Apple, ATandT Lawsuit Over Locked iPhones to Move Forward

Part of a suit filed against Apple and AT&T has been given a green light. It accuses the pair, by virtue of their secret agreement with one another, of locking iPhone owners into five-year contracts.

Portions of an antitrust lawsuit filed against iPhone-maker Apple and the exclusive U.S. carrier of the iPhone, AT&T, can proceed as a class-action case, a U.S. District Court judge has ruled.

The class-action suit combines several suits brought against Apple and AT&T since the pair began offering the iPhone in 2007 and regards the practice of "locking" the smartphone so that it can be used only on the AT&T network. The suit alleges that while consumers signed a two-year contract with AT&T, due to AT&T and Apple secretly agreeing that the carrier could have exclusive rights to the iPhone for five years, those consumers were essentially forced into five-year agreements.

The suit additionally claims that this practice drove up prices for consumers and hurt competition in the industry. It also addresses the control that the pair have over the applications that can be downloaded to iPhones.

The class-action suit is said to include "anyone who bought an iPhone with a two-year AT&T agreement since the device first went on sale in June 2007," according to an Associated Press report. Judge James Ware of the U.S. District Court for the Northern District of California made the latest ruling in the case July 8, the AP said.

During the second quarter of 2010 alone, Apple sold 8.75 million iPhones. On June 24 Apple released its newest model, the iPhone 4, and later reported selling 1.7 million of the devices within the first three days.

News of the suit was followed by competitor Google's offer of a do-it-yourself coding tool for its popular open-source software, Android. The offer highlights the radically different business approaches between the two companies.

On July 8, Apple was also included in a suit filed by NTP, which is additionally accusing Motorola, HTC, LG Electronics and Microsoft of infringing on its patents for wireless email. Apple is also involved in two other class-action suits, regarding the antenna and reception issues with the iPhone 4, as well as on-going legal battles with HTC, Nokia and Elan Microelectronics.

This latest class-action suit is reportedly looking to ban the sale of locked iPhones in the United States, and is asking for legal fees and other costs to be covered.