Legal, Laws, and Regs

Binding the iPhone

On Steve Jobs and his design obsessions, Nick Carr writes:

Steve Jobs, I think it’s fair to say, looks at Apple products as works of art, as little functional sculptures aimed at giving aesthetic pleasure as well as utilitarian benefit. That’s why it pains him so deeply to have people hack into his machines and fiddle with their guts. When a customer “opens” an iPhone, the act doesn’t just complicate Apple’s business relationship with AT&T and the phone’s other exclusive carriers; it stands as a personal affront to Jobs. It’s an assault on the integrity of his artifact.

Nick has nailed it, not just for the iPhone but any Apple device. Utility is sacrificed to form. Whether it’s a good decision for Apple depends on when you ask the question. Ask it the day of a product release, good. Ask it two weeks after a product release, bad.

Nick’s responding to the disgruntled grumbles of iPhone buyers who are now the proud owners of iBricks after the iPhone upgrade. So disgruntled that many customers are contemplating a class action lawsuit against Apple.

Serendipity knocks. A little digging around discovers for us the iPhone/AT&T service agreement out at Apple. Included within the agreement we find the following:

(1) AT&T and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to:

* claims arising out of or relating to any aspect of the relationship between us, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory;
* claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising);
* claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; and
* claims that may arise after the termination of this Agreement.

References to “AT&T,” “you,” and “us” include our respective subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or equipment under this or prior Agreements between us. Notwithstanding the foregoing, either party may bring an individual action in small claims court. You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this provision. This arbitration provision shall survive termination of this Agreement.

(6) The arbitrator may award injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual claim. YOU AND AT&T AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN YOUR OR ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and AT&T agree otherwise, the arbitrator may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative or class proceeding. If this specific provison is found to be unenforceable, then the entirety of this arbitration provison shall be null and void.

(emph. mine)

Another opportunity to highlight the Arbitration Fairness Act of 2007, calling for the elimination of binding mandatory arbitration agreements from contracts.

Recently, The Ninth Circuit Court ruled that the class action provision of the arbitration agreement for AT&T/Cingular in California was unconscionable under California Law.

However, whether this clause or the ruling would hold with the iPhone/AT&T agreement depends: if the class action claim is brought in California; whether the wording on the agreement is the same, and still would be ruled unconscionable in court; whether the agreement applies only to the service, or to the phone/service combo.

Regardless, if the customers were to move on a class action lawsuit, it’s very likely AT&T would move to compel arbitration. Maybe it would be simpler just to be a good little Apple customer, stop being naughty, and let Steve preserve his artistic vision.

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