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5/27/2010
08:24 AM
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Exclusive: iPhone Woes Revealed In FCC, FTC Consumer Complaints

Freedom of Information Act documents obtained by InformationWeek show that the Federal Communications Commission has received 72 complaints about Apple's iPhone since 2009, mostly involving AT&T. There are 450 Federal Trade Commission complaints.






FTC, FCC Reveal Complaints Filed Against Apple
(click for larger image and for full photo gallery)

Apple's iPhone is phenomenally popular. The company sold 8.75 million iPhones during the first quarter of the year, 131% more than it sold during the same period in 2009.

The company's customers are almost all at least satisfied with the device, if not enthusiastic, assuming that the sentiments of 200 iPhone users surveyed last summer by RBC Capital Markets/ChangeWave are representative of the feelings of the masses.

But the love is not universal. The iPhone is abhorrent to some supporters of open-source software because it is closed. It relies on digital locks, something Apple CEO Steve Jobs has rejected in the context of music but finds appropriate for the iPhone, iPod and iPad.

Apple's insistence that it approve all apps developed for the iPhone to ensure a positive user experience has lead to a string of controversies about the company's inconsistent and unclear rules for allowable content. The company's policies have alienated some developers and underscored the different road being taken by its main competitor in the mobile space, Google.

For the latest Apple tablet news, opinion and conversation, be sure to check out InformationWeek's Special Report: Tablet Wars -- Can Apple Three-peat?

Most of iPhone users outside of the tech community care little for such debates. Some, however, believe regulators should force Apple to change its ways.

Last month, following Apple's decision to change its developer agreement to ban Adobe Flash and other third-party development tools, InformationWeek filed Freedom of Information Act (FOIA) requests asking both the FTC and the FCC to provide copies of customer complaints about Apple and the iPhone since the beginning of 2009.

Our hope was to assess the extent to which issues that aroused ire in the technical community mattered to others. When a prominent technologist like Tim Bray declares that he hates the iPhone, it's easy to discount his opinion as evangelism for Google.

When actual iPhone users seek help from the government, charges of bias become harder to make and the issues raised seem somehow more worthy of attention. These complaints were not intended to be aired as public statements. They were submitted to encourage regulatory action.

Apple happens to be under the microscope of regulators at the moment. The FTC is reportedly looking into the company's decision to prohibit Flash and other developer tools for iPhone development. The FCC's inquiry into the company's refusal to approve the Google Voice app for the iPhone, started last July, remains ongoing. And the Department of Justice is reportedly reviewing the way Apple does business with its music industry partners.



Whether consumer complaints encourage such inquiries is questionable. Many of the complaints submitted to the FCC and FTC are poorly reasoned. Some are misdirected at Apple and some reflect a poor choice by the complainant rather than corporate misconduct.

A recent complaint of this sort about a water-damaged MacBook Pro was sent directly to Apple CEO Steve Jobs. He reportedly replied: "It sounds like you're just looking for someone to get mad at other than yourself."

Quite a few of the complaints sent to the FCC and FTC appear to deserve the same reply.

The FCC provided InformationWeek with 72 complaints related to Apple's iPhone. In doing so, the agency said, "Please be advised that the FCC receives many complaints and comments that do not involve violations of the Communications Act or any FCC rule or order. Thus, the existence of a complaint filed against a particular company does not necessarily indicate any wrongdoing by the company."

It should also be noted that both the FCC and the FTC have almost certainly received complaints about Google, Microsoft, and other large communications technology companies.

What's most noteworthy about the complaints provided by the FCC is that the majority of them take issue with AT&T as much, if not more than, Apple. To read through the complaints is to be struck how much ill-will has been generated by Apple's decision to make the iPhone available exclusively through AT&T in the U.S.

A number of the complaints sent to the FCC want the government to take action against Apple for restricting its iPhone to AT&T, for refusing to allow Adobe's Flash technology on the iPhone and for refusing to approve certain iPhone applications, such as the Google Voice app (since released as a Web app).

One complaint from August 19, 2009 says, "I would ask that everyone read the article today in The Wall Street Journal, ‘Why AT&T Killed Google Voice.' The exclusive that AT&T has brokered with Apple is already hurting efficiency, competitiveness, and innovation. To go further by not allowing Google Voice as an application is truly a crime. If technological improvements are not allowed because it [sic] cuts into the margins of another company, then the FCC is NOT acting in the interest of consumers."

