US Library of Congress deems jailbroken iPhone legal, Apple shares down

On Monday, iPhone fans received a major boost when the Librarian of Congress James H. Billington added the practice of "jailbreaking" to a list of actions that don't violate the Digital Millennium Copyright Act (DMCA).

The decision was a victory for Electronic Frontier Foundation, a privacy rights advocacy group that had asked the Library of Congress to exempt programs for smartphones.

Follow us

Apple had vigorously challenged the group's arguments, saying they amounted to an attack on the company's "particular business choices" for the iPhone and the App Store.

Exempting jailbreaking would "destroy the technological protection of Apple's key copyrighted computer programs in the iPhone device itself and of copyrighted content owned by Apple that plays on the iPhone," Apple had said. Apple's strict control over iPhone and the App Store has helped the company sell over 50 million iPhones and over 3 billion apps to date.

Apple had also warned regulators that the nation's wireless carriers could suffer "potentially catastrophic" cyber attacks by iPhone hackers at home and abroad.

However, the Library of Congress, which oversees the Copyright Office, has ruled that jailbreaking a smartphone amounts to "fair uses."

"When one jailbreaks a smartphone in order to make the operating system on that phone interoperable with an independently created application that has not been approved by the maker of the smartphone or the maker of its operating system, the modifications that are made purely for the purpose of such interoperability are fair uses," the Library of Congress said, Monday, rejecting Apple's claim.

The Library of Congress' decision now means that iPhone users can jailbreak or unlock iPhones without fear of someone knocking on the door armed with a search warrant.

More specifically, it means that iPhone users can install and play any applications on iPhone, even those not permitted by Apple, and even choose to leave Apple's exclusive wireless partner AT&T's spotty network for better ones.

However, market analysts said it's too early for the victory jig because unlocking or jailbreaking the iPhone will still render iPhone warranty void.

According to Gleacher & Co. analyst Brian Marshall, iPhone users can now jailbreak or unlock their iPhones without fear of retribution from Apple but "when you do that you void the warranty."