The controversy over Apple’s locking the iPhone has moved from the realm of hackers and pirates to the courtroom. It has been said that one lawyer with a briefcase can take more money than ten thugs armed with guns. Apple’s treasure chest may lose some pierces-of-eight if the suit is successful.
Lawyer Max Folkenflik filed a class action federal suit in Northern California alleging that Apple’s restrictions on the iPhone constitute unlawful competition, which falls under the antitrust laws of the United States. The Complaint is based on the idea that Apple is illegally bundling AT&T wireless service and Apple’s own software with the iPhone. Folkenflik argues that iPhone customers are being treated unfairly based on the fact that other mobile phone providers offer unlocked devices and lower carrier prices. Apple iPhone customers don’t have the choice to take advantage of carrier companies that compete with AT&T.
Folkenflik has the burden of proof to show that Apple dominates its market and that its bundling actions impede competition. This will be difficult to prove since the iPhone is a small portion of the national mobile phone market. To get around this Folkenflik has to show that the iPhone market is somehow separate from the general mobile phone market.
Folkenflik also alleges that Apple’s recent iPhone software update deliberately disabled non-Apple programs. Computer experts hired for the suit claim that the iPhone has a whitelist of approved Apple applications in the new software update. Folkenflik argues that the only purpose of the whitelist is to deliberately block programs not on the list, which may be a violation of trespassing laws. Apple says any blocking is inadvertent.
This law suit, and others similar to it that have been filed in state courts, may make Apple wish that it hadn’t locked the iPhone. But it will be difficult to overcome that fact that the U.S. market is awash in mobile phones, mobile devices, service providers and mobile applications. Customers willingly signed a contract for the iPhone and should have been aware that the iPhone has restrictions. I have little sympathy for people who get excited about the latest gadget, have to be the first to have it, and then feel buyer’s remorse when things don’t go their way. Before you buy a mobile phone ask intelligent questions, do some research and read the contract.
MobileCrunch has been following the iPhone controversy over the last few months. Click on Piracy below to read past stories and reader responses.