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AT&T, Apple to pay claims from 'unlimited' 3G data users

updated 09:00 pm EDT, Fri September 27, 2013

Carrier's change to data plans entangles Apple through 3G iPad

Although it had no say in how AT&T managed its "unlimited" 3G data plans, Apple and the US carrier are both responsible for harm inflicted on consumers who bought 3G iPads on AT&T's network expected to be able to use an unlimited data plan. The proposed settlement, which must still be approved by a judge, comes as a result of customers who spent an extra $130 on the 3G-capable iPad in the expectation that they could use AT&T's unlimited data plan with it. AT&T later revoked the option after promising it would retain it for iPad 3G customers.

The settlement would see Apple paying $40 to valid claimants, while AT&T would give class members $20 off an alternative data plan. Judge Ronald Whyte has given the deal preliminary approval, which might affect hundreds of thousands of customers, with no stated end point for the $20 discount -- which might last as long as the claimants continued to pay for that particular plan.

The settlement acknowledges that plaintiffs "overpaid" to get the 3G version of the iPad on the inherent promise of AT&T that they could use and continue to use its "unlimited" data plan, which they were later denied access to even as other customers on different plans were "grandfathered" in.

The settlement comes as a result of four separate lawsuits over the deception that were consolidated by the judge into one class-action suit. It would affect potentially all buyers of 3G-capable original iPads prior to AT&Ts termination of the "unlimited" plan, which happened in June of 2010.

While other 3G-capable tablets existed at the time, apparently not enough of them were sold to end-users for anyone to litigate AT&T over the lost data capability. No other brands of tablets are included in the settlement proposal.

The original case saw the plaintiffs demanding full refunds from Apple on the 3G iPads and that AT&T be forced to extend the unlimited data plan. The settlement is the result of years of negotiations between Apple, AT&T and the plaintiffs. Although the $40 Apple portion of the settlement could add up to hundreds of millions for Apple, historically only a small percentage of class-action claimants ever come forward.

AT&T's $20 discount will bring the cost of a premium data plan for claimants down to the cost of a basic plan, and includes any advancement in wireless technology such as forthcoming "5G" data systems, suggesting the discount may be active for users for years to come. Should millions of plaintiffs take advantage of the offer, both companies could see very substantive charges related to the matter.



By Electronista Staff
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  1. FireWire

    Mac Elite

    Joined: 10-03-99

    You buy a new Ferrari to drive 100 mph on Germany's autobahn.. Germany changes the law to enforce a speed limit, so you sue Ferrari? why the F should Apple pay anything? and why is it paying MORE than AT&T? just force AT&T to grandfather them and call it a day..

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    Clearly AT&T wasn't willing to grandfather them in, because doing so would launch lawsuits from all the other AT&T customers who were forced off the unlimited plan.

    Although Apple is paying more up front than AT&T, remember that the Apple payment is a one-time $40 while the AT&T discount is $20 every month. Ultimately AT&T is bearing the brunt of the money involved, though they're doing it as a discount so less future profit rather than up-front.

    As to why Apple has to pay anything, my guess would be that Apple must have co-advertised the unlimited plan with the iPad alongside AT&T since they are partners for promotional purposes. That makes them part (however small a part) of the deception, since they likely knew (along with AT&T) that the offer would end at some point.

    My personal opinion is that the opportunistic plaintiffs and their lawyers are exploiting AT&T's change of plans, but that's the way the legal system works (sadly). Soon you'll be able to sue an airline for fraud if your plane leaves at 3:01 instead of 3. :)

  1. The Vicar

    Junior Member

    Joined: 07-01-09

    @chas_m:

    Not only is this an entirely reasonable suit, but your analogy is possibly the worst one I've ever heard from a conservative anti-lawsuit troll.

    This lawsuit exists because people bought that particular iPad model at that particular price point on the promise of unlimited bandwidth, and were then switched against their will to a limited plan. As I recall, they paid more for those models than they otherwise would have done. They have been ripped off, and it is completely just for them to get a partial refund. (Well, actually, what would REALLY be just would be for AT&T to be forced into giving them unlimited bandwidth, but we're too corporation-friendly in the U.S. so actually making a company live up to its contractual promises is apparently too much to ask.)

    As for the "sue for the plane leaving at 3:01" thing -- that's seriously the dumbest thing I've heard all week. Not least because the fine print on the ticket sales informs you that the flight may leave at a time after the scheduled departure time, which would immediately knock the case out of court. Nobody buys a plane ticket expecting it to be accurate to the minute. If there's no expectation, there's no basis for a lawsuit. Can you go back to the traditional right-wing "we need tort reform to protect the big companies from the people they're ripping off" talking points, please? They aren't really any smarter, but at least they have been tailored to sound a bit less silly.

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    Vicar: thanks for calling me right-wing ... that's certainly the first time in my life anyone has done so!! :)

    I fear my final comment may have been misterpreted, though it is entirely my fault for not phrasing it well. What I was trying to say is that it's hard for me to imagine that someone bought an iPad 3G specifically and only because they thought they would get unlimited data forever from AT&T. I say this because I'm well aware of AT&T's business model. :) I also believe that like most class-action suits, the real victors are the lawyers. I then added a general comment about the prevalence of frivolous lawsuits -- you're perfectly correct that my hypothetical example was silly (you may not have noticed the smiley face next to it), but as you probably know, that won't stop someone from TRYING ...

    Still, it was my fault for inferring that the lawsuit was entirely frivolous, and I apologize for that. I meant and didn't express that I thought Apple's being dragged into what was pretty clearly bad behaviour by AT&T was frivolous and silly. There was no evidence that Apple was behind AT&Ts moves in any way, so why Apple has to refund these folks $40 is beyond me. That should be AT&T's problem, they're the company that was deceptive.

  1. Sebastien

    Registered User

    Joined: 04-29-00

    Originally Posted by The VicarView Post

    @chas_m:
    As for the "sue for the plane leaving at 3:01" thing -- that's seriously the dumbest thing I've heard all week.

    "All week"!? Try "all eternity".

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