Business | Technology

T-Mobile sues Starbucks over internet deal

Complaint says coffee chain breached contract by allowing AT&T to provide WiFi access

  • Bloomberg
  • Published: 00:05 June 8, 2008
  • Gulf News

New York: T-Mobile USA has sued Starbucks for allegedly breaching a contract by allowing AT&T to supply in-store customers with free wireless internet access using T-Mobile's lines and equipment.

T-Mobile, which said it agreed to provide WiFi service at Starbucks in 2002, accused the largest chain of developing a plan to let AT&T to provide free internet service at more than 7,000 US Starbucks stores.

T-Mobile said it is bearing the cost and burden of the "free" WiFi service offer, because it provided equipment and technology at "thousands" of Starbucks stores in the US.

"The conduct of Starbucks has caused T-Mobile monetary damages and such damages will continue should Starbucks continue its breaching conduct," T-Mobile said.

Starbucks' deal with AT&T violates a transition agreement that gave T-Mobile rights to market and sell WiFi internet access at Starbucks stores until January 4, 2009, T-Mobile said in the lawsuit, filed June 5 in New York State Supreme Court in Manhattan.

The agreement gave AT&T and Starbucks "limited rights" to promote the transition of WiFi service providers.

T-Mobile said only two markets, San Antonio and Bakersfield, California, have fully converted from T-Mobile to AT&T, the biggest US phone company.

T-Mobile said Starbucks gives free WiFi service using T-Mobile's equipment and lines to anyone with a Starbucks Internet Card, which causes "risks of spikes in usage, drains on that network and T-Mobile's resources and therefore causes delays, frustrations and other harm to all users of T-Mobile's network."

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