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T-Mobile Suing Starbucks Over Free Wi-Fi

Mon, 06/09/2008 - 8:19am
Teresa von Fuchs

T-Mobile USA has filed a suit against Starbucks, saying that the coffee company breached its contract by offering free wireless Internet access in a partnership promotion with AT&T. Starbucks recently began switching over its Wi-Fi service from its 7-year partnership with T-Mobile to AT&T; along with the switch in service, AT&T and Starbucks began offering free wireless access as part of its customer loyalty program.

T-Mobile claims that free access was not part of its handover agreement with Starbucks and AT&T and that it will be bearing the cost burden of providing the free services. Although Starbucks and AT&T hope to switch all 7,000 coffee shops to AT&T’s network by the end of this year, all but two locations are still on T-Mobile’s network.

T-Mobile reportedly said that Starbuck’s conduct has caused it “monetary damages” and will continue causing damage to the company “should Starbucks continue its breaching conduct.”

The carrier also said that the free promotion violates the transition agreement in that T-Mobile still had exclusive rights to market and sell Wi-Fi services at Starbucks until Jan. 4, 2009. T-Mobile reportedly said that in the agreement AT&T and Starbucks had only "limited rights" to promote their new partnership until after that time.

T-Mobile is seeking unspecified damages, legal fees and an order preventing Starbucks from breaching the transition agreement.

Starbucks responded to the suit, saying in a statement that its “goal is to ensure Wi-Fi access at all Starbucks locations. 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.”

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