Class Action Lawsuit Filed Over iBricking -- Violation Of Antitrust Law?

from the always-gotta-sue dept

Mon, Oct 8th 2007 12:41pm — Mike Masnick

While the last class action lawsuit over the iPhone was pretty ridiculous -- claiming that the rapid price drop was illegal -- this latest one may have a bit more substance behind it. One of the victims of the infamous iPhone iBricking update has now filed a class action lawsuit against Apple, claiming that the iBricking action was a violation of California law. The specific arguments are a bit complex, but basically, the guy is claiming that in locking the handset to one carrier, Apple violated sections of the Cartwright Act, which is designed to prevent companies from creating artificial market barriers on products they sell in order to boost the price. On top of that, the lawsuit notes that unlocking a phone for use on other networks is perfectly legal under last year's DMCA exemptions. Therefore, to then brick the iPhones that were unlocked violates the California law, saying that it's illegal to take actions that "substantially lessen competition or tend to create a monopoly." It may be a bit of a stretch to say that applies in this case, and Apple can simply plead (reasonably) that the iBricking was not on purpose, and that the company has no requirement to support unlocked handsets -- but if this case actually does get some traction, Apple may need to be a bit more careful in future firmware updates.

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Filed Under: antitrust, class action, iphone, unlocking
Companies: apple

26 Comments

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Jordan, 8 Oct 2007 @ 1:15pm

The iPhone bricking was on purpose...
Phones don't just brick themselves because of simple unlocking. Look at the RAZR. I have unlocked several RAZRs and then gone and updated them without bricking them. What the lawyers of this case have to do is find out what programmers coded this firmware update, and get them to testify in court that Apple told them to write an update that would brick unlocked iPhones (which is obviously what happened) They can't legally lose their jobs for telling the truth in court if subpoenaed.
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John Doe, 8 Oct 2007 @ 1:22pm

I think Apple should have made two types of phones like any big cell phone company does. One that is locked to a carrier and another that is unlocked. I also think that apple should allow people who want to unlock the phones that freedom, therefor allow user who got the phone w/ the newer firmware the ability to downgrade. I mean user who have the old FW are now selling their phones at high prices and making a profit.

But anyways, I do not run apple so they can do what they want with their company. If you don't like their business practices, then don't buy their stuff.

I do how ever find is funny that the iphone FW is coded to allow 3 unlocks on the 1.02 FW.
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BillGod, 8 Oct 2007 @ 1:40pm

WHAT
It's not apples fault the firmware upgrade killed iphones. It's not the unlocking of the phone that broke them its the latest firmware upgrade. You cannot possibly expect apple to "be more careful of firmware updates" If there are 100 ways to unlock your phone apple cannot possibly test functionality on all of them. Besides it's not their responsibility to do so. YES they made a product and locked it down to only sprint. That sucks and was a stupid mistake. You took your iphone and voided the warranty on it now your pissed its broke. Tuff shit. I would never call up Microsoft and tell them my modded Xbox wont play a game properly and it's all their fault.
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GeneralEmergency (profile), 8 Oct 2007 @ 1:43pm

1.0.2 and holding...
I have three iPhones and they will all stay at 1.0.2. until an iPhone clone handset becomes available and OpenMoko or QTopia is modded to be iPhone-i-licious.

Sadly there are serious Safari and BlueTooth vulnerabilities in the 1.0.2 release.

Who is going to file the suit that forces Apple to release an update that ONLY fixes these problems AND NOTHING ELSE??

Throw that party and I'll sign on to that class action suit!
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Anonymous Coward, 8 Oct 2007 @ 1:45pm

> You cannot possibly expect apple to "be more careful of firmware updates" If there are 100 ways to unlock your phone apple cannot possibly test

But I can possibly expect apple to say "Oops. We couldn't possibly test this, so we screwed up your phone.Sorry about that, here's your money back."
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Anonymous Coward, 8 Oct 2007 @ 1:56pm

I just want the DISCOVERY phase.
If the suit does go forward we can look forward to the discovery phase. Apple's comments so have have left a lot of speculation about whether the bricking was intentional or if it could have been easily avoided. However, if this goes to discover then someone from Apple is probably going to have to go under oath and make a definitive statement. Plus we may get to see emails or other evidence about the process involved in developing the patch.
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Anonymous Coward, 8 Oct 2007 @ 1:56pm

so you are saying it is ok to change the firmware of device that was designed to operate a certain way using that firmware and if you change it the vendor should give you your money back?

