Two Antitrust Lawsuits Filed Against Major Telcos, Including a $286.56 Billion Class Action on Behalf of 373 Million Mobile Subscribers—the Largest in History
Introduction
Two major lawsuits, one by VoIP-Pal Inc. and another as a massive antitrust class action, are challenging the practices of telecom giants AT&T, Verizon, T-Mobile, and Deutsche Telekom. The lawsuits claim that the three major U.S. mobile service providers, who control over 97% of the smartphone market, are forcing consumers into unfair deals by tying and bundling Wi-Fi calling and mobile data with their regular cellular services. This "forced selling" strategy leaves customers with little choice but to purchase bundled services at inflated prices, violating their rights to fair competition and choice.
The lawsuits highlight blatant breaches of antitrust laws, including monopolization, restraint of trade, barriers to entry, price-fixing, exclusive dealing, and tacit collusion, all of which are illegal under the Sherman and Clayton Acts. These cases aim to break up these anti-competitive practices, restore genuine market competition, and give 373 million American consumers the ability to choose the services they need without being unfairly burdened by unnecessary and costly bundles.
Filed in the District of Columbia, Washington, D.C., USA:
VoIP-Pal Filing Case Number: 1:24-cv-02395, Document 1 Filed 08/17/24
Case for Class Action: 1:24-cv-02397, Document 1 Filed 08/18/24, Page 1 of 97
Bud Wayne Op-ed – August 19, 2024:
VoIP-Pal Files Antitrust Lawsuit Against AT&T, Verizon, T-Mobile, and Deutsche Telekom
Imagine paying just $6.50 a month for unlimited standalone Wi-Fi calling—no strings attached, no hidden fees—just crystal-clear communication at a price that won't break the bank. VoIP-Pal Inc. intends to make this a reality in what could be the legal showdown of the century. Now, imagine if a family of four could pay just $20 per month for unlimited Wi-Fi calling. This could significantly ease their financial burden, offering them affordable, reliable communication without being tied down to expensive bundles they don't need.
Under the determined leadership of CEO Emil Malak, VoIP-Pal Inc. is spearheading a monumental legal battle against some of the most powerful telecommunications companies in the world—AT&T, Verizon, T-Mobile, and Deutsche Telekom—alleging antitrust and anticompetitive violations of the Sherman and Clayton Acts. These actions are not just about corporate overreach; they represent a fight for the rights of millions of American consumers who have been unfairly burdened by these telecom giants. VoIP-Pal Inc. has developed Wi-Fi calling routing classification technology, with confirmed invention priority dates, that has allegedly been illegally deployed by the defendants.
In addition to VoIP-Pal's antitrust lawsuit, a separate class action lawsuit has been filed by a small group of plaintiffs against the same defendants. This independent lawsuit, representing 373 million American smartphone subscribers, mirrors many of the same allegations found in VoIP-Pal's case. Although the class action is independent of VoIP-Pal's antitrust suit, both lawsuits are closely aligned in their objectives and in the allegations of harm caused by the telecom giants—though they address different aspects of that harm to two distinct sets of plaintiffs.
Recognizing the alignment of their claims, the class action plaintiffs have entered into a third-party litigation funding agreement. This agreement allows for all legal fees and ongoing expenses to be fully paid by VoIP-Pal, subject to court approval. Despite their separate legal paths, the suits share a common goal: holding these powerful companies accountable and seeking justice for the different harms inflicted on the two groups of plaintiffs.
The complaints further accuse these telecom giants—who collectively control approximately 97% of the market—of abusing their market dominance through a collective monopoly. In addition to allegations of tying, bundling, and forced sales, the defendants are also accused of engaging in parallel conduct, including price-fixing and other anti-competitive practices. By leveraging their overwhelming control, these companies have forced consumers into unfair service bundles and offloaded their operational costs onto personal Wi-Fi networks, often without the consumer's knowledge or consent. These exploitative practices not only harm the 373 million American subscribers but also create a cartel-like effect that extends globally, impacting up to 7.4 billion people worldwide. The result is inflated costs, reduced choices, and a disturbing lack of transparency from companies that should be serving their customers, not exploiting them.
