BlackBerry Users Sue Research In Motion

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RIM is in the embarrassing position of being sued by its own customers for the recent service outage

Research in Motion is facing another class action lawsuit, but this time it is not angry shareholders but rather its own customers that are bringing the company to account.

The Canadian lawsuit was filed on Wednesday in the province of Quebec on behalf of all BlackBerry owners in Canada.

Meanwhile BlackBerry users in America have also sued the Canadian company, after a lawsuit was filed on Wednesday in a federal court in Santa Ana, California, on behalf of all BlackBerry owners in the US who had an active service agreement at the time of the email, Internet and messaging interruptions.

Class Actions

The suit accuses Research in Motion of breach of contract, negligence and unjust enrichment, according to Reuters. The US lawsuit was brought by Eric Mitchell, who lives in Sherman Oaks, California.

Mitchell had a BlackBerry contract via the US operator Sprint, at the time of the outage, and is reportedly seeking damages including cash compensation for service fees as well as legal costs. Meanwhile, the Canadian lawsuit asks for refunds for loss of service, asking RIM to “take full responsibility for these damages.”

Research In Motion is known to have approximately 16 million customers in the United States, and the company reportedly earns at least $3.4 million (£2.1m) per day in service revenue.

What is not clear at this time is how many BlackBerry users in North America are actively supporting these lawsuits.

Service Outage

The lawsuits come after RIM was left reeling following a four day service outage for the BlackBerry platform, which the company blamed on a “core switch failure” within its infrastructure.

The failure initially affected half of BlackBerry’s 70 millions users worldwide, mostly in Europe, the Middle East and Africa (EMEA). But then the outages also spread to North America. It took RIM four days to fully recover its service.

RIM’s co-CEO Mike Lazaridis produced this short YouTube video in which he publicly apologised for the outages and said that RIM would work hard to regain customers’ trust following the incident. And the company has offered free apps to users affected by the outage.

But many BlackBerry users remain furious at the outage, and the time it took to fix the issue. One investor called for the company to sack its chief executives and put itself up for sale. Jaguar Financial Corp began a campaign in September, to get co-CEOs Jim Balsillie and Mike Lazaridis removed from the company and to have the company sell itself in pieces.

RIM is of course also being sued by other investors, who claim that the management kept investors in the dark about product delays and lukewarm launches, which they, it is alleged, knew would hurt earnings.

Unhappy Users?

The customer lawsuits come after two recent surveys pointed to widespread unrest within RIM’s customer bases.

A recent survey of more than 1,000 BlackBerry customers by shopping comparison website Kelkoo, revealed that one in five users are considering dumping their BlackBerrys and opting for another handset supplier. To make matters worse, this survey was taken before the recent service outages.

Meanwhile a survey from Enterprise Management Associates found that more than 30 percent of BlackBerry users in large enterprises (those with greater than 10,000 employees) expect to migrate to a different platform within the next year.

But perhaps more serious for the company is the fact that RIM is also battling a shrinking market share. In response RIM is touting its forthcoming QNX-based smartphones, that will run the BBX operating system. This, it hopes, will put the platform on a more competitive footing with the likes of Apple’s iPhone and Google’s Android.

Meanwhile RIM’s Playbook tablet is reportedly not selling in huge numbers, and RIM has revealed that it has delayed a software update for PlayBook till early in 2012. It has also pushed the arrival of native email on the tablet even further into the future.

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Author: Tom Jowitt
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