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Apple faces lawsuit for locking phones to AT&T

Two persons are suing Apple for allegedly violating the Digital Millennium Copyright Act and the Sherman Act because it failed to get customers’ nod to lock their iPhones to AT&T service.

The pair wants to bring their  disagreement against Apple’s policy to the court because they want to unlimber their phones from AT&T’s network.

Thomas Buchar and Zach Ward filed a case in U.S. District Court in Northern California before last weekend, claiming that the iPhone maker broke the antitrust law by forcing customers to pick data and voice contracts with AT&T Mobility. The case centers around the pair’s claim that Apple violated the Sherman Act that prevents monopolization by not getting permission from their customers to have their iPhones tied only to AT&T when it agreed into an exclusivity agreement with AT&T back in 2007.

The agreement allows Apple to install a special software into iPhones so customers cannot use services of other wireless carriers, said the lawsuit. Such practice, according to the case, goes against the Digital Millennium Copyright Act, which states in one of its provisions that an exception can be made for owners to modify their gadgets so they use other wireless carriers .

“Through these actions, Apple has unlawfully stifled competition, reduced output and consumer choice, and artificially increased prices in the aftermarkets for iPhone voice and data services,” the  lawsuit claims.

The case asks for monetary damages as well as a restraining order that should bar Apple from installing software that would not allow iPhone owners to unlock  their SIM cards. The pair also asks that Apple provides codes that would unlock their SIM cards to be unlocked upon requests, and an order to oblige Apple to inform their customers that their phones are locked.

The new case is no longer a surprise as previous lawsuits against wireless carriers had been hugely unsuccessful due to a Supreme Court ruling in 2011 barring class-action lawsuits against  wireless carriers. The AT&T vs. Concepcion case ruled that the wireless carrier’s contract clause limiting consumers to arbitration in place of class-action lawsuits had met the minimum requirements of fairness standards.

The case against Apple, however,  takes a different approach as it tries to target the wireless carrier. It is not immediately known whether or not Apple has a similar clause in its customer contract.

The class-action suit brought by Zach Ward of Los Angeles and the Chicago-resident Thomas Buchar addresses the devices they purchased between October 19, 2008 and February 3, 2011. observers of the case say some of the circumstances the lawsuit want to raise are no longer relevant due to changes made by Apple and AT&T, although Apple can still be made to pay for damages being sought.

The first three versions of Apple’s iPhones–iPhone 2G, 3G, and 4–were locked on AT&T and needed a special code to be unlocked so they can be used on  other carriers.

Apple later released an iPhone 4 version in February 2011 that worked on Verizon network. Only in June 2011 did Apple began selling unlocked iPhones in the United States.

source: cnet