Apple, AT&T to settle unlimited iPad data lawsuit

A California judge has signed off on the details of a settlement between Apple (NASDAQ:AAPL) and AT&T (NYSE:T) and customers who claimed they were tricked into buying an Apple iPad in 2010 only to have AT&T then switch its unlimited data plans to a usage-based pricing system.

In a ruling issued this week in San Jose, U.S. District Judge Ronald Whyte agreed to a settlement where Apple will give $40 to everyone in the United States who bought or ordered an iPad 3G before June 7, 2010, according to GigaOM. Further, customers who didn't sign up for AT&T service will get a $20 per month discount on the carrier's 5 GB monthly plan for up to a year.

The settlement is scheduled to receive final approval in February.

The settlement stems from a lawsuit filed in June 2010 that claimed that the two companies "baited" customers into purchasing an iPad 3G with prepaid unlimited data plans "only to have that promise reneged upon within weeks of their purchases."

"I would have never purchased a 3G-capable iPad if I knew Apple and AT&T were planning on suddenly taking away from me the freedom to opt in and out of an unlimited data plan at my choice," commented plaintiff Adam Weisblatt in a statement distributed by law firm Lieff Cabraser Heimann & Bernstein in 2010.

AT&T initially offered unlimited data services on Apple's iPad, but subsequently replaced those plans with metered data services:  Under AT&T's new plans, customers who buy smartphones and iPads can pay $15 per month for 200 MB of data or $25 per month for 2 GB of data, with extra charges for additional data. At the time, AT&T said customers who had bought an iPad 3G with an unlimited data plan could keep that plan, although if a subscriber skips a month of data fees they lose the right to go back to the unlimited plan.

It's unclear exactly how much the settlement could cost AT&T and Apple; the two companies have generally declined to comment on the proceedings in the case. The ultimate payout would also depend on how many customers filed the necessary paperwork in order to receive the payout, if the settlement is indeed aprpvoed.

In other unlimited data news, a number of publications reported that Verizon Wireless (NYSE:VZ) customers who still have unlimited data plans are currently not being required to change to metered data plans when they upgrade their phone. Previously, Verizon said customers with an unlimited data plan who purchased a subsidized phone would have to relinquish their unlimited plans for a usage-based plan.

Engadget said Verizon couldn't immediately comment on the situation.

However, the situation apeared to be due to a glitch in Verizon's activation system that was quickly closed, according to reports.

The uproar around unlimited data services is notable considering Verizon Communications Chairman and CEO Lowell McAdam recently said that there is going to be a point where operators hit a ceiling in terms of available bandwidth. "If you are allowing unlimited, you will run out of gas. It's physics," he said.

For more:
- see this GigaOM article
- see this Android Central article
- see this Engadget article

Related Articles:
Verizon's McAdam dismisses unlimited data plans: 'You will run out of gas'
Sprint guarantees unlimited data for life
AT&T, Apple facing expanded lawsuit over iPad data rate changes

Article updated Sept. 30 with new information about Verizon's unlimited data offer.

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