Apple sued over iTunes gift cards
Illinois residents Daniel and Barbara Owens are suing Apple, accusing the company of fraud related to its iTunes gift cards.
(Credit:
Apple)
The suit, filed Wednesday in U.S. District Court in southern Illinois and obtained by CNET, shows that the couple is seeking monetary damages for Apple's "wrongful, illegal, improper and fraudulent acts."
The Owens claim that Apple markets the gift cards as selling individual songs on iTunes for 99 cents each. The couple argues that not all songs in the iTunes Store are that cheap--some actually cost $1.29. They contend that they have been "denied the benefit of their bargain to purchase any song" from iTunes for 99 cents.
In April, Apple changed the pricing structure of the iTunes Store from 99 cents per song to a variable model in which songs cost 69 cents, 99 cents, or $1.29. The Owens say they purchased several iTunes cards including two $25 cards on March 1, 2008, from Sam's Club and a $15 card on May 19, 2009, from Wal-Mart.
Apple has expanded its presence in many retail outlets over the years, allowing stores like Target, Wal-Mart, Best Buy, Walgreens, and others to sell gift cards.
The company is being sued on four counts including two counts of breach of contract, one count of violating the Illinois Consumer Fraud and Deceptive Business Practices Act, and one count of violating the Consumer Protection Statutes.
Apple could not immediately be reached for comment.
Jim Dalrymple has followed Apple and the Mac industry for the last 15 years, first as part of MacCentral and then in various positions at Macworld. A guitar player for 20 years, Jim also writes about the professional audio market, examining the best ways to write and record songs on a Macintosh with Logic Pro and Pro Tools. Jim is a member of the CNET Blog Network and is not an employee of CNET. 
It is kind of an interesting case. If I where a juror I would probably find in their favor for the card bought in March like I said earlier, the award I suggest is $4.50. A petty case, but I'd like to know how it turns out. Though I'd bet Apple sends them a $100 gift card to keep their lawyers out of court.
Actually I believe it should be around $4.50 to bring the value of the card up to being worth at least 15 songs.
It is kind of an interesting case. If I where a juror I would probably find in their favor for the card bought in March like I said earlier, the award I suggest is $4.50. A petty case, but I'd like to know how it turns out. Though I'd bet Apple sends them a $100 gift card to keep their lawyers out of court.
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Yep, because if it goes to court, it has a good chance of becoming a 'class action' case. While I wish that you didn't have to sue for things like this..... unfortunately you have to usually to get a company like Apple to live up to their part of a bargain.
Yes, I do work in the law industry.... however, I dislike ambulance chasers as much or MORE than anyone else.
That's right, folks - they're suing over nebulous claims that, even if they were as fully alleged, comes four bits short of twenty bucks. At 30% contingency, the lawyer would be entitled to a hefty fee of $5.55 of the "injury". (now, note that even in small-claims court, filing fees alone are well north of $20.00 USD...)
Hope these idiots (and their even less-intelligent lawyer) realize what they're getting into, because it'll likely cost them far, far more than they'll ever receive, even if by some cosmic happenstance they did win.
I know I am.
[CNET editors' note: Personal attack deleted.]
[CNET editors' note: Personal attack deleted.]
It's a great system, but if you don't like it - try living in a country where organizations are accountable to no one.
If we were talking about companies whose products strangled infants? Okay...
If we were talking about pet-food companies who product killed dogs? Sure...
If we were talking about an automobile company whose products suddenly burst into flames for no reason at highway speeds? Definitely...
...but a lawsuit based on, oh: "OAMG! they're not all 99 cents each anymore after I sat on the unused gift cards for (literally) months!? I just lost $18.50, you bastards!" ?
C'mon. Let's ditch the romantic proletariat hyperbole, and think for a minute here, mm'kay?
Now what I would like to see is a system where if the litigant is suing for more than just financial losses (that is, if you're asking for punitive damages, which these yokels are obviously doing), you should be required to put up a bond for 25% of the pre-requested punitive damage amount (that is, if you're asking for a million bucks above and beyond any actual monetary loss, you get to pony up a bond for $250,000). You also should always have to demand a stated monetary amount before the lawsuit proceeds. If the plaintiff loses, that bond gets cashed and paid to the defendant - and on top of that still be responsible for paying any legal fees that the defendant had to put out.
Maybe up the bond to 50% or more for corporations and/or lawyers going for class-action? Nah - too many loopholes that could arise, but it would be nice.
Either way, it would put a screeching halt to frivolous litigation, since the plaintiff would have to put his own money where his mouth is... and nobody wants to take more risks than absolutely necessary. ;)
/P
You forgot you're no longer PENGUINISTO.... stop signing off with a /P
(busted)
Here in the US, for example, if you get fired because your boss doesn't like your race or religion, its up to you to file suit if you want the civil rights laws enforced against that employer. A loser pays system would have a large chilling effect on that.
Our legal system is just that, a system. You cannot just go around changing parts of it with no understanding of how they fit in with the system as a whole.
not if you had a good case.
Loser pays stops frivolous lawsuits. Including ones with blacks who have a chip on their shoulder.
That is Apple's ROCK SOLID DEFENSE CASE!!!!!
