California Judge Approves Class Action Against Apple & AT&T

This week, according to the Huffington Post, Judge James Ware of U.S. District Court for the Northern District of California has approved a class action, monopoly abuse lawsuit against Apple and AT&T. The class action brings together several individual claims filed by iPhone buyers dating back to late 2007. An amended complaint was filed in June 2008, the basis of which deals with Apple’s practice of “locking” iPhones so that they can only be used on AT&T’s network. The lawsuit also accused Apple of secretly making AT&T its exclusive iPhone partner in the U.S. for five years. Consumers who bought the iPhone were duped into a five year relationship with AT&T, after they had signed a two year contract with AT&T, and were essentially locked into staying with AT&T if they wanted to keep their phone. In addition, the lawsuit claims that the actions hurt competition and drove up prices for consumers . The lawsuit also seeks an injunction to prevent Apple from selling locked iPhones in the U.S. and from determining what iPhone programs people can install.

At the moment iPhone 4 consumers have three options to deal with the reception problem: 1)hold their phones in an akward manner; 2)return their phones and pay a 10% restocking fee; or 3) or purchase an Apple “bumper” case for their phones, which costs $29.99 on top of the premium their already paid premium. Without the class action iPhone consumers have no other leverage or relief. Here at the Brod Law Firm, we were wondering when something like this would happen two the largest companies in the U.S. For some time the public has not been properly informmed or even been made aware of corporate practices, and a class action case such is this is needed to force corporations to undertake informational campaigns, which would give consumers an opportunity to make educated decisions when purchasing products.

Most consumers do not fully understand how powerful these corporations are and how they may harm competition in the market. What is more, competition in the technology market is very different from competition in traditional markets. Specifically speaking, the technology market has powerful “network effects(FYI: the term ‘network’ refers to a common user base, not the physical wires or wireless systems that connect pieces of electronics).” What all this means is that the “first movers ( the term ‘first mover’ refers to the first significant company to move into a market)” in the technology market have an advantage over the “late movers” and rivals who have incompatible products–by setting up a dominant, proprietary standard-and, thus, make it difficult, if not impossible, to compete. If you feel that you been treated unfairly due to an iPhone 4 issue or have questions regarding any other defective product or class action issue, please contact our firm.