Most cellphones locked to a particular cellular network, so that carriers can leverage consumers to use their service by subsidizing the cost of the device. For iPhones, that network is AT&T's, and the cell company pays a hefty premium for its monopoly on Apple customers. Hackers have found ways to unlock iPhones, however, as well as adding additional applications. Unlocking cell phones is specifically exempted from the DMCA's prohibition on reverse engineering, so several thousand people unlocked their iPhones. Apple's latest iPhone software update rendered unlocked phones unusable even on AT&T's network, a move referred to as 'bricking' the phones. This has understandably pissed some iPhone owners off, leading two of them to file separate class-action lawsuits against Apple and AT&T.
The first by a few days, Tim Smith , alleges California state law antitrust and unfair competition claims, saying that Apple used its monopoly power to inflate iPhone prices and refusing to provide warranty service on bricked phones.
The second alleges violations of federal antitrust law , including the Sherman Act, the Federal Trade Commission Act, and the Telecommunications Act. It emphasizes Apple's statement before the 1.1.1 update that bricked unlocked phones that the unauthorized software could “cause irreparable damage to the iPhone's software, which will likely result in the modified iPhone becoming permanently inoperable when a future Apple-supplied iPhone software update is installed.” The complaint takes this as evidence that Apple intentionally disabled unlocked phones, and then refused warranty service on them, which the plaintiff says are unlawfully anticompetitive.