Apple, AT&T Sued for iBricking, Monopolistic Behavior

The consumers are bringing the fight to Apple Inc.

Cupertino-based Apple Inc. has been busy writing firmware to lock the iPhones and iPod Touches from third party applications and unlocking. Now after trying to put out one literal iFire, as predicted in a previous DailyTech article, Apple Inc. has found itself the target of not one, but two separate lawsuits seeking class action status.

Apparently Apple's answer to owners of frozen iPhones that they should “buy a new phone” did not go over well.

One lawsuit was filed at the state level by Saratoga attorney Damian Fernandez, who is representing California resident Timothy Smith.

The federal suit was filed by the offices of Hoffman & Lazear in Oakland and Folkenflik & McGerity in New York, on behalf of two individuals Paul Holman and Lucy Rivello; both iPhone owners.

The federal case accuses Apple of unfair business practices, violations of antitrust laws, violations of telecommunications laws and violations of warranty laws. It states that by disallowing user modification of phones to work on other networks, Apple and AT&T willfully and knowingly intended from the initiation of their partnership to maintain a monopoly.

The suit further points to Apple's actions with its latest firmware update which unlawfully restrict consumer choice by preventing people from "unlocking" their iPhones, locking out third party applications from its file system and disabling unlocked iPhones turning them into "iBricks."

The suit officially stated that it did not know how large the effective class would be, but filed it under 100 or more. The firms are predicting big though -- they stated that they think the "there will be millions" who will join the class action.

Part of the dilemma is in knowing how many unlocked iPhones there are. Hundreds of thousands of copies of the unlocking software have been sold or downloaded. Adding in the numbers of people who performed hardware hacks and the number of unlocked iPhone owners may be 100,000 or more. This would be significant portion of the iPhone population, which currently numbers around 1.3 million.

The civil suit accused Apple and AT&T of similar violations, only on a state level in California. It says Apple and AT&T willfully violated many state laws in engaging in its monopolistic and malicious behavior.

Damian Fernadez, the attorney who filed the state suit explains in court documents what Apple is accused of:

Apple punished consumers for exercising their rights to unlock their iPhones. Apple issued a software update that 'bricked' or otherwise caused iPhone malfunctions for consumers who unlocked their phones and installed the update. Apple's unlawful trust with AT&T substantially lessens competition and tends to create a monopoly in trade and commerce throughout the entire United States.

The suit demands a jury trial. It asks the court to issue an order to Apple to unlock iPhones and support hacked iPhones. Finally, it is seeking unspecified monetary damages.

Apple spokeswoman Susan Lundgren and AT&T spokesman Mark Siegel both declined to speak to the media, despite request on Wednesday.

Apple CEO Steve Jobs has in the past compared Apple's war against unlockers to a game of cat and mouse. His comparison now seems to border on comedy as it appears that after being battered and hunted, the "mouse" has turned and is now attacking "the cat."

When Apple Inc. and AT&T's actions drew the companies into the spotlight, it seemed inevitable that a class action suit would be on the way. Now as user anger has erupted at Apple and AT&T, they face not one but two class actions suits. Likely more damaging than any possible outcome will be the negative light that the coverage of these cases will cast on both companies. Apple Inc., which regained leadership as a mainstream tech firm by portraying an rebellious outsider image, will now have to face unpleasant comparisons to its corporate rivals, whom it once poked fun at.