Woman sues Apple for $1 million over iPhone price drop

Company dropped it by $200, she's alleging ‘price discrimination’

SAN JOSE, Calif. - A New York woman is so angry at Apple Inc. for lopping $200 off the price of the iPhone that she's filed a lawsuit seeking $1 million in damages. Dongmei Li of Queens, N.Y., claimed the company violated price discrimination laws when it slashed the price of the 8-gigabyte iPhone by a third, from $599 to $399, within two months of the gadget's June debut.

Apple lowered the iPhone's price on Sept. 5 and also said it would stop selling the $499 4-gigabyte model. Hundreds of early customers who paid full price didn't expect a reduction so soon and complained.

Apple issued an apology the next day. Under its return policy, Apple refunded the $200 difference for those who bought the phone within 14 days of the reduction. And in a move to make peace with those who purchased the higher-priced phone before that period, the company offered a $100 credit at Apple stores.

According to Li's lawsuit, filed on Sept. 24 in the U.S. District Court, Eastern District of New York, the price reduction injured early purchasers like herself because they cannot resell the product for the same profit as those who bought the cell phone following the price cut.

Li purchased a 4GB iPhone for $499 and alleged that owners of the 4GB model were given less favorable terms than those who bought the 8GB model at the premium price, according to the lawsuit.

Apple spokeswoman Susan Lundgren declined to comment, citing the company's policy to not discuss pending litigation.

The lawsuit also named AT&T Inc., the exclusive carrier in the U.S. for the iPhone, and alleged the two companies' required two-year service contract for the iPhone constituted unfair business practices.

Mark Siegel, an AT&T spokesman, declined to comment, saying he had not yet seen the lawsuit.