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US judge OKs iPhone class action against Apple, AT&T

AP , SAN JOSE, CALIFORNIA

A US federal judge says a monopoly abuse lawsuit against Apple Inc and AT&T Inc’s mobile phone unit can move forward as a class action.

The lawsuit consolidates several filed by iPhone buyers starting in late 2007, a few months after the first generation of Apple’s smartphone went on sale.

An amended complaint filed in June 2008 takes issue with Apple’s practice of “locking” iPhones so they can only be used on AT&T’s network and its absolute control over what applications iPhone owners can and cannot install on the gadgets.

The lawsuit also says Apple secretly made AT&T its exclusive iPhone partner in the US for five years. Consumers agreed to two-year contracts with the wireless carrier when they purchased their phones, but were in effect locked into a five-year relationship with AT&T, the lawsuit said.

The actions hurt competition and drove up prices for consumers, the lawsuit claims.

Apple and AT&T have not commented on the terms of their deal. In its response to the complaint, Cupertino, California-based Apple said it did not hurt competition.

In court documents filed on Thursday last week, Judge James Ware of the US District Court for the Northern District of California said parts of the lawsuit that deal with violations to antitrust law can continue as a class action. The class includes anyone who bought an iPhone with a two-year AT&T agreement since the device first went on sale in June 2007.

Apple has sold more than 50 million iPhones in the last three years. The company does not specify how many have gone to US customers.

The lawsuit seeks an injunction to keep Apple from selling locked iPhones in the US and from determining what iPhone applications people can install. It also seeks damages to cover legal fees and other costs.

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