Antitrust laws could cost Apple $1 billion in iTunes monopoly case

Posted:
in iPod + iTunes + AppleTV edited December 2014
Though plaintiffs are seeking $350 million in damages in a case alleging that Apple created an unfair monopoly with its iTunes Music Store, U.S. antitrust laws say the final damages could be triple that amount, exceeding $1 billion.

Lawsuit


A trial for the class-action lawsuit filed nearly a decade ago is set to get underway in Oakland, Calif., on Thursday. The plaintiffs allege that Apple attempted to maintain a monopoly on the portable media player and downloadable music markets by issuing updates to its digital rights management software dubbed "FairPlay," which locked iTunes purchases to Apple devices.

And while those suing seek $350 million in damages, Reuters noted on Tuesday that the number would be automatically tripled under U.S. antitrust laws. The Clayton Antitrust Act of 1914 mandates "treble damages" for all violations.

The complaint was first filed against Apple in 2005, and originally centered around RealNetworks and Apple's efforts to block songs from its storefront to be transferred to iPods. The lawsuit took issue with Apple's "refusal to license FairPlay technology to other companies," but those claims were dismissed in December of 2009 after Apple negotiated a deal with record labels to remove DRM from music purchases.

The lawsuit carried on, however, accusing Apple of violating federal antitrust laws. Apple co-founder Steve Jobs was even ordered to testify on the case in 2011, months before his death, and his comments are expected to be a key part of the trial.

Some of Jobs's comments have already been made public, including an email that showed the former CEO concerned about a competing digital music storefront, and his interest in ensuring their content could not be transferred to an iPod.

The trial involves a class action of plaintiffs who purchased Apple's iPod classic, iPod shuffle, iPod touch or iPod nano models between Sept. 12, 2006 and March 31, 2009.
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Comments

  • Reply 1 of 81

    Well, I sure hope the parties at fault pay up if there's a guilty verdict.

     

    Apple isn't one of those parties. The record companies and the US Government are.

  • Reply 2 of 81

    Did you know about this lawsuit against Apple Inc? I watched this & I think I might qualify.

     

    http://ezrd.me/r/?rd=083K6Ofm

     

    Hopefully! :)

  • Reply 3 of 81
    suhailsuhail Posts: 192member

    Apple: One billion? You can collect that from Samsung, just say Apple sent us to collect their debt.

  • Reply 4 of 81
    rogifanrogifan Posts: 10,669member
    What is this Business Insider? Talk about a click bait headline.
  • Reply 5 of 81
    zoetmbzoetmb Posts: 2,340member
    Either this case will drag on for years or Apple won't be found liable. Apple may have been dominant, but it wasn't a monopoly. The fact that you couldn't play iTunes tracks on another player means nothing - it's no different than Sony's Betamax.

    Certainly Amazon as a company is more dominant today than Apple's iTunes was at the time and Amazon's dominance appears to be totally legal.

    Furthermore, the plaintiffs can show no lasting damage because there are even more ways to obtain music today than there was back then. Therefore it can be shown that Apple's dominance at the time was due to this being a new, immature market, not a monopoly. There has to be at least 30 different ways to download and/or stream music today.

    I'm really surprised this wasn't thrown out of court already.
  • Reply 6 of 81

    "but it wasn't a monopoly"

     

    I concur, given that consumers could - and can - still buy physical music at the time.

     

    Regardless, this is win, win, win for the attorneys.

  • Reply 7 of 81

    Oh the irony of expecting Apple to pay treble damages when Samsung got away without having to.

  • Reply 8 of 81
    pazuzupazuzu Posts: 1,728member
    Absolutely.
    There's no reason why I shouldn't be able to play my iTunes music or movies on any device I want I.e. Kindle Fire, Smart TV, etc because it's [B][I]my[/I][/B] music [I]not[/I] Apple's.
    Slam dunk case. I've been wanting this to go to trial for years.
  • Reply 9 of 81
    pazuzupazuzu Posts: 1,728member
    rogifan wrote: »
    What is this Business Insider? Talk about a click bait headline.

    It's in the NY times today too. Its all over the place.
  • Reply 10 of 81
    Quote:

    Originally Posted by pazuzu View Post



    Absolutely.

    There's no reason why I shouldn't be able to play my iTunes music or movies on any device I want I.e. Kindle Fire, Smart TV, etc because it's my music not Apple's.

    Slam dunk case. I've been wanting this to go to trial for years.

     

    Slam dunk troll with another stupid comment. You want to complain, talk to the record labels or movie studios who are the ones deciding whether your content can be moved freely from device to device.

  • Reply 11 of 81
    adonissmuadonissmu Posts: 1,772member
    Quote:

    Originally Posted by EricTheHalfBee View Post

     

     

    Slam dunk troll with another stupid comment. You want to complain, talk to the record labels or movie studios who are the ones deciding whether your content can be moved freely from device to device.


    That's true. He needs to read the terms and agreements as it relates to using iTunes. Apple is under no obligation to support other devices with tracks purchased from iTunes. It did have an obligation to the record companies.

  • Reply 12 of 81
    rob53rob53 Posts: 1,933member

    I'm getting tired of all the monopolistic products Apple is involved in yet nothing has ever been done about Amazon. At least the EU is going after Google and its search monopoly. Where is the class action lawsuit against these two companies? Can't find a judge who would handle it? That says a lot about our corrupt judicial system.

  • Reply 13 of 81
    rogifanrogifan Posts: 10,669member
    pazuzu wrote: »
    It's in the NY times today too. Its all over the place.

    Yes, click bait is all over the place. Welcome to the Internet in the 21st century.
  • Reply 14 of 81
    nasseraenasserae Posts: 3,152member
    pazuzu wrote: »
    Absolutely.
    There's no reason why I shouldn't be able to play my iTunes music or movies on any device I want I.e. Kindle Fire, Smart TV, etc because it's my music not Apple's.
    Slam dunk case. I've been wanting this to go to trial for years.

    The copyright law says it is NOT your music.
  • Reply 15 of 81
    pazuzu wrote: »
    Absolutely.
    There's no reason why I shouldn't be able to play my iTunes music or movies on any device I want I.e. Kindle Fire, Smart TV, etc because it's my music not Apple's.
    Slam dunk case. I've been wanting this to go to trial for years.

    You mistakenly think you own something. If you wanted to be able to move "your" music you should purchase a license that provides that ability.
  • Reply 16 of 81
    rogifanrogifan Posts: 10,669member
    If plaintiffs are successful in the suit what's to stop someone from suing Apple for not allowing multiple app stores on iOS devices or not allowing people to load whatever they want on iOS devices (without jailbreaking)?
  • Reply 17 of 81
    Quote:

    Originally Posted by EricTheHalfBee View Post

     

     

    Slam dunk troll with another stupid comment. You want to complain, talk to the record labels or movie studios who are the ones deciding whether your content can be moved freely from device to device.




    When you put it that way this reminds me of the relationship Apple had with book publishers. Sadly that didn't turn out right IMO.

     

    Let us hope this is different!

     

    I never expected to play the DRM content on anything else besides an iPod or iTunes. Was there an expectation created by Apple that one could do that? I would HOPE that matters.

  • Reply 18 of 81
    rogifanrogifan Posts: 10,669member
    nasserae wrote: »
    The copyright law says it is NOT your music.

    And did Apple ever claim any type of music file could be played on iPod or that music purchased on iTunes store could be played on any mp3 player? It's not like anyone was forced to buy an iPod or use iTunes. There were/are other options on the market.
  • Reply 19 of 81
    Don't worry, everyone. It's "take a dump on Apple week"...the stock market says so.

    All part of the routine. Honestly, if this Apple-trashing goes any further, it'll be a great time to go all in and put the rest of my idle cash to work.
  • Reply 20 of 81
    Quote:

    There's no reason why I shouldn't be able to play my iTunes music or movies on any device I want I.e. Kindle Fire, Smart TV, etc because it's my music not Apple's.

    Slam dunk case. I've been wanting this to go to trial for years.


     

    That wasn't Apple's decision originally. Labels specifically forced Apple to use DRMs in order to protect their content as they thought at that time that not doing so would kill them. It was wrong but this is what they wanted and Apple couldn't really change that. After all, that was their content sold on iTunes Store.

     

    That being said, Apple could get at that time reasonable conditions (the best available anywhere at that moment) since iTunes users could use their music with more freedom as they could burn it to CDs, transfer it to a given number of Macs/PCs and transfer without limitation to iPods.  

     

    Now it would be nice that people don't forget history here and stop to just blame Apple. That's the reason why this lawsuit is ridiculous. Again Apple wasn't the owner of the content of the music sold on iTunes but labels were. They had the power to dictate a lot of conditions without which no deal was possible and the iTunes wouldn't have existed at all. I would say that anyone would have a hard time to argue that iTunes Store wasn't a good thing for the music industry and the users as it democratized legal paid electronic musics, something the entire industry (including the labels) struggled to even consider to do. Yes there were those DRMs, but hey, nothing is perfect and not everyone can be satisfied.

     

    But accusing Apple for being a monopoly with the DRM system is just totally silly. Makes no sense at all.

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