Antitrust Class Claims Apple Stacked Deck on iPhone Apps
Antitrust Class Claims Apple Stacked Deck on iPhone Apps
SAN FRANCISCO (CN) - Apple bills iPhone purchasers for voice and data services even after they cancel it, and stifles competition and increases prices for software apps by charging developers an annual "application" fee, consumers say in a federal antitrust class action.
Lead plaintiff Eric Terrell accuses Apple of "unlawful anticompetitive activities," and claims that consumers did not contractually consent to Apple and AT&T's 5-year exclusivity agreement.
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"Apple launched its iPhone on or about June 29, 2007," the complaint states. "Prior to launch, Apple entered into a secret five-year contract with ATTM that established ATTM as the exclusive provider of cell phone voice and data services for iPhone customers through some time in 2012 ('Exclusivity Agreement'). As part of the contract, Apple shared in ATTM's revenues and profits with respect to the first generation of iPhones launched. The plaintiffs and other class members who purchased iPhones did not agree to use ATTM for five years. Apple's undisclosed five-year exclusivity agreement with ATTM, however, effectively locked iPhone users into using ATTM for five years, contrary to those users' knowledge, wishes and expectations.
"To enforce ATTM's exclusivity, Apple, among other things, programmed and installed software locks on each iPhone it sold that prevented the purchaser from switching to another carrier that competed with ATTM in the cell phone voice and data services industry. Under an exemption to the Digital Millennium Copyright Act of 1998, 17 U.S.C. § 1201, el seq. (2008) (the 'DMCA'), cell phone consumers have an absolute legal right to modify their phones to use the network carrier of choice. Apple prevented iPhone customers from exercising their legal right by locking the iPhones and refusing to give customers the software codes necessary to unlock them."
http://www.courthousenews.com/2012/01/23/43244.htm