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Lawsuit demands end to iPod/iTunes monopoly; CD sales plummet

A class action lawsuit filed against Apple Inc. accuses the company of knowingly controlling the handheld market with its FairPlay music standard, forcing rivals out of business and allowing it to overcharge customers for iPods — news that comes just as CD sales are reported to have dropped sharply in 2007.

Class action charges Apple with digital music monopoly

A 24-page class action complaint submitted this week in a Northern District of California court alleges that Apple is unfairly tying the iTunes Store and the iPod together by selling much of its music in the FairPlay AAC format. Customers who own the iPod must buy from iTunes if they want music in a protected format; in just the same measure, iTunes customers must buy an iPod if they want to listen to music on a portable player.

As Apple effectively controls the digital music sales industry, this is a major disincentive to buying a competing player, say chief plaintiff Stacie Somers and her representing lawyer Helen Zeldes. The two point to statements by government officials in France and Norway where Apple was accused of leaving customers without rights.

Moreover, the iPod maker is not only neglecting support for rival standards but is deliberately stripping it out and creating "crippleware," according to the lawsuit. Although the chipset in the iPod shuffle natively recognize Windows Media Audio, no such support exists in the shipping firmware of it or any other iPod.

Apple is also targeted in the complaint for using its secure position atop the market to allegedly overcharge customers for iPods. Although the prices for immediate orders of 1GB and 4GB of memory were only separated by $5.52 at the time Apple produced the first-generation iPod nano, Apple saw fit to charge $100 more for the higher-capacity model, the plaintiff says.

As these combined practices potentially violate the Cartwright and Sherman Antitrust Acts in addition to California competition laws, Somers' suit asks for a permanent injunction against the reported behavior in addition to damages.

CD sales drop nearly 10 percent in 2007 as online sales rise

Sales of albums in the US have dropped a full 9.5 percent in the US between 2006 and 2007, according to new results from Nielsen SoundScan.

Much of this is attributable to a shift away from CDs due to both legal and pirated music downloads, though the research firm cautions that the music business would have fared worse without the help of online music stores, dropping by a steeper 15 percent.

Digital sales ultimately represented the recording industry's shining beacon, according to the report. Sales at all online stores grew by 45 percent to roughly 844.2 million individual songs and were responsible for 10 percent of all music sold. Actual content sold climbed by about 14 percent to 1.35 billion, hinting that customers were buying more items overall but also spending an increasing amount on individual songs and music videos.

"That says consumers are embracing both the track format and the digital album format," says Nielsen Music president Rob Sisco.

Intuit resolves troublesome QuickBooks data loss glitch

After contending with the issue since mid-December, Intuit on Friday has released a QuickBooks patch that it says should fix a potentially very dangerous bug in the 2006 and 2007 Mac versions of the company's finance management software.

Owners of the program found that installing an automatic update last month erased the contents of their Mac's Desktop folder, triggering a class action lawsuit as well as complaints from many users.

The download primarily disables the automatic update feature and suggests that users will instead have to manually apply future patches to QuickBooks to address any flaws discovered in the future.



79 Comments

makeitso 16 Years · 1 comment

...which I prefer over an iPod as it:

1) Has a built in 3Megapixel camera
2) A very good stereo FM radio
3) A versatile address book that syncs with my Mac address book
4) A calendar that syncs with iCal
5) A 3G video camera and modem
6) A great intuitive interface that is faster to navigate than an iPod
7) With my new Sony Ericsson stereo bluetooth headphones and $20 2Gig memory card, I have a great sounding music player that pauses when a phone call comes in.

HOWEVER!

I cannot play any of the music I purchased from the iTunes music store on it!

This is like me buying a book and only being able to read it in a specific location.

Come on Apple, un DRM ALL your music today, or I'm going to compete...

trevorlsciact 18 Years · 215 comments

alright, that's it! apple is working to eliminate DRM! it is the fault of the record companies, not apple. if this were a year ago I would agree with the lawsuit 100%--but apple is moving away from it, and that means this lawsuit is not in good spirit, and it mean there are just people after money behind it. It is unfortunate, and I hate to see that.

pjg 17 Years · 10 comments

Hard to believe a class action suit regarding music sold on iTunes would succeed, given how many options there are for playing other downloaded music on the iPod, and also for converting AAC in mp3 with ITunes.

On the other hand, Apple does indeed have a rigid hardware lock-in with the video's they sell. I purchased episodes of Battlestar Galactica and I can't believe how much more restricted the DRM is for video than it is for audio. It's hard to believe I can't make a DVD of the video's I purchase in the same way I can make a CD of the audio I purchase.

ajhill 17 Years · 81 comments

Basically the are suing Apple because they are too successful.

Next thing you know they will be suing the Japanese for selling better cars than the American makers.

Oh, and why haven't they sued Microsoft a long time ago for their monopoly on the OS market and the years of terrible software.

Grow up people. If you don't like Apple's products, buy the competitions. Oh, what's that, you don't like the design of the competitions? They are too hard to use. You don't like actually having to pay the artists?

This is just a thinly disguised attempt of the Music industry to try and sue back the market share that they lost to Apple. They can't compete in the open market so they resort to suing. What is this country coming to?

Al

buddha 17 Years · 370 comments

Quote:
Originally Posted by pjg

and also for converting AAC in mp3 with ITunes.

No.

Just another terrorize Apple case.