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.

Filed Under: california, early termination fees, mobile phones, unlocking
Companies: apple, at&t, t-mobile

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  1. identicon
    Shawn Nunley, CISSP, 12 Oct 2007 @ 8:44am

    Revenue sharing is the issue

    AT&T agreed to partner with Apple, but I believe they had to agree to fork over x% of subscription revenue to Apple. Apple stands to make billions over the course of the contract, but if the phone are unlocked and on a non-AT&T network, Apple loses their share unless they have agreements with the other networks. And, if the phones can roam networks, there's no incentive for the networks to share revenue.

    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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