iPhone Antitrust and Computer Fraud Claims Upheld

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."

Comments

No one deserves this more than Apple

[linzeal]

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

Re:No one deserves this more than Apple

[MacDork]

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.

Re:No one deserves this more than Apple

[colganc]

If you hate it so much, don't buy their product. They would get the message really quick then.

Re:No one deserves this more than Apple

[Kagura]

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.

Re:No one deserves this more than Apple

[Graff]

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:No one deserves this more than Apple

[xouumalperxe]

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.

Re:No one deserves this more than Apple

[defile39]

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.

Good

[Darkness404]

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.

Precisely

[Sparks23]

Their statement was not 'we are going to brick other people's phones,' but 'if you have messed around in the baseband firmware, we can't promise this upgrade isn't going to break something significantly.'

They didn't set out to brick phones (and quite a few unlocked phones I know of took the firmware upgrade just fine). It was more a 'look, if you did this, you're on your own; we're not promising that this firmware won't completely break your modified phone.'

Which actually seems reasonably fair; if someone takes a car and decides to tinker in the brake system and try to come up with their own antilock braking system they feel is better, that's fine. But if they then have an accident, they can't realistically hold the car manufacturer responsible for the ABS they modified.

That said, the AT&T exclusivity contact may well verge on antitrust violations; IANAL, so I cannot really speak with any authority on that. However, restricting phones to specific carriers is pretty much par for the course. T-Mobile doesn't let you use the Sidekick on AT&T, nor the new Google Android phone that just came out. As far as I know, the Instinct is exclusive to Sprint. Etc.

So if they do rule that the AT&T exclusivity contract violates antitrust, I really do hope that decision can crack the practice of carrier exclusives overall. Forcing all phones to be sold unlocked, so that they can be taken to any other carrier with compatible cellular technology, would force carriers to actually focus on providing good service rather than relying on handset exclusives.

Re:Precisely

[MacDork]

Their statement was not 'we are going to brick other people's phones,' but 'if you have messed around in the baseband firmware, we can't promise this upgrade isn't going to break something significantly.'

Their statement went more along the lines of "We know this will brick certain firmware hacks and we will not be taking even the most trivial of steps to prevent that." They could have simply checked the OS and refused to install on a modified phone. Not only did they not do that, but Apple had the great big brass gonads to SAY they were not going to do that INTENTIONALLY. That goes beyond negligence. That's willful destruction. I'd Google the statement, but there's been so much iPhone hype since then, it is proving difficult to find.

Re:Precisely

[hobbit]

"Apple has discovered that many of the unauthorized iPhone unlocking programs available on the Internet cause irreparable damage to the iPhone's software, which will likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed"

(From http://www.google.com/search?btnI=I'm%20Feeling%20Lucky&q=iphone+apple+statement+firmware+modified)

It's really not Apple's job to be writing workarounds for jailbroken phones (and exhaustively testing them -- what if the workarounds adversely affected unjailbroken iPhones?)

However, I would argue it is Apple's job to design the iPhone such that no changes (other than physically invasive ones) can ever cause the phone to be "permanently inoperable". And if they can't provide information to the user on how to reset the iPhone to factory defaults, they should bear the burden of repairing it.

A crushing blow for Slashdot

[Anonymous Coward]

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.