Class-action charges Apple with illegally tying iPods to iTunes
Apple Inc. in a new class-action lawsuit is charged with illegally tying iPods to its iTunes Store in order to forge a monopoly over the digital media market so it can inflate prices, exclude competition, and force consumers to continue to buy into its closed ecosystem.
The 19-page formal complaint, originally filed in a Florida circuit court back in August, has since made its way through a Florida district court to the U.S. District Court for the Southern District of California upon Apple's request, as similar cases have been pending before a judge in that court for over two years.
The suit was brought about by Florida resident Frederick Black on behalf of all Florida residents who have purchased an iPod or downloaded media from iTunes and faced restrictions, such that they cannot transfer content purchased from iTunes to a non iPod digital music player, nor can they download digital content from other online vendors to their iPods.
Those limitations are not only frustrating, but unreasonable and illegal under Florida's antitrust and unfair trade laws, Black alleges, as consumers who may lose or break their iPod are unable to transfer songs purchased from iTunes to a different brand of player. Therefore they are forced to either purchase another iPod or forgo their right to use content already purchased from the iTunes service.
Music and video content purchased from iTunes comes wrapped in Apple's copy protection layer dubbed Fairplay, which precludes its use on non-Apple hardware products. Although Apple could license the technology to other hardware manufacturers, it chooses not to so that it can continue to limit competition and maintain its monopolistic share of the digital media market, Black alleges.
Similarly, he says, Apple could have licensed the right to use Microsoft's widely deployed Windows Media format or negotiate inter-cooperative agreements to use a copy protection system that is industry-wide, but instead chooses to limit competition and maintain its dominant market share.
Black also charges Apple with intentionally disabling built-in support for the rival Windows Media format from chips used in its earlier iPod models -- such as those from PortalPlayer and SigmaTel -- in order to control what content is available to consumers. The Cupertino-based company's "sufficient economic power" also allows it to "influence the third-party companies who provide the digital content to the online retailers," he adds.
"[Apple], by controlling such a large part of the portable digital media player market, the online music market and the online video market, maintains sufficient economic power in these markets to control consumer pricing in these markets, which has resulted in consumers paying higher prices," Black's attorneys at Tripp Scott wrote in the complaint.
Apple is specifically charged with three formal counts, which include violations of the Florida Deceptive and Unfair Trade Practice Act, attempted monopolization in violation of the Florida Antitrust Act, and monopolization in violation of the Florida Antitrust Act.
Apple is "in possesion of monopoly power in the portable digital media player market, the online music market and the online video market and has the power to control prices in these respective markets and has been able to exclude competition from these respective markets," the suit claims. "Through its tying practices, Apple has conducted itself through unfair methods of competition, anticompetitive conduct, unconscionable acts or practices, and unfair or deceptive acts or practices in conduct of trade or commerce."
The suit adds that Apple has done all this with "the purpose of eliminating competition" and that its actions are "not for legitimate business purpose."
Black is seeking damages in excess of $15,000, a court order awarding treble those damages, attorneys' fees, and any further relief the Court may deem proper. He's demanding a trial by jury.
The 19-page formal complaint, originally filed in a Florida circuit court back in August, has since made its way through a Florida district court to the U.S. District Court for the Southern District of California upon Apple's request, as similar cases have been pending before a judge in that court for over two years.
The suit was brought about by Florida resident Frederick Black on behalf of all Florida residents who have purchased an iPod or downloaded media from iTunes and faced restrictions, such that they cannot transfer content purchased from iTunes to a non iPod digital music player, nor can they download digital content from other online vendors to their iPods.
Those limitations are not only frustrating, but unreasonable and illegal under Florida's antitrust and unfair trade laws, Black alleges, as consumers who may lose or break their iPod are unable to transfer songs purchased from iTunes to a different brand of player. Therefore they are forced to either purchase another iPod or forgo their right to use content already purchased from the iTunes service.
Music and video content purchased from iTunes comes wrapped in Apple's copy protection layer dubbed Fairplay, which precludes its use on non-Apple hardware products. Although Apple could license the technology to other hardware manufacturers, it chooses not to so that it can continue to limit competition and maintain its monopolistic share of the digital media market, Black alleges.
Similarly, he says, Apple could have licensed the right to use Microsoft's widely deployed Windows Media format or negotiate inter-cooperative agreements to use a copy protection system that is industry-wide, but instead chooses to limit competition and maintain its dominant market share.
