Apple faces $350M in damages from iTunes antitrust suit first filed in 2005

Posted:
in iPod + iTunes + AppleTV edited December 2014
Though Apple and record labels abandoned digital rights management protection in iTunes Store music purchases years ago, an antitrust lawsuit on the matter first filed in 2005 is set to go to trial this week.

iTunes TOS


The class-action lawsuit filed nearly a decade ago by Thomas Slattery originally alleged that Apple violated federal antitrust laws and California's unfair competition law by requiring that customers use an iPod to listen to music purchased from the iTunes Music Store. Apple managed to have some claims struck from the complaint in 2005, but was not successful in having the lawsuit dismissed.

The suit originally centered around RealNetworks, which caused a controversy in July 2004 when it released a workaround allowing songs purchased from its store onto Apple's iPod. The lawsuit took issue with Apple's "refusal to license FairPlay technology to other companies," but those claims were dismissed in December of 2009.

What remains is an allegation that Apple attempted to maintain a monopoly on the portable media player and downloadable music markets by issuing updates to FairPlay, its DRM that locked iTunes purchases to Apple devices.

Of course, since the lawsuit was filed, Apple negotiated a deal with record labels to drop DRM from music purchases in 2009. But the lawsuit carried on, and Jobs himself, months away from death, was compelled to testify in the case in 2011.

Lawsuit


Jobs's 2011 deposition, as well as emails obtained through the lawsuit, are expected to play a major part in the antitrust suit, as noted by The New York Times. Potential damages of around $350 million could be imposed on Apple if it were to lose the trial, which begins in Oakland, Calif., this week.

A few emails sent by Jobs have already been made public, with more expected to be unveiled as the trial gets underway. One of the already-released emails shows Jobs concerned that Music Match was launching its own digital storefront, and he wanted to be sure their content could not be transferred to an iPod.

Other testimony in the trial is expected to come from Apple marketing chief Phil Schiller, and iTunes head Eddy Cue.

U.S. District Court Judge Yvonne Gonzales Rogers moved the lawsuit toward trial phase in October, setting the stage for Tuesday's start date. Plaintiffs seek $350 million in damages for customers who purchased iPod classic, iPod shuffle, iPod touch and iPod nano models between Sept. 12, 2006 and March 31, 2009.
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Comments

  • Reply 1 of 61
    MacProMacPro Posts: 17,717member
    They should give Apple an award for freeing up music!
  • Reply 2 of 61
    rob53rob53 Posts: 1,933member

    "...caused iPod prices to be higher than they otherwise would have been." Sounds like someone was rubbing the crystal ball or trying to apply 19th century economics to 21st century products. When will these people and lawyers just give up on this fiasco. Apple was doing what every other product manufacturer has done, they were protecting their investments. Apple developed the iPod and iTunes music store. We could always add our own ripped music to the iPod so nobody was actually hurt. I hope Apple actually gets a fair jury trial filled with iPod users who will see through this garbage and force the plaintiffs to pay for the trial. (I believe this can be done in CA)

  • Reply 3 of 61

    I think you're missing the point Rob. Apple doesn't have the right to protect music under whatever format they want. Once I buy the rights to that song, I own the rights to it, and should have the ability to listen to it any way I want. I have been complaining about this for years- Apple has been pulling this underhanded nonsense for way too long. They need to recognize their customers are also, not to mention the majority, users of other platforms. Apple is trying to strongarm people into their products by pulling nonsense like this. I hope they pay.

  • Reply 4 of 61

    Funny, I ripped dozens of CD's and loaded them onto my iPod...

  • Reply 5 of 61
    Another day, another moronic lawsuit.
  • Reply 6 of 61
    maestro64maestro64 Posts: 4,311member

    They should have sued the government since they were the ones that required that DRM be used on digital content. Apple was only enforcing the copy protection laws the government mandated if content owners did not want their products in the free domain.

     

    Plus as time has shown this who law suite is a moot point, you can put any content on an Ipod or any digital player today. 

     

    The only reason they are still suing is over the emails Steve Jobs did not want itunes store being replaced. I will bet that Apple will loose over this this as they did on the book pricing fixing, it all came down to jobs emails. I surprised Steve never learn never to put anything in writing.

  • Reply 7 of 61
    The sloth, sloppiness, and sheer stupidity of the US justice system is beyond belief, when it comes to tech.

    It is a damn embarrassment.
  • Reply 8 of 61
    macxpressmacxpress Posts: 4,601member
    Quote:
    Originally Posted by TheWhiteFalcon View Post

     

    Funny, I ripped dozens of CD's and loaded them onto my iPod...


     

    I think the issue is...customers purchased songs off the iTunes Store with DRM which was made so it only played on iPods and it also locked out other DRM solutions such as FairPlay so it could not play on iPods. I believe however that the updates didn't purposely break FairPlay if I remember correctly. There was something that just happened to break it. It was quite a while ago, but something sticks in my mind about Apple not purposely breaking FairPlay DRM.

     

    I'm not saying I agree with this lawsuit, in fact I think its kinda stupid but I don't think ripping CDs and syncing them to an iPod was the issue. 

     

    I think Apple has fixed this issue already to be honest. No songs are DRM today and EVERYONE had the opportunity to fix their songs so they weren't DRM anymore and therefore, could play on anything they wanted to. This is what I don't get about the entire thing. The fix was provided. 

     

    After this we should sue Apple because OS X can only be installed on a Mac and it purposely makes OS X so it only works on a Mac. Hell...why not?

  • Reply 9 of 61
    lkrupplkrupp Posts: 6,440member
    Quote:

    Originally Posted by SpamSandwich View Post



    Another day, another moronic lawsuit.



    Just to play devil’s advocate what if, back in the day, CDs had been released that could only be played on Sony CD players? You buy the CD, it’s yours but you MUST buy a Sony player in order to listen to it. Isn’t that what this lawsuit is really about? It’s not the DRM itself, it’s the fact that those tracks could only be played back on an Apple device because Apple would not license the Fairplay DRM. If the DRM had been some cross platform, universal format (like DVDs) that other manufacturers could license I don’t think this particular lawsuit would have happened.

  • Reply 10 of 61
    arlorarlor Posts: 477member
    Quote:

    Originally Posted by macxpress View Post

     

    After this we should sue Apple because OS X can only be installed on a Mac and it purposely makes OS X so it only works on a Mac. Hell...why not?


     

    Doesn't matter. Jarndyce and Jarndyce drones on.

  • Reply 11 of 61
    Quote:

    Originally Posted by macxpress View Post

     

     

    I think the issue is...customers purchased songs off the iTunes Store with DRM which was made so it only played on iPods and it also locked out other DRM solutions such as FairPlay so it could not play on iPods. I believe however that the updates didn't purposely break FairPlay if I remember correctly. There was something that just happened to break it. It was quite a while ago, but something sticks in my mind about Apple not purposely breaking FairPlay DRM.

     

    I'm not saying I agree with this lawsuit, in fact I think its kinda stupid but I don't think ripping CDs and syncing them to an iPod was the issue. 

     

    I think Apple has fixed this issue already to be honest. No songs are DRM today and EVERYONE had the opportunity to fix their songs so they weren't DRM anymore and therefore, could play on anything they wanted to. This is what I don't get about the entire thing. The fix was provided. 

     

    After this we should sue Apple because OS X can only be installed on a Mac and it purposely makes OS X so it only works on a Mac. Hell...why not?




    There was always a way around that too, burn the iTunes music onto a CD and reload it into Windows Media Player or what have you.

  • Reply 12 of 61
    rogifanrogifan Posts: 10,669member
    OT: anyone know why Apple took a big drop this morning and is now down almost 3%? Yeah the market overall is down this morning but not that much.

    EDIT: now it's down 5%. Why?
  • Reply 13 of 61
    So Apple is being sued for not violating the DMCA? Did Microsoft also get sued for having their own DRM system that wasn't wouldn't allow music purchased with it to play on the iPod?

    Everyone who bought music from Apple can still play it all. People have lost access to their purchased music if they bought it with Microsoft's system, which ended up telling customers to violate the DMCA to keep their music.
  • Reply 14 of 61
    Quote:

    Originally Posted by Rogifan View Post



    OT: anyone know why Apple took a big drop this morning and is now down almost 3%? Yeah the market overall is down this morning but not that much.



    EDIT: now it's down 5%. Why?



    I'm not sure. The headlines in the Stocks app don't indicate any reason they should be down that low (or at all, honestly).

     

    Especially since Microsoft is up.

  • Reply 15 of 61
    boredumbboredumb Posts: 1,406member

    File this under, "No good deed goes unpunished".

     

    Didn't this come up just a few months ago?

    Isn't it clear there have always been workarounds and alternatives?

    Wasn't iTunes always at least, and for quite some now time,

    a good deal more accessible than eBook platforms are, even today?

     

    ?...I wonder how it sounds when Thomas Slattery plays his vinyl on his cassette player?

  • Reply 16 of 61
    boredumbboredumb Posts: 1,406member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

    Quote:
    Originally Posted by Rogifan View Post

    OT: anyone know why Apple took a big drop this morning and is now down almost 3%? Yeah the market overall is down this morning but not that much.

    EDIT: now it's down 5%. Why?

    I'm not sure. The headlines in the Stocks app don't indicate any reason they should be down that low (or at all, honestly).

    Especially since Microsoft is up.


    Typical market anti-correction?

  • Reply 17 of 61
    rogifan wrote: »
    OT: anyone know why Apple took a big drop this morning and is now down almost 3%? Yeah the market overall is down this morning but not that much.

    EDIT: now it's down 5%. Why?

    Automated trading. One point of irrationality quickly spreads because of limits placed to prevent losses. I suspect Apple is already buying up more of their shares based on this wild movement.
  • Reply 18 of 61
    rogifanrogifan Posts: 10,669member
    Automated trading. One point of irrationality quickly spreads because of limits placed to prevent losses. I suspect Apple is already buying up more of their shares based on this wild movement.

    I figured it had to be something like that. The stock was basically flat near the open and then all of a sudden its down over 3%.
  • Reply 19 of 61
    rogifan wrote: »
    I figured it had to be something like that. The stock was basically flat near the open and then all of a sudden its down over 3%.

    Whenever I see massive fluctuations up and down in the stock price, I immediately suspect automated trading. It's a red flag.

    8af.gif
  • Reply 20 of 61
    Quote:
    Originally Posted by lkrupp View Post

     



    Just to play devil’s advocate what if, back in the day, CDs had been released that could only be played on Sony CD players? You buy the CD, it’s yours but you MUST buy a Sony player in order to listen to it. Isn’t that what this lawsuit is really about? It’s not the DRM itself, it’s the fact that those tracks could only be played back on an Apple device because Apple would not license the Fairplay DRM. If the DRM had been some cross platform, universal format (like DVDs) that other manufacturers could license I don’t think this particular lawsuit would have happened.


    DVD's are not universal. They have region codes. 

    About this lawsuit, I'm wondering if Apple was even allowed to license FairPlay by the labels. The whole iTunes thing started with Rip,Mix,Burn. Apple never cared for the DRM on music. They did it only to get the labels on board, and got rid of it as soon as the labels were OK with it. DRM was a significant fraction of the problems support had to deal with, it cost Apple money.

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