A US consumer advocacy group has filed suit against several GSM carriers for what it claims are anti-competitive practice.
American consumer-advocacy group the Foundation for Taxpayer and Consumer Rights (FTCR) has filed suit against the three largest GSM carriers in the United States over the practice of locking handsets, which it claims is anti-competitive.
In the US, most mobile phones are sold by wireless carriers as part of a service agreement at a significant discount. CDMA phones by nature must be activated directly to the network, but GSM phones use a SIM card that is tied to the network and can be inserted into any GSM phone to provide service. Most GSM carriers in the US, therefore, "lock" the handset via software before it is sold so that it won't work with SIM cards from other carriers. While some carriers will unlock the phone upon request after some period of time, they do not publicize that fact and the phones still may not function properly on other networks due to customized settings.
The FTCR lawsuit against Cingular, T-Mobile, and AT&T Wireless alleges that this practice is unacceptably anti-competitive. Under new FCC regulations subscribers may change wireless carriers without losing their phone number, but, FTCR claims, early termination fees and the cost and hassle of a new phone still deter many users and frustrate free market competition. Thus subscribers either end up staying with a carrier whose service they find unacceptable or must dispose of their current phone, clogging up landfills.
Mobile phone carriers are already greatly-disliked by US customers. The FTCR lawsuit has been brought in the state of California, which has strong consumer-protection laws, and is the second suit brought by FTCR against a phone carrier for deceptive or anti-competitive behavior. The group previously sued Nextel over the fee it charged subscribers to receive an itemized bill, and FTCR says it intends to continue to persue other mobile phone abuses by companies.
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