LOL
They are suing for an amount less than $20. Doesn't the 7th Amendment pretty much mean they should toss the case out?
Don't get me wrong, I agree with you on this case, but when one adds a request for punitive damages to the pile, it gets a lot bigger than $20...
Personally, I think Apple was stupid in this case, they should have realized that "Hey, we might go to variable pricing in the future.... it might not be a good idea to guarantee these people a certain amount of songs that they can buy with these cards!"
Simple stupidity by Apple, and something that should be penalized for, because anyone else with a brain in the US would have thought about this.
If every store had to guarantee the prices of everything would remain the same a year after they sell the cards, it would change the way gift cards work. The thing is ridiculous. Do they really feel cheated? If so, did they call Apple Customer Relations, who probably would have just issued them a $25 card and let it be over. No, they want to sue and spend a lot of money and give a lot of money to lawyers and hope Apple will settle and they'll get money.
...think I could take that to the local grocer (who still exists) and threaten to sue him into oblivion if he doesn't honor the prices?
Does it really say that? I thought you could buy anything in iTunes including movies, tv shows, albums, etc all with varying prices with your gift card.
@fortyonejb "The gift cards clearly stated that all songs were $.99 and that a $25 card gets you 25 songs no strings attached".
Does it really say that? I thought you could buy anything in iTunes including movies, tv shows, albums, etc all with varying prices with your gift card.
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NOW you can. You are forgetting that these cards were, by and large, printed BEFORE Apple got into the TV episode, video, etc. business. At the time, they were just 'music-only' and were stupid enough to guarantee ANY, repeat, A N Y 15 songs for 15 dollars.
That is why they are now getting clamped down on, and any corporate lawyer worth their salt who saw this wording before would have been "WHOA! Change this wording or there could be troubles in the future if you go to a variable pricing plan, which I (since they are usually insiders and know BEFOREHAND what the company is planning on doing in the future) know that you are thinking of doing!"
We're not talking about a COUPON here. We're talking about a GIFT CARD. It's a pre-paid purchase agreement. I agree to pay you X dollars now for Y item(s) in the future (in this case, as the card in question specified $0.99 per card IN addition to a face value on the card).
This is NOT like a decades old coupon. If the non-useage fees were not in effect, and that $0.08 per pound (up to 5 pounds/ .40 cents) hamburger coupon were a gift card, the "gift card" would have generated $213.48 in value for the issuer (90 years at 7% interest compounded montly as a rate of return), more than enough for the issuer to still make a handsom profit giving the holder 5 pounds of hamburger meet. Gift Cards are already ripping consumers off enough without letting issuers retroactivly change the terms of the agreement.
- by CrashPad63 June 26, 2009 10:53 AM PDT
- Damn, one could only hope that Apple would get sued out of business.
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- by Get_a_life_Leo June 26, 2009 11:12 AM PDT
- If you so hate Apple, why not sue them yourself? Apple is one of the genuine US company success stories. I wish I could sue you for your stupid remark.
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- by jakemochas June 26, 2009 8:04 PM PDT
- @getalifeleo
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- by CrashPad63 June 27, 2009 8:09 AM PDT
- Get real!!! Apple is a genuine one trick pony show. Steve Jobs is nothing more than a Carnival Barker plying his wares to the lemmings that are Apple fanbois. Oh and I do apologize to the Carnival Barkers as a profession.
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- by shellcodes_coder June 27, 2009 9:55 AM PDT
- Dude, I agree with you :) I would love to see that
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- by b_baggins June 28, 2009 7:46 AM PDT
- @jakemochas,
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- by jakemochas June 29, 2009 9:19 AM PDT
- @bbaggins do you actually think those components are made here in the US or in california? Your answer should be no.... Its all made the in the SAME factories.... the MOBO the CPU the RAM the display... the aluminum is also made in taiwan
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- by jakemochas June 29, 2009 9:23 AM PDT
- Operating System
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Showing 1 of 4 pages (147 Comments)wow apple has overpriced stuff that is made in the same exact factories in asia. People think steve jobs sprinkles ferry dust on every computer...
Yep. Because every $499 Asus laptop has aluminum unibody construction, ambient light sensors, built-in webcams, fiber-optic backlit keyboards, EFI, optical glass LCD displays, infrared remote receivers, white LED sleep indicator, led battery charge indicators, magnetic power cord coupling, glass trackpads with multi-touch, and firewire 800.
After all, we all know that the only thing a computer is composed of is the CPU.
Genuine Windows Vista Ultimate
Memory
8 GB DDR3 SDRAM 1066MHz (2 DIMMs)
Hard Disk Drive
256 GB Solid State Drive Ultra Performance
Video
256MB NVIDIA GeForce 9500M
Hardware Upgrade
6 Cell Primary Battery
125V Power Cord
90W AC Adapter
Media Bay
8X DVD +/- RW w/dbl layer write capability
Base
Studio XPS 13 (1340) Laptop: Intel Core 2 Duo P9600 (6MB cache/2.66GHz/1066Mhz FSB)
Bluetooth Wireless
Dell Wireless 370 Bluetooth Module
Do you see any 13" macbook with these specs?