T-Mobile and Starbucks Going To Court Over Wi-Fi Deal

By Diane Smith
00:56, June 8th 2008
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T-Mobile and Starbucks Going To Court Over Wi-Fi Deal

Just days after Starbucks' recent partnership with AT&T Internet Services offering customers free Wi-Fi Internet access, T-Mobile USA Inc., the company's pre-existing wireless Internet service partner, filed a lawsuit against the coffee chain accusing it of breach of contract, interference and unfair competition.

According to Reuters, the 12-page complaint, which was filed June 5 in New York State Supreme Court in Manhattan, alleges that AT&T and Starbucks Corp are not living up to an agreement the three companies reached over how Starbucks should transfer from its T-Mobile partnership to a new partnership with AT&T announced earlier this year.

T-Mobile, which had been exclusively providing Wi-Fi service at Starbucks since 2002, accused Starbucks of "secretly" developing a promotional plan to allow AT&T provide free Internet service at more than 7,000 US Starbucks stores. T-Mobile said it is bearing the cost and burden of that offer, because it still provides equipment and technology in all but two of Starbucks' U.S. markets.

"The conduct of Starbucks has caused T-Mobile monetary damages, and such damages will continue should Starbucks continue its breaching conduct," T-Mobile said. As the original provider for Starbucks, T-Mobile was to maintain "the exclusive right to ‘sell, market and promote its services’ in Starbucks stores until those stores were fully converted to the AT&T system."

Starbucks spokeswoman Stacey Krum released a statement defending the company's decision by placing its costumers' needs first, " This is a benefit offered to our Starbucks Card Rewards members as well as AT&T subscribers and steps are being taken to ensure that this access continues."

Starbucks' new deal with AT&T, gives users of Starbucks' prepaid card two free, consecutive hours of Wi-Fi access daily at each of the chain's 7,000 participating U.S. location. The promotional plan will work for new card holders as well as those already participating in the Starbucks Card Rewards program.

T-Mobile is seeking unspecified damages against Starbucks for breach of its contract and unfair competition.



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