Another complaint from August 8, 2009 says, "I am a Google Voice user. I am also an iPhone owner, using AT&T for my cell service. Apple/AT&T have blocked iPhone users from accessing a Google app to use Google voice effectively on the iPhone in order to allow AT&T to maximize call and SMS message fees it can charge users. I believe this is an unfair use of Apple's/AT&T's monopoly power over the iPhone market. I understand the FCC is already investigating. I want to register my dissatisfaction with the current marketing practice of Apple/AT&T in prohibiting consumers from using lawful, technologically beneficial software like Google Voice for the purpose of maximizing their own profit."



On Saturday, August 1, 2009, the Wall Street Journal reported that the FCC had begun an inquiry into Apple's rejection of the Google Voice app for the iPhone, which was "notable because the FCC hadn't received a complaint about Apple's rejection of Google Voice."

In fact, the agency had received a complaint. Google confirmed that Apple had refused to approve Google Voice on Tuesday, July 28, 2009. On Wednesday, July 29, the FCC received the first of several complaints about Apple's rejection of Google Voice, designated 09-C00140461 by the agency. The FCC asked Apple for an explanation in a letter dated Friday, July 31, 2009.

The FCC says that its inquiry is ongoing. "The matter remains open and public comments are under review," a spokesperson said via e-mail.

The FTC provided InformationWeek with 487 complaints about Apple, covering a period from the beginning of 2009 through April 12, 2010. The agency said in a letter that these complaints have not been verified by the agency.

Indeed, there are some that are bizarre or simply hard to believe, such as a complaint about Apple's refusal to repair a MacBook that had suffered "spontaneous" water damage -- water that simply began leaking from the MacBook from no apparent external source.

More than a few concern companies unrelated to Apple, Inc., such as Apple Mortgage and Apple Vacations. Thus, the number of FTC complaints about Apple is closer to 450.

The FTC said it was denying 15 pages of records covered under the request because they're related to law enforcement action and are thus exempt from FOIA disclosure. Both the FCC and the FTC made an effort -- not entirely successful -- to redact the personal information included in the complaints. We blacked out the name of a development company CEO that was visible in one of our screenshots.

Many of the FTC complaints describe warranty disputes, hardware failures in Apple computers, the inability to unlock iPhones, and misleading advertising. There's one that alleges risky data handling after a computer was left at Apple retail stores for repair.

The most numerous type of Apple-related complaint submitted to the FTC has to do with hacked or hijacked iTunes accounts and unauthorized charges. This appears to be a major problem, though it probably has more to do with the number of iTunes users running unpatched versions of Windows or falling victim to phishing attacks than it does with Apple.






FTC, FCC Reveal Complaints Filed Against Apple
(click for larger image and for full photo gallery)

As was the case with the FCC, the FTC received a number of complaints about Apple's decision to change its developer rules to disallow Adobe's Flash technology and other third-party development tools and about Apple's oversight of the iTunes Store.

One such complaint says, "The company has recently done something that I think is unfair in the marketplace. Apple updated their developer license agreement to include that a person MUST use only their tools in order to develop for iPhone related products. This is unfair because it unnecessarily limits the development, and restricts the use of other perfectly capable tools. Apple should have the right to reject apps based on security, quality, etc., to some degree, but they should not have the right to tell us how we build our apps."

Some of the FTC complaints have been resolved. For example, a developer who alleged discriminatory treatment by Apple because the company had approved a dating app for straight people and rejected a version that differed only in name for the gay community appears to have received the approval he or she sought: Both versions of the cited app are currently available in the iTunes App Store.

But other complaints, echoing complaints submitted to the FCC, have not. "I would like to report anti-competitive practices on the part of Apple and AT&T," one person said last August. "The rejection of the Google Voice application for the iPhone is stifling innovation and preventing competition."

One iPhone user sought FTC intervention because he or she is unable to address a security vulnerability in the iPhone without purchasing either Mac OS X or Windows and using iTunes to obtain the patch. Another complains, "Apple continually tried to force consumers away from other third party [music] software whenever a consumer attempts to move away from iTunes."

There's a complaint seeking to prevent Apple's acquisition of online music service Lala.com.

Another complaint, echoing a recent lawsuit filed against Apple, says the company refused to provide warranty repair coverage for an iPhone because it had been submerged in water, a claim the complainant disputes.

"I told them that my phone was never submerged or dipped into water," the complaint says. "They say it might have come from sweat. Maybe it came from moisture due to humidity. I saw on the Web this was a common problem on iPhone. They will replace it but I have to pay $199."

All told, the collection of complaints about Apple shows more concern for issues affecting consumers' wallets -- warranty repair disputes, unauthorized charges -- than for issues of technical freedom and developer rights.

Nonetheless, there is some concern among consumers about Apple's controversial technical policies. If this matters to Apple, the company may choose to address at least some of these perceived problems at its developer conference next month.

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