<P> Questions arose about the legality of Apple's arrangement after the iPhone was released . Two class - action lawsuits were filed against the company in October 2007: one in Federal court and the other in state court . According to the suits, Apple's exclusive agreement with AT&T violated antitrust law . </P> <P> The state - court suit, filed by the law office of Damian R. Fernandez on behalf of California resident Timothy P. Smith, sought an injunction barring Apple from selling iPhones with a software lock and $200 million in damages . In Smith v. Apple Inc., the plaintiffs said that Apple failed to disclose to purchasers its five - year agreement with AT&T when they bought iPhones with a two - year contract and cited the Sherman Act's prohibition of monopolies . </P> <P> The second case was filed in the United States District Court for the Northern District of California . The plaintiff, Paul Holman, filed a complaint against Apple and AT&T Mobility that he could not switch carriers or change SIM cards without losing iPhone improvements to which he was entitled . Holman also cited a Sherman Act violation by the defendants . On July 8, 2010, the case was affirmed for class certification . On December 9 the court ordered a stay on the case, awaiting the Supreme Court's decision in AT&T v. Concepcion (disputed whether the state's basic standards of fairness were met by a clause in AT&T's contract limiting complaint resolution to arbitration). On April 27, 2011, the Supreme Court ruled that AT&T met the state's fairness standards . </P> <P> The first advertisement for iPhone, titled "Hello", aired during the 79th Academy Awards on February 25, 2007, on American Broadcasting Company (ABC). On June 4, 2007, Apple released four advertisements announcing that iPhone would be released on June 29, 2007 . </P>

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