Come on. Let's say you buy a car and put in a different chip to mod it for better performance and in doing so you cause an engine malfunction. The car manufacturer is not going to repair your car for free.
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Anonymous Coward, 8 Oct 2007 @ 1:58pm

Re:
Yep, screw a free market system...if nobody bought the damned thing it would have become multi carrier. They sold millions, so the market has told them loud and clear we are fine with it. If it was bricked too bad, they have to prove it was intentional with a preponderance of evidence.

You reap what you sow.
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Anonymous Coward, 8 Oct 2007 @ 2:00pm

Re:
Insert stupid you can't compare those here because that would make me responsible comment.

wait for it...you have built it, they will come.
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Jordan, 8 Oct 2007 @ 2:01pm

RE: WHAT
BillGod, you seem to buy in to the idea that this was just some accidental side effect of a firmware update. There is no major difference between an unlocked phone and a locked phone-its still the same phone, capable of running the same software(as well as extra software). Nintendo tried scaring users into believing that a firmware update might brick modified wiis, but the fact is that even with a modchip, few, if any, wiis were bricked. Unless the firmware is intended to brick modified devices, it wont.
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Anonymous Coward, 8 Oct 2007 @ 2:14pm

Actually...
The DMCA says that it is legal to unlock a phone from a carrier yes, but what the articl fails to mention is that it is illegal to distribute unlocking software.

AKA, You are allowed to unlock the phone if you can write the software yourself, but you cant get it from someone else or give it to someone else.

Unlocking-legal, Unlocking software-illegal
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Jordan, 8 Oct 2007 @ 2:19pm

What about remote unlocking?
What about sites that offer remote unlocking? They aren't technically distributing the software. Besides, this case isn't against the people distributing the software, it's against Apple for distributing software that intentionally broke their products.
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Anonymous Coward, 8 Oct 2007 @ 2:36pm

Re: RE: WHAT
It is probably difficult to ibrick the device if it's not intentional :

If you overwrite the whole of the software build the result will work as a standard Apple build (yo'd want to unlock it again).

If you overwrite only parts of the build you might have a problem in that only part of the unbricking remains (or perhaps it all remains but the new code doesn't work with it) but then you only need to reverse those parts of the unlock whch remain to restore a standard Apple build (the new build).

To get a permanent brick you either a) have unlocking software that interfers with the upgrade process (which I guess is unlikely since that's nothing to do with the purpose of the unlock) or b) it's deliberate.
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TheDock22, 8 Oct 2007 @ 2:39pm

It will never go to trial
The laws in California can say whatever they want about the legality of tying a product to a service, but in the end they can not over rule Apple's decision to brick the phones with this update.

Apple and AT&T have an exclusive, legal, and (more importantly) binding contract saying that Apple agrees to release the phones with only AT&T being able to provide service. This is legal for these two companies to do. In order for Apple to keep up its end of the bargain, they decided to disable phones that had been hacked which is completely legal to do. This won't go to trial because there is no case. The people who bought the iPhone essentially agreed to the contract Apple had with AT&T and that is all the courts need to know.
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Chronno S. Trigger, 8 Oct 2007 @ 3:13pm

Re: It will never go to trial
First, I agree that this will never go to trial.

Secondly, If the iBricking and, in general, the exclusive deal with AT&T is deemed illegal, than it doesn't matter what they signed. If the act is illegal than the contract is null and void.

This needs to be added to the urban dictionary

iBrick - a device that had been rendered inoperable due to an upgrade that was not tested with custom software.

