More Legal Trouble for Apple and AT&T Coming over iPhone

As if Apple’s legal department didn’t already have enough to worry about, it looks as if you can add another bit of legal trouble to the equation. The Associated Press is reporting that Apple’s newest update to their iPhone has caused the most serious litigation yet. Apple and its primary carrier, AT&T, are being accused of monopolistic behavior by a couple of plaintiffs in two different lawsuits.

Those two lawsuits came about last Friday in San Jose, California. One of them was filed in Federal court, while the other was put in at the state level. Both seem to be pretty dangerous for Apple, as they look to be headed for class-action category.

These allegations have come as a result of the recent iPhone updates, which made it difficult for other types of bootleg software to run on the iPhone. Apple and AT&T were seeking to completely control how people used their iPhone and it looks like it might be backfiring a little bit. The Federal case asserts that Apple and AT&T teamed up to commit various violations of antitrust laws and warranty laws. The state case looks to be putting forth the same issues, albeit on a smaller scale.

The iPhone owners who brought the case to court seem to have hired some big guns to do their bidding. Law firm Hoffman & Lazera of Oakland and New York firm Folkenflik & McGerity filed the Federal suit on behalf of Paul Holman and Lucy Rivello. The state case looks to be bringing about less legal firepower, as California iPhone owner Timothy Smith hired Damian Fernandez to place his claim. Still, it looks like Apple and AT&T are in for a battle which they never could have possibly expected.

When Apple and AT&T made a decision to not allow the iPhone to work on carriers other than AT&T, they were conspiring together to operate a monopoly, according to the Federal lawsuit. According to some legal experts, the case might have some staying power in federal courts. Apple, as they have done in the past, might consider the option of ponying up the cash to settle the cases out of court.

This is the first case of its kind to hit the courts, as communications laws and monopoly laws merge to form what looks like an interesting dynamic. Apple and AT&T will undoubtedly argue that they are simply looking to protect their investment and not allow the illegal hacking into the phones. Third party software providers obviously have different ideas.

The lawsuits also look to bring Apple down because of its misuse of a warranty promise. Prior to releasing the latest update, Apple put out a warning to its customers than any iPhones which had illegal modifications wouldn’t be covered under the warranty. There is no certain statistic on how many devices were disabled, but it looks like there are plenty of very unhappy customers.

Apple has experienced great success with the device, selling more than one million of the iPhones since their debut on June 29. The lawsuits didn’t directly specify how many people they thought were in the affected class of owners. There is some speculation that hundreds of thousands of disgruntled customers might join the parade, although Apple has denounced those estimates as being hyperbole.