$286.56 Billion Class Action Restitution: A Historic Solution for Consumers but Manageable for the Defendants
While the restitution amount of $286.56 billion outlined in the class action may seem staggering at first glance, it's important to recognize that this figure is carefully structured to be both fair and manageable. The proposed restitution breaks down to just $12 per month, or $144 per year, per subscriber, spread over five years. This approach ensures that the financial impact on the defendants is substantial but not crippling, allowing them to continue operations while correcting the harm done.
The restitution is designed to be straightforward and practical. Instead of a direct cash payment, subscribers would receive an invoice reduction of $12 per month. This method not only provides immediate relief to the 373 million affected subscribers but also encourages the unbundling of currently bundled services, which would pave the way for standalone Wi-Fi calling at a reduced rate of about $6.50 per month—a move that could significantly expand the defendants' international subscriber base.
This plan balances the need for consumer restitution with the ongoing viability of the telecom giants. Although the total amount appears large, it reflects the scale of the telecom industry and the number of subscribers involved. By distributing the cost over five years, the approach ensures that these companies remain strong and competitive in the global market while also delivering historic justice to millions of consumers.
Both lawsuits call for the telecom giants to dismantle their forced service bundles, ensuring that subscribers have the option to choose low-cost, standalone services tailored to their needs. This approach aims to restore genuine choice and fairness in the telecom market, allowing consumers to select only the services they want without being forced into expensive packages.
Aiming for a Fair Outcome
An End to Bundling
The goal of VoIP-Pal's legal actions is simple yet profound: to achieve monetization for its shareholders while ensuring that consumers are provided with standalone Wi-Fi calling. This would put an end to compulsory and costly service bundles, finally giving consumers the choice they deserve. All the directors of the four defendant companies have been named in the complaints, and VoIP-Pal hopes they will do the right thing by resolving these matters.
For many families, this change could mean the difference between making ends meet or going without essentials like food and shelter. Imagine the relief for a family of four who could access unlimited Wi-Fi calling for just $20 a month, easing their financial stress and allowing them to focus on what really matters.
Moving Toward Real Change
VoIP-Pal's lawsuit is more than just a legal battle; it's a pivotal challenge against some of the most powerful forces in the telecommunications industry. When asked why VoIP-Pal is pursuing this lawsuit, its CEO Emil Malak told CEOCFO, "VoIP-Pal's hope is that these legal actions will pave the way for a more equitable future in telecommunications for the consumer." When asked if such antitrust breaches extend to iMessages, Facebook Messenger, WhatsApp, and Google Fi, he replied, "Please ask them!"
As VoIP-Pal continues its challenging journey, Emil Malak remains hopeful that justice will prevail. He recognizes that the road ahead may be difficult, but this fight is for the consumer, and VoIP-Pal is committed to seeing it through to the end. The company is grateful for the continued support of its shareholders.
Emil Malak's Perspective: A Determined Fight for Justice
Emil Malak, CEO of VoIP-Pal, has been at the forefront of the company's ongoing legal battles against Silicon Valley and major telecommunications companies for over eight years.
VoIP-Pal's long-standing legal struggles highlight a trend where large corporations exploit the patent litigation system, dragging out litigation to financially drain smaller, innovative companies like VoIP-Pal. This leads to stifling competition and innovation from smaller firms that drive progress in the industry.
Malak acknowledges the personal toll these battles have taken but remains determined, saying, "Maybe I am down, but I am not out." He believes that antitrust laws hold the potential to bring justice not just for VoIP-Pal but for countless other innovators facing similar challenges. "Antitrust justice is our hope," Malak asserts, expressing his belief that these legal antitrust actions are crucial steps toward achieving real justice and protecting innovation. His resolve underscores a deep sense of duty to his shareholders and a commitment to ensuring that VoIP-Pal's contributions to the industry are rightfully recognized and respected.
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