PS: it is vary possible that the unlocking software removed or changed (intentionally or unintentionally) something that the upgrade is looking for which would cause it to go into a loop and not work.
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Anonymous, 8 Oct 2007 @ 3:14pm

Apple not reposnsible
While the DCMA gives you the right to unlock your phone, it makes no provisions about future support. Once you have unlock your iPhone, Apple is under NO legal responsibility to support it with warranty or updates.

Apple went so far as to publicly warn people against updating an unlocked iPhone, and the morons did it anyway. Wether the patch was intentional or not doesn't change that Apple told you not to unlock it, and if you did, not to install the last firmware update.

Your just too stupid to listen.
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Anonymous Coward, 8 Oct 2007 @ 3:19pm

Re: WHAT
YES they made a product and locked it down to only sprint.
You don't know what you're talking about.

Tuff shit.
And you have a potty mouth.
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Anonymous Coward, 8 Oct 2007 @ 3:24pm

Re: It will never go to trial
I haven't looked at the license agreement, but I seem to recall someone saying that you have to agree to the AT&T terms of service when activating the iphone in itunes. If this is true, then the customer did not agree to the AT&T contract until activation, and if they did not agree to the AT&T contract, then there is no merit in your statement. 3rd parties cannot be expected to agree to a contract between 2 other parties unless an agreement is signed. So like I said, it all depends on what the purchaser had to sign in order to buy the phone and if those documents can actually be produced in court.
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Jordan, 8 Oct 2007 @ 3:25pm

Why do people keep saying Sprint?
Its AT&T people (formerly Cingular), not Sprint...
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Anonymous Coward, 8 Oct 2007 @ 3:36pm

Re: Apple not reposnsible
Your just too stupid to listen.

You're just too stupid to spell "you're".
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GeneralEmergency (profile), 8 Oct 2007 @ 4:11pm

Agreeing to License Agreements???
Several folks here keep referring to a supposed fact that iPhone buyers have entered into some form of legal licensing agreement with their iPhones. While this may be the case for most people, it is not universally true.

I bought my iPhones as refurbs direct from Apple. There was never any 'Activation' or AT&T signup via iTunes and never any click thru agreements due to the use of various software hacks, tricks and workaraounds available. --I-- am under absolutely no obligation to either Apple or AT&T. The iPhone is mine to do with as I wish.

That said, I realize that Apple owes me nothing either...EXCEPT...

...that Apple does have a moral and ethical obligation to the compusphere to fix security holes in its products. The 1.0.2 version has several Safari vulnerabilities and one very nasty BlueTooth hole. Apple needs to release a patch to fix these holes (and ONLY fix these holes) if it wishes to remain a good "computing security citizen".
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BrooksT, 8 Oct 2007 @ 4:58pm

Intent does matter.
I'm surprised that Techdirt would cavalierly state that "Apple can simply plead (reasonably) that the iBricking was not on purpose, and that the company has no requirement to support unlocked handsets."

Doesn't it depend on whether that pleading is, you know, true? If there's an internal email that says "we know it's legal for consumers to unlock the phones they bought, and the current dev version of the new firmware works on unlocked phones, but we need to update that so it bricks them"... wouldn't that be pretty flagrantly illegal?

Sure, Apple has no responsibility to support unlocked phones, if the unlocking causes problems. I don't know about other states, but I'm pretty confident that California's warranty laws would prevent Apple from, say, refusing to replace a defective LCD on the basis that the phone was unlocked.

And seeing as how people spent hundreds of dollars to purchase a product, and the law explicitly says they are allowed to unlock that product, intentionally and maliciously breaking the product in an "update" strictly to punish those people who chose to excercise their right seems pretty actionable to me.

If it genuinely was inadvertent, or even wink wink accdental, sure, Apple is just operating normally. If the bricking was planned, intentional, and not the side effect of other changes, I'd have no problem with them being put through the legal wringer.
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Julian Bond, 9 Oct 2007 @ 2:08am

Business model
"creating artificial market barriers on products they sell in order to boost the price."

Isn't that Apple's entire business model?
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Fraust, 9 Oct 2007 @ 9:28am

Rotten Apple
To some, the iPhone is a wonder of innovation and worth the high price. What Apple has done is a marvel of capitalism:

1.) Create a stylish product that looks good but doesn't do critical things that regular cell phones do very well.