Black also charges Apple with intentionally disabling built-in support for the rival Windows Media format from chips used in its earlier iPod models -- such as those from PortalPlayer and SigmaTel -- in order to control what content is available to consumers. The Cupertino-based company's "sufficient economic power" also allows it to "influence the third-party companies who provide the digital content to the online retailers," he adds.
"[Apple], by controlling such a large part of the portable digital media player market, the online music market and the online video market, maintains sufficient economic power in these markets to control consumer pricing in these markets, which has resulted in consumers paying higher prices," Black's attorneys at Tripp Scott wrote in the complaint.
Apple is specifically charged with three formal counts, which include violations of the Florida Deceptive and Unfair Trade Practice Act, attempted monopolization in violation of the Florida Antitrust Act, and monopolization in violation of the Florida Antitrust Act.
Apple is "in possesion of monopoly power in the portable digital media player market, the online music market and the online video market and has the power to control prices in these respective markets and has been able to exclude competition from these respective markets," the suit claims. "Through its tying practices, Apple has conducted itself through unfair methods of competition, anticompetitive conduct, unconscionable acts or practices, and unfair or deceptive acts or practices in conduct of trade or commerce."
The suit adds that Apple has done all this with "the purpose of eliminating competition" and that its actions are "not for legitimate business purpose."
Black is seeking damages in excess of $15,000, a court order awarding treble those damages, attorneys' fees, and any further relief the Court may deem proper. He's demanding a trial by jury.
Comments
I've got an idea... Just don't get other mp3 players
Sue M$ for not selling songs that are compatible.
Apple has kept prices LOWER because of their position, they don't make you pay more - they let you pay less than the big guys want to charge you.
And, if all else fails... DON'T FRIGGEN BUY FROM ITUNES IF YOU DON'T LIKE IT!
You can convert the files to use on any other MP3 players and also convert songs you downloaded from other sources into iTunes no?
exactly what i was thinking.
i hate how sue-happy america is.
"I'm in an incompetent douche that doesn't know how to hold my coffee so it spilled on my lap and burnt me, I need to sue McDonalds."
"I'm a fat pile of crap that ate a lot of food at a restaurant. It made me fatter and more unhealthy; which I had no idea food could do. I need to sue that fast food chain."
"Apple is succeeding at something and I'm incompetent as to what converting songs is. I need to sue Apple."
So burn your songs to a cd and rip them into the format you choose.
Sue M$ for not selling songs that are compatible.
Apple has kept prices LOWER because of their position, they don't make you pay more - they let you pay less than the big guys want to charge you.
And, if all else fails... DON'T FRIGGEN BUY FROM ITUNES IF YOU DON'T LIKE IT!
While he's at it, why didn't he note that there were restrictions on the iPod, if you will? He activated his EULA without reading it? Or didn't know of the above suggestions for usage?
If any of the above are true, he is not competent to use an iPod.
Back on the music side of things, since Apple offers a partially DRM-free catalog, only those songs restricted by the DRM apply to his argument. Also, since they're AAC encoded, wouldn't any player capable of reading the AAC codec play it?
"I'm in an incompetent douche that doesn't know how to hold my coffee so it spilled on my lap and burnt me, I need to sue McDonalds."
That was legit.
Once again, You can buy an iPod and put music on it from other online music stores (Not ALL other ones though) and you can play music you download from iTunes on the computer you downloaded it on or other computers with iTunes software. There is NO anti-trust issue here. Not to mention that Apple offers DRM-free music as well.
That was legit.
No one cares
That was legit.
i disagree.
P.S. The McDonald's coffee lawsuit had at least as much merit as this one. But that's not saying much. Careless person + dangerously hot coffee = painful burns, but who is more to blame?
P.S. The McDonald's coffee lawsuit had at least as much merit as this one. But that's not saying much. Careless person + dangerously hot coffee = painful burns, but who is more to blame?
Obviously you're not aware of the details. Painful burns... try 3rd degree burns.
http://www.lectlaw.com/files/cur78.htm
This is no different than if I were to sue Nikon or Canon because their respective lenses ONLY work on THEIR camera bodies! WTF?!!
*Complete sarcasm. A Zune? LMAO. Yeah, right.
He needs cash !
That's a flat out lie. That's probably blatantly wrong enough to get the whole damn thing thrown out.
Obviously you're not aware of the details. Painful burns... try 3rd degree burns.
Dude. Hot coffee can not give you 3rd degree burns. 2nd degree, definitely, but hot coffee would not cause a charring of the skin, which is the definition of a 3rd degree burn.