Mikey Campbell
A U.S. district court judge recently denied Apple's motion for summary judgment in a long-running case involving the use of digital rights management for content sold through the iTunes Store, opening the suit to move to the trial phase.
The ruling handed down by U.S. District Court Judge Yvonne Gonzales Rogers last week is the latest development in a case dating back to 2004, which accuses Apple of creating a monopoly through iTunes Music Store DRM, reports ArsTechnica.
Plaintiffs are seeking $350 million in damages, part of which will go to a class comprised of customers who purchased iPod classic, iPod shuffle, iPod touch and iPod nano models between Sept. 12, 2006 and March 31, 2009.
According to plaintiffs, Apple allegedly stifled competition in the digital