil of Apple to break hacking iPhones restricting user freedom.

    On the other hand, maybe....

    1. Apple saddles up AT&T to break into the phone market.
    2. AT&T goes for it. Apple Board of Directors is appeased; if iPhone fails somehow, how were stockholders not protected by the new venture, given Apple's attempt to partner with the phone giant?
    3. Many people are offended and alienated by this, however, the fact remains:
    4. iPhone sales are a tech phenomenon.
    5. Apple keeps AT&T happy by breaking hacked iPhones. See point 4 for how this affects Apple's bottom line. Note that AT&T never publicly complained.
    6. Apple waits for it to be the court's fault that they have to open things up for other carriers.
    7. Apple expands its iPhone market without violating the AT&T agreements for hegemony.

    If you've spent much time at all in Silicon Valley, this kind of thinking and planning isn't so outlandish.

    And truth is most often stranger than fiction in the tech industries.

  • by TRRosen (720617) on Saturday October 04, 2008 @12:48AM (#25254211)

    Do other carriers have EXCLUSIVE phones? Yes. although its hard to notice when they release 3 new phones a week.

    Can I buy a Nextel phone to use on Verizon's network? No.

    When a Windows update crashes because a third party diver was installed does Microsoft get sued? No.

  • progress! (Score:3, Funny)

    by Eil (82413) on Saturday October 04, 2008 @01:27PM (#25257095) Homepage Journal

    Back in the late 19th century when the landline telephone network was relatively new, the telephone industry naturally looked quite a bit different than it does today.

    1. You couldn't simply buy a new telephone in any store, you could only rent one from AT&T along with a monthly service plan.

    2. You could only use AT&T phones on their network. No other third-party phones or devices were allowed. They would repossess your phone if they caught you doing anything "unauthorized."

    3. There was no other phone company to choose from, so if you wanted a telephone, you were stuck with AT&T.

    This is in stark contrast to today's high-tech wireless cell phone industry, where you are only subject to a few comparatively minor restrictions if you would like to use the most advanced phones currently on the market, the iPhone.

    1. You can't simply buy a new iPhone in any store, you can only purchase one from AT&T along with a monthly service plan.

    2. You can only use AT&T/Apple-approved software on the iPhone. No other third-party software or applications are allowed. They will brick your phone if they catch you doing anything "unauthorized."

    3. There is no other cell carrier to choose from, so if you want an iPhone, you are stuck with AT&T.

    What bleak times those must have been!

    (P.S. Before I'm deluged with pedantic replies: yes, there are indeed other cell phones than the iPhone and cell phone providers than AT&T on the market. I'm just having a bit of irony here, let me be.)

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