2.) Sell the iPhone at full price (unsubsidized) while at the same time, locking customers into a two year exclusive contract with AT&T.

3.) Prevent developers from creating applications for use on the iPhone, thereby inhibiting it from doing things that less expensive smart phones do easily.

4.) iBrick hacked phones with a software update to prevent them from being unlocked and used on other networks.

Those who hacked their phones should've seen this coming and simply not downloaded the update, unless the iPhone has some sort of back door "phone home mode" similar to Windows Updates, that causes it to "seek out, download, and install" the update. THAT would be a most damaging bit of evidence against Apple if it could be proven that they not only intentionally iBricked iPhones, but caused this iBricking through a back door system in the iPhone.

In the end, for Apple, this isn't really about innovation or customer happiness. It's about money. The exclusive contract with AT&T had to have been agreed to for some astronomical sum or the promise of a set fee per activated iPhone. There likely was some clause built into their contract for Apple to lose money if iPhones are permitted to be unlocked and used on competing networks. It will be interesting to see how this ordeal affects sales of new iPhones. Would you buy one if you knew that yours could be inadvertently bricked with a software update?
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Amit, 12 Oct 2007 @ 2:53pm

Big mistake
I already have an iPhone and I am regretting my decision. If I had known that Apple will come out with an update that kills your phone, I wouldn't use my hard-earned $400 on this good-looking-but-underperforming toy.

I think the very fact that Apple (most likely bound by a clause in its contract with AT&T) is keeping the phones locked is disturbing. Perhaps, a lot of the users wouldn't mind that the phone can't have 3rd party software installed. However, having an operator-locked phone even after paying the full price is a bit too much.

I agree that most phones in the US are operator locked, but then one can get the unlock code from the operator (and not the manufacturer because the operator is the one subsidizing the price of the handset) on request (they cannot refuse because the law asks them to do so). However, Apple (being the manufacturer of a un-subsidized phone) refuses to lock the iPhone.

I know this because I have called Apple support a number of times asking clarification on this and they say that if you go outside the US with your iPhone, you either H+E+A+V+I+L+Y pay for the international roaming or you just use it as a $400 paper-weight. This, is when I am in no 2-year contract with AT&T as I am a GoPhone subscriber. I don't have a long credit history in the US, so Apple's own activation process (in conjunction with AT&T) refused to sign me up for a 2-year contract but asked me to sign-up for a GoPhone. It hardly mattered to me and I figured that I will have a better chance at getting the phone legally unlocked. Does that fall under unfair trade practices? I would expect it to. Does Apple know? I'm sure they do. Did they think about it? I'm sure they did. Did they care about the law? In my opinion, they said, 'Heck with the law!'
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Thruth, 15 Feb 2009 @ 11:37am

Re: WHAT
Wrong, on so many levels. For one, it IS apple's fault the firmware killed the iphones, they are the only ones who code the firmware, and their code IS their responsibility. Secondly, you are exaggerating to the extreme when you say 'there are 100 ways to unlock your phone', as there are only a handful of common methods to do so. So, yes they CAN and MUST test their firmware because it IS their responsibility to do so.

You are also wrong about the carrier, it was not sprint they signed a contract with, but AT&T, in the future try actually reading an article before commenting on it. You say 'tuff shit'? Well jackass, when corporations start making your life miserable by preventing you from doing something you want to do, and reasonably SHOULD be able to do, we will be here to say 'Tuff shit' right back at ya... jackass.

Oh, and even though its a bad analogy, the same goes for a modded xbox and M$, if they intentionally brick someone's system for modding it then they should be sued and heavily fined as well. But then again, you'd probably lack the mental fortitude to realize it was done on purpose, just like you apparently can't figure out that ibricking isn't some sort of 'accidental' side effect of the firmware update, but an intentional and deliberate act of sabotage committed by apple.

It's nothing short of vandalism and those running the company should be prosecuted and imprisoned for it. Steve Jobs may be a genius, but he's also a criminal, and should be making i-licenseplates from his cell.
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