CEOCFO MAGAZINE
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THE LOCK AND THE KEY
Four Combined Federal Antitrust and Class Action Cases
Four coordinated federal antitrust and class action cases now pending before the United States District Court for the District of Columbia have placed a rarely examined question before the courts: why can’t the 373 million Americans who own smartphones use their existing Wi-Fi connections as a standalone alternative to conventional carrier calling? The complaints filed in these actions collectively seek damages that, as alleged and subject to proof, could reach approximately $910 billion under applicable antitrust law. CEOCFO Magazine sat down with Emil Malak, Chairman and Chief Executive Officer of VoIP-Pal.com Inc., to understand what his company is alleging, why it matters, and where the litigation stands.
By Bud Wayne
Senior Contributing Editor, CEOCFO Magazine
ONE DAVID. SIX GOLIATHS.
On one side of the litigation are Apple, Alphabet (Google), Samsung, AT&T, Verizon, and T-Mobile — companies whose combined annual gross profits, as reflected in their public SEC filings, exceed approximately $500 billion. On the other is VoIP-Pal.com Inc., a small technology company whose subsidiary Digifonica spent more than two decades developing internet-based telephony technology now reflected in a portfolio of approximately 40 issued patents. These four cases pit that small company against six of the most powerful technology and telecommunications organizations in the world.
THE CASES
Four related federal actions are currently pending in the U.S. District Court for the District of Columbia:
• VoIP-Pal.com Inc. v. Apple et al. (No. 1:25-cv-01843) — platform enforcement
• Inza v. Apple et al. (No. 1:25-cv-01970) — platform class action
• VoIP-Pal v. AT&T et al. (No. 1:24-cv-03051) — carrier authorization
• Leon v. AT&T et al. (No. 1:24-cv-03054) — carrier class action
VoIP-Pal has filed responses to motions to dismiss in the platform cases and an opposition to a motion to compel arbitration. The central question the complaints put before the Court is whether the absence of standalone Wi-Fi calling in the United States reflects technological necessity — or structural rules embedded in the modern smartphone ecosystem. According to the complaints, the answer involves the interaction of two elements the filings describe as the “Lock and Key.”
STANDALONE WI-FI CALLING
At its core, the complaints frame this litigation as a consumer choice question. Consumers already pay for their smartphones. They already pay for Wi-Fi connections in their homes, workplaces, and public spaces. According to the filings, the question before the Court is whether they have ever had a meaningful opportunity to use that connectivity as a standalone calling alternative without maintaining a conventional carrier subscription.
Modern smartphones are, as described in the complaints, technically capable of transmitting voice calls over ordinary Wi-Fi connections — a capability that already exists on devices used by millions of people today. In practical terms, the complaints suggest that some consumers might choose to rely primarily on Wi-Fi for everyday calls and purchase limited cellular minutes only when outside Wi-Fi coverage. According to the filings, an independent Wi-Fi-based calling service could potentially provide full native telephony functionality — including dialer integration, call logs, and emergency calling — at a fraction of current carrier costs. Such a service does not currently appear to exist as a parity-grade native telephony replacement integrated at the operating-system level in the United States. Whether its absence reflects technological necessity or structural market conditions is the central question the complaints place before the Court.
A Question Worth Asking
When a subscriber travels internationally and places a call over Wi-Fi — using a network they are already paying for — a daily roaming charge of approximately $10 to $15 may still apply. In situations where a call appears to be carried over Wi-Fi rather than a cellular network, what exactly is that daily fee purchasing?
WHAT IS OFFLOADING — AND WHO REALLY BENEFITS?
To understand what VoIP-Pal is alleging, it helps to start with a simple concept: offloading.
When a Wi-Fi call is made, it does not travel through a carrier’s cellular towers. It rides over a Wi-Fi connection — a home, workplace, or public network the subscriber already pays for separately. The carrier’s spectrum goes unused. Tower demand drops to zero. The cost to route that call is nominal. Yet access to Wi-Fi Calling remains tied to the full cellular subscription.
That is offloading. The call moves to the subscriber’s network. The savings stay with the carrier.
Cui bono — who benefits?
Carriers benefit from reduced spectrum usage, lower tower costs, and reduced infrastructure investment. They also benefit from something more fundamental: the phone subsidy model. When a carrier offers a $1,200 smartphone for little or nothing upfront, that subsidy is recouped through the long-term subscription that follows. The phone is the hook. The monthly bill is the return. If a subscriber could instead choose a standalone Wi-Fi calling plan at $6.50 per month, that subscription revenue would no longer support the cost of subsidizing the device.
Platform providers benefit first and foremost from that same subsidized phone model — a $1,200 device placed in the subscriber’s hands at little or no upfront cost creates an immediate and captive ecosystem participant, locked into the platform’s operating system, app store, and services from day one. On top of that foundation, platform providers benefit further through deep device integration, sustained ecosystem engagement, and app-based revenue tied directly to carrier-enabled functionality.
The subscriber, meanwhile, pays for the cellular plan that enables access and the Wi-Fi connection that carries the call — with no corresponding reduction in price as the call quietly moves off the carrier’s network entirely.
Whether that structure reflects ordinary market evolution — or raises broader questions about how access to modern communication has been arranged — is now before the Court.
THE LOCK AND THE KEY
Every smartphone operating system contains rules determining how applications interact with the device’s native telephony functions. According to the complaints, a service that receives full system-level privileges can integrate with the device’s dialer, receive incoming calls in the background, connect with emergency services, and function similarly to traditional phone service. Without those permissions, a calling application operates only as a supplement to conventional cellular service, not a replacement for it.
The complaints allege that platform-level rules — the “Lock” — determine which services receive those privileges. A second layer follows: even where operating-system access might otherwise be available, native telephony functions are activated through carrier-issued network credentials — the “Key.” According to the filings, equivalent authorization is not available to independent Wi-Fi calling providers through the same pathway. The complaints suggest that together, these two mechanisms condition access to full native telephony functionality on the purchase of a carrier subscription bundle.
Whether that structure has implications under federal competition law is the question now before the Court.
373 MILLION SUBSCRIBERS
The complaints define the relevant population as approximately 373 million smartphone subscribers in the United States. Public data from the U.S. Census Bureau, the FCC, and the Department of Veterans Affairs illustrates the breadth of that population — spanning a wide range of income levels, household structures, and demographic groups, including millions of households that participated in federal connectivity programs, individuals living below the federal poverty line, veterans, and older Americans living alone.
The complaints allege that these subscribers cannot independently negotiate the terms under which native smartphone telephony functionality is made available to them, nor alter those conditions on their own. The broader issue, as described in the pleadings, concerns both VoIP-Pal’s ability to commercialize its technology and the potential availability of lower-cost voice alternatives for American consumers.
A CONVERSATION WITH EMIL MALAK
CEOCFO: Many smartphone users assume that standalone Wi-Fi calling simply isn’t possible because of technical limitations — that you must subscribe to a carrier package to use your phone’s native calling functions. Is that assumption accurate?
Malak: That assumption is very common, but as alleged in the complaints, the technology itself is not the obstacle. From a technical standpoint, standalone Wi-Fi calling could exist as an independent service if the necessary operating-system permissions and network authorizations were available through the existing ecosystem.
Smartphones already support voice calls over Wi-Fi — devices switch to Wi-Fi calling today when the cellular signal is weak. What is difficult for the average consumer to see is the technical link between two separate layers of the smartphone ecosystem: the carrier authorization systems and the operating-system permissions that govern access to native telephony functions. Those layers are handled by different industry participants and are completely invisible to most subscribers.
The reason we used the phrase “Lock and Key” in the complaints was to make that relationship understandable. The operating-system permissions function as the Lock; the carrier authorization functions as the Key. The point of the analogy is not to change the technology but to explain a complex technical relationship clearly enough that an ordinary reader — and ultimately the Court — can understand what is being alleged. What the Court is being asked to examine is how access to native standalone Wi-Fi calling is structured within the current smartphone ecosystem and whether that structure is consistent with federal competition law.
CEOCFO: Over the last ten years, VoIP-Pal has been involved in litigation involving companies such as Apple, Alphabet/Google, Samsung Electronics, Huawei, Amazon, Twitter, Facebook, AT&T, Verizon Communications, and T-Mobile US. How do you view the experience of pursuing disputes involving organizations of that scale?
Malak: Large technology and telecommunications markets inevitably involve large companies. Apple and Google together control the two operating systems that run virtually every smartphone in the United States. Samsung, Huawei, and Amazon have each been among the world’s largest device manufacturers. Twitter and Facebook, at the time of our disputes, were two of the most widely used communications platforms in the world. AT&T, Verizon, and T-Mobile together control over 97% of the U.S. smartphone subscriber base.
When questions arise about how new technologies interact with systems of that scale — systems that touch hundreds of millions of people — those questions sometimes end up being addressed through the courts. That is not unusual. It is how the legal process is designed to work.
Our role throughout has been consistent: present the issues, support them with evidence, and allow the legal process to evaluate them on the merits. The scale of the companies on the other side of these disputes has never changed what we believe the evidence shows, and it has never changed our obligation to pursue what we believe are well-founded claims through the proper legal channels.
Ultimately, the outcome in any case is determined by the evidence and the law — not by the size of the parties.
CEOCFO: Some observers suggest that after more than a decade of disputes with major technology companies and the three largest wireless carriers, you may have made some powerful enemies. How do you think about that?
Malak: Public perception can vary when complex industry questions are raised. My role has never been to seek approval from large corporations. My responsibility is simply to pursue what I believe is a fair opportunity for innovation and competition through the legal process.
“You have enemies? Good. That means you stood up for something, sometime in your life.”
— Often attributed to Winston Churchill
Ultimately, the outcome will not be determined by popularity. The issues now before the United States District Court for the District of Columbia will be evaluated on the evidence and the law, and the Court will determine the result.
All four actions are pending before Judge Randolph D. Moss. Motions to dismiss are currently before the Court. All information referenced in this article is drawn from publicly filed court documents, publicly available financial disclosures, and public government sources.
Bud Wayne
Senior Contributing Editor
CEOCFO Magazine
NOTE: This content is not the view of nor endorsed by CEOCFO Magazine or its advertisers.
