Lawsuit Advances Claiming AT&amp;T iPhone Monopoly

A lawsuit alleging that Apple and AT&T secretly formed monopoly with their exclusive iPhone agreement has received class-action status, meaning the plaintiffs now represent everybody who’s bought an iPhone in the United States.

Judge James Ware of the U.S. District court for the Northern District of California on Thursday granted class certification of plaintiffs? antitrust claims seeking damages and injunctive relief for the complaint titled “Apple & ATTM Antitrust Litigation.”

In an interview Friday with Wired.com, Mark Rifkin, lead counsel representing the plaintiffs of the suit,�highlighted that the terms of AT&T’s two-year customer contract say that customers have the option to terminate whenever they wish for a fee to switch to another carrier.

By only offering the iPhone on one carrier, iPhone customers are still essentially locked in�despite having the termination option, the suit argues.

“The court has allowed [multiple] plaintiffs to represent 20 million consumers who have been forced to use AT&T for iPhone voice and data service, despite an agreement that allows them to terminate at any time and presumably switch carriers,” Rifkin said.

Ever since the introduction of the iPhone in 2007, AT&T has been the exclusive carrier of the handset in the United States. Neither Apple nor AT&T have disclosed official details of their exclusive agreement to carry the iPhone.

Originally filed in 2007, the class-action lawsuit alleged that Apple and AT&T had illegally exerted a monopoly by telling customers their iPhone contract was two years long when in actuality the companies’ exclusivity agreement was for an indefinite, undisclosed amount of time. That means even after iPhone customers’ two-year contracts have expired, they still don’t have the option of switching to another carrier because AT&T is still Apple’s only U.S. partner.

However, earlier statements made by Apple’s legal team noted it was publicly reported in a USA Today article that the agreement was five years long, as first discovered by Engadget, which implied that AT&T would be the exclusive carrier of the iPhone from 2007 to 2012.

In a response filed by Apple’s legal team in 2008, Apple claimed the allegations of monopoly were contrived.

“[T]here was widespread disclosure of [AT&T's] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years,” Apple said in a response. “Moreover, it is sheer speculation ? and illogical ? that failing to disclose the five-year exclusivity term would produce monopoly power.”

Apple and AT&T declined to comment on the latest developments of the class-action suit.

“We’re not going to discuss pending litigation,” an Apple spokeswoman told Wired.com.

Court document [pdf]

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