Judge Rejects Class Action Lawsuit Against Apple for iPhone OS Problems
A judge in California, USA has thrown out an attempt to launch a class-action lawsuit against Apple following problems with an OS upgrade for older iPhone handsets.
She accused the company of turning her phone into an "iBrick" and claimed that the problems caused were a deliberate attempt to persuade customers to buy the newer handset.
Apple released a patch fix for the OS problems, but the woman still decided to seek a class-action declaration for US$5,000 per iPhone 3G owner in the State.
In his order issued yesterday, and seen by MocoNews, Judge Anthony J. Battaglia ruled that the free software upgrade did not amount to a "sale or lease" under California's Consumer Legal Remedy Act, and therefore the act did not apply.
He said in effect that the purchase of the handset was a separate issue from the free upgrade offered to the software within it, which took place a year after she bought the phone.
She has been given 30 days to appeal, and she might have grounds to dispute how the upgrade was defined as a free service based on how Apple itself accounts for its iPhone sales.
Because Apple offers the OS upgrades at no additional cost to the consumer at the time they download it, the company accounts for iPhone sales in its accounts in a rather curious manner.
As noted by AppleInsider back in April 2007, the company announced that in order to comply with accounting rules introduced by the Sarbanes-Oxley Act, whenever a handset is sold, it takes the revenue earned and accounts for the sale over the next 730 days as a series of daily micro-payments.
In essence, it could be argued that as Apple was treating the sale of the iPhone 3G under the subscription method of accounting at the time that the OS upgrade was offered, then the customer might be able to argue that it was not in fact a free upgrade, but part of a subscription service.
This technicality does not eliminate the fact that Apple offered another "free at the point of download" upgrade that fixed the problems being reported, and did so within a couple of weeks - so a claim of $5,000 in damaged per customer would still be very difficult to justify.