Apple Beware: CA Supreme Court Gives Go Ahead For T-Mobile Phone Unlocking Lawsuit
from the folks-in-cupertino-may-be-interested dept
Just a few days after a class action lawsuit was filed in California against Apple for locking down the iPhone, the California Supreme Court ruled on a different case that may have an impact on the Apple case. It's given the go ahead on a separate lawsuit against T-Mobile for locking its phones and requiring an early termination fee. T-Mobile had argued that the terms of service required that any dispute go to binding arbitration, so that it didn't make sense to take it to the courts. Of course they want binding arbitration because companies almost always win in binding arbitration. The court found that it's perfectly reasonable to take this issue to court. How the courts will actually rule on the issue could make a big difference in the Apple/iPhone case -- as there is the possibility that the courts may find that (in California at least) locking a phone to a single network is not allowed. It may depend on the specific wording of state laws, as the specifics of such a case can get rather technical. To be honest, if a mobile phone operator wants to lock a phone to only their network, and people agree to it in the contract (or agree to an ETF), then that should be a contractual issue. It's a dumb business practice -- as many operators are starting to realize. However, that doesn't necessarily mean it should be illegal.
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Filed Under: california, early termination fees, mobile phones, unlocking
Companies: apple, at&t, t-mobile
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Not all contractual terms should be legal, especially in view of the wildly disproportionate bargaining power between big companies and individual consumers, as well as the pervasive ignorance and general absence of organization which disables them from acting in their own interest.
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how about if
what could the courts do then ?
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An out for Apple?
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Re: An out for Apple?
While ATT makes money off the subscribers. But if the subscribers have a choice of where to get the iPhone from, thenit is Apple who in the end comes out on top and the consumer wins because the carriers will have to come with some sort of deal package to win iPhone lovers to their service. Cheaper iPhones sold + more iPhones sold = Apple, and not the individual carriers make $
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30%
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Revenue sharing is the issue
This kind of revenue sharing agreement only makes sense if you can lock the phone to the network.
If the courts unlock the iphones, something else is going to break as well. I hope a ruling 'in the interest of consumers' doesn't actually screw the consumers.
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Two Separate Issues
The second issue is the way Apple wants to lock iPhone users to AT&T, probably due to the service usage kick-back mentioned in other posts. They want their revenue stream, too. In the same way, AT&T and other wireless providers want to lock the hardware they sell to using their service. This is one of the real problems I see with wireless phone service. Wireless providers want to rake in money without having to compete for it so they create hidden debt to lock-in customers.
In some ways this is like the mail-in rebates we have become used to seeing in many retail situations. I would rather see a fair price for the phone which I am then free to connect to any compatible service. Don't try to trick me with an artificially low price. The service provider should also offer better rates for people who are not expecting them to finance part of the cost of the phone.
I should be able to do anything I want with hardware I purchase, but it's not mine until it is paid off (at the end of the service contract that financed it). Why won't Apple unbundle iPhones from specific service providers? Many people would be willing to pay for an open iPhone just because it's an Apple.
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Apple makes money on AT&T service, not just the iP
People seem to be missing that point. Apple is selling a revenue generator, not a phone. It's Apple's way of entering the telecoms market. They are getting thousands (not hundreds) of dollars per phone sold. Get it?
That model breaks if the phones are free (unlocked) to use any carrier.
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