Former iTunes engineer says Apple wanted to block '100% of non-iTunes clients'

Posted:
in General Discussion edited December 2014
A former Apple engineer appeared in court on Friday as the final witness of an antitrust case involving the iPod and iTunes ecosystem, saying he worked on an internal project meant to box out competing digital stores and media players.

Lawsuit


According to in-court reports from The Wall Street Journal, plaintiffs' lawyers in the iPod iTunes class-action suit called former Apple engineer Rod Schultz to testify on internal initiatives allegedly created to stifle competition in the digital music space.

Schultz worked on FairPlay digital rights management from 2006 to 2007, including a project "intended to block 100% of non-iTunes clients" and "keep out third-party players" in competition with Apple's iPod lineup. Mention was made of a program code-named "Candy," but its standing in relation to Apple's alleged anti-competitive scheme is unclear. The iTunes engineer left Apple in 2008.

It can be assumed that Schultz's remarks were at least partially in reference to iTunes updates that disabled RealNetworks' Harmony workaround for Apple's FairPlay DRM, which restricted playback of music purchased from the iTunes Music Store to iPods. RealNetworks introduced Harmony as a way for iPod owners to listen to songs purchased through the RealPlayer store.

Following a tweak in Harmony's software that again sidestepped FairPlay DRM, Apple released iTunes 7.0 in 2006 that along with visual and functional enhancements, broke RealNetworks' workaround.

Lawyers for the plaintiffs also tried to enter into evidence a paper Schultz wrote in 2012 titled "The Many Facades of DRM" (PDF link). In it, Schultz gives detail not only on basic DRM implementation, but its specific use by Apple as way to lock in customers with iTunes, iPod and FairPlay:
Apple's DRM created this lock, and it became so successful that the music industry went with the lesser of two evils (songs locked to Apple's iPod monopoly vs. the distribution of DRM\free music) and chose to distribute DRM\free music.
Presiding Judge Yvonne Gonzalez Rogers denied plaintiffs' motion to admit.

For its part, Apple said past iTunes updates carried security, operational and visual improvements over prior versions, and were not limited to breaking compatibility with third-party services. Schultz's project, and others like it, were designed to protect the iPod-iTunes ecosystem from poor user experiences resulting from numerous file formats and unsecured media devices. Schultz reportedly agreed to this assessment during testimony.

Apple is being sued for $350 million for allegedly using FairPlay, iPod and the iTunes Music Store to create a monopoly, in turn allowing the company to falsely inflate iPod pricing. Under U.S. antitrust laws, damages could be tripled to over $1 billion if Apple is found culpable of wrongdoing.

The suit has seen its share of troubles, however, as the class lost both original representing plaintiffs, one of whom withdrew last week after it was discovered that her iPod purchases did not fall within the eligible time span set between Sept. 12, 2006 to March 31, 2009. A second named plaintiff was eliminated on Monday due to similar uncertainties regarding her iPod purchase claims.

With Schultz's testimony complete, Judge Gonzalez Rogers plans to hand over the case for jury deliberations next week.
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Comments

  • Reply 1 of 49

    That would have sucked if Apple has blocked out all music services. 

     

    Being closed can easily hurt a company as people turn to other devices.

     

    As it stands, I don't use any Apple services (that I can think of) because other services are much better.

     

    Apple email used to blow (maybe it still does), so stopped using that. No cloud storage, so went elsewhere. Music: there are much better options out there as well. And so on.

  • Reply 2 of 49
    Can't wait to see how the Apple Zealots in this forum are gonna put a positive spin on this one. Hey Apple tried to create and maintain a closed system, and the market didn't accept it. If the jury says Apple needs to pay up, than so be it.
  • Reply 3 of 49
    Why is this all on Apple? RealNetworks, Microsoft, Sony and all had their own much more restrictive DRM that blocked AAC music. You don't have Apple suing to make sure AAC format music could play on a Zune.

    If you had music from Microsoft or Real and you wanted music on your new iPod, you burned a CD and ripped it back to iTunes as an MP3. Problem solved.

    This lawsuit amounts to Sony suing everyone because Betamax wasn't compatible with VHS. Or tires tires coming in different sizes and not being compatible with EVERY car. It's just stupid.
  • Reply 4 of 49



    hey ... you got a prize for the first comment.... ....endless ridicule

     

    K

  • Reply 5 of 49
    pfisher wrote: »
    As it stands, I don't use any Apple services (that I can think of) because other services are much better.

    You don't have an iCloud account?
  • Reply 6 of 49
    cornchipcornchip Posts: 1,314member
    How is this $350,000,000 worth of damage? I don't get it. Doesn't make sense. Is everyone who owned an iPod from these years going to get $4 or something? What am I missing? :\
  • Reply 7 of 49
    Snitches get stitches.
  • Reply 8 of 49
    cynder wrote: »
    You don't have Apple suing to make sure AAC format music could play on a Zune..

    I don't get the point you're trying to make. Zune supported AAC and Apple doesn't own AAC. It's licensed, like MP3, except that AAC was better and cheaper.
  • Reply 9 of 49
    macvicta wrote: »
    Snitches get stitches.

    This isn't prison. We're talking about an engineer here, so it's: Snitches get glitches.
  • Reply 10 of 49



    It's a sloppy comment on my part.  I guess I was trying to say Apple didn't try to force Microsoft, Creative, SanDisk or Sony to use their specific DRM.  

  • Reply 11 of 49
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by AppleInsider View Post

     
    ... songs locked to Apple's iPod monopoly vs. the distribution of DRM\free music ...

     

    Better idea: go after Honda for having a Civic monopoly.

    Guaranteed to win that case.

    /s

  • Reply 12 of 49
    Does anyone else find this opinion laughable?

    [QUOTE]Apple's DRM created this lock, and it became so successful that the music industry went with the lesser of two evils (songs locked to Apple's iPod monopoly vs. the distribution of DRM\free music) and chose to distribute DRM\free music.[/QUOTE]

    So the music industry hated/feared Apple's DRM locking people into Apple products so much that they dropped DRM? Because the alternative being that a customer buys "99 lift ballons" from iTunes, then decides to get a Zune, but because that person bought that Neña song in iTunes and can't figure out how to burn it to a CD and rip it into Zune/Windows Media Player, and would be {GASP!} forced to buy it from the Zune store? And the record companies didn't want that?
  • Reply 13 of 49
    Either this guy is bonkers or something is being misinterpreted somewhere
  • Reply 14 of 49
    nasseraenasserae Posts: 3,157member
    starbird73 wrote: »
    Does anyone else find this opinion laughable?
    So the music industry hated/feared Apple's DRM locking people into Apple products so much that they dropped DRM? Because the alternative being that a customer buys "99 lift ballons" from iTunes, then decides to get a Zune, but because that person bought that Neña song in iTunes and can't figure out how to burn it to a CD and rip it into Zune/Windows Media Player, and would be {GASP!} forced to buy it from the Zune store? And the record companies didn't want that?

    They (music studios) didn't want Apple to have monopoly over digital music distribution. I still remember when they first went to Amazon and allowed Amazon to sell DRM free music (from most studios). Then few days later Apple started selling DRM free music. It is the same situation with Ebooks except Apple didn't go crying to the DOJ like Amazon did. In both cases the actions caused increase in price to consumers.
  • Reply 15 of 49
    lilgto64lilgto64 Posts: 1,147member

    So I guess its a done deal then - because a former employee's sworn testimony as to what his opinion of the purpose of a project he allegedly worked on 10+ years ago cannot be doubted. 

  • Reply 16 of 49
    ecatsecats Posts: 272member
    On one hand we have this witness painting Apple as a company trying to lock out competitors at all costs. (Despite this version of events being personally beneficial to this witness.)

    On the other hand we have Apple who with iTunes widely promoted the "Rip. Mix. Burn." campaign, and allowed many non-DRM audio formats on the iPod including AAC, MP3, Audible, AIFF and WAV. Noting here that WAV is even a competitors audio format. Then it offered just a single DRM audio format for use with a music store that introduced 99c tracks to the world, when the music industry was still scared of digital media.

    I don't really buy the idea that Apple were making all of these changes specifically to lock out competing music stores. Indeed any music store online or in the real world needed only offer one of the above DRM-free formats to be compatible with the format. Again as noted above, they could have even offered these in the WAV format.

    What I do believe is that Apple had to offer DRM to the music industry to get them over the line with 99c tracks. I do believe that this contract would also stipulate that the DRM format would need to be protected against manipulation/hacking. The music industry's fear would be that a user could download a popular song on iTunes for 99c, remove the DRM via a hack, then immediately propagate the music via napster/kazaa/other p2p services of the day.

    I don't doubt that Real's reverse engineering of the DRM is what led Apple to introduce those changes, indeed Real went out of their way to advertise this, forcing Apple's hand in the matter.

    Anti-competitive here is ridiculous, there is so much evidence to the contrary.
  • Reply 17 of 49
    elrothelroth Posts: 1,201member

    Remember that the story we are reading is only part of the engineer's testimony. A Wall Street Journal reporter picked out a few statements, and that's it. There's no way of knowing the context, or how the entire testimony went. I wouldn't flip out over the engineer - he was subpoenaed by the plantiffs, and answered the questions. The context will be argued by the plantiffs on one hand, and Apple on the other, particularly during the closing arguments.

     

    Don't rely on one reporter picking out a few lines of one person's testimony to judge how the trial is going.

  • Reply 18 of 49
    elrothelroth Posts: 1,201member
    Quote:
    Originally Posted by cornchip View Post



    How is this $350,000,000 worth of damage? I don't get it. Doesn't make sense. Is everyone who owned an iPod from these years going to get $4 or something? What am I missing? image

    The "expert" paid witness for the plaintiffs said the iPods were overpriced by something like $16.48, and resellers were charged something like $5 too much. So his figures mean about $132,000,000 for the 8 million consumers. I don't know how much for the resellers in total, but I don't see how it could get to $350,000,000.

     

    Of course, the real damage to consumers was a big fat zero, as in $0. Nobody reported on the testimony by Apple's witnesses that there were no economic damages. I'm pretty disappointed that nobody has covered the trial in any detail - just a few snippets (other than one story about Eddie Cue's testimony, which had more details).

  • Reply 19 of 49
    Quote:
    Originally Posted by pfisher View Post

     

    That would have sucked if Apple has blocked out all music services. 

     

    Being closed can easily hurt a company as people turn to other devices.

     

    As it stands, I don't use any Apple services (that I can think of) because other services are much better.

     

    Apple email used to blow (maybe it still does), so stopped using that. No cloud storage, so went elsewhere. Music: there are much better options out there as well. And so on.


     

    Nope, Apple only blocked out music that had installed DRM, other than FairPlay. DRM free music was and never have been blocked by iTunes. At the time of DRM music, DRM free CD's were still about 90% of all the music sold. Digital downloaded of music (legal ones) didn't really take off until the record label allowed DRM free digital music to be downloaded online. Amazon was one of the first and Amazon music played on an iPod. Amazon even provided the software to load the song into iTunes. Not as seamless as buying directly from the iTunes Store but still pretty effortless. Apple didn't block it.  

     

    So you think the Xbox was hurt because it's close and can't play a PlayStation or Nintendo game disc? Microsoft actually did pretty good with the Xbox, even though it was late to the game and can only play Xbox games (plus standard CD's and DVD's), don't you think. I like to see how you think other gamers turn to a PlayStation, to play Halo. 

     

    And do tell how other people turned away from the iPod because it's a close system (locked into iTunes software, but not locked into music only bought from the iTunes Store) even though, in your opinion, there are better devices out there.  Please supply sales numbers, if you can. 

  • Reply 20 of 49
    I would like to dedicate a song to Solipsismy and this thread

    Gitchi Gitchi Ya Ya - Patti Labelle with Arianna (born a diva) Grande



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