If you’re one of the many who have lusted after an iPhone but weren’t willing to make the switch to AT&T from your favored network, a new lawsuit against Apple and their exclusive U.S. carrier has now been approved for class action status that may shake up the stranglehold currently placed on Cupertino’s handset.
MacRumors is reporting that a lawsuit filed against Apple and AT&T over the exclusive arrangement for the iPhone has now received class action status, according to Wired. That means that the lawsuit automatically covers every single iPhone customer in the United States.
“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,” Wired.com reported in an interview on Friday. “By only offering the iPhone on one carrier, iPhone customers are still essentially locked in despite having the termination option, the suit argues.”
Thus far, the lawsuit has shed light on one major nugget of information: AT&T’s exclusive grip on the iPhone is scheduled to last five years. There has been rampant speculation over the years as to exactly how long the exclusivity period was, and the disclosure of documents revealing that 2012 has finally put that controversy to rest for now.
The plaintiffs in the lawsuit argue that even though an iPhone customer fulfills their two-year contract with AT&T, they are unable to switch carriers -- effectively locking them into the telco’s service for longer, unless they switch handsets. Of course, the reality is that there’s nowhere else to go: Verizon Wireless and Sprint use a completely different CDMA technology, and while T-Mobile is a GSM carrier like AT&T, their 3G service is not compatible with the iPhone’s antenna, meaning the device could only work over the slower EDGE data anyway.
"[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 filed by their legal team in 2008. "Moreover, it is sheer speculation -- and illogical -- that failing to disclose the five-year exclusivity term would produce monopoly power."
Despite the now-revealed five-year exclusive arrangement, many believe that Apple and AT&T may have renegotiated that agreement long ago. The companies changed their business model after the original iPhone in 2007, and the introduction of the iPhone 3G in 2008 lowered the price of entry to $199 thanks to AT&T subsidizing the cost as part of the two-year contract.
Follow this article’s author, J.R. Bookwalter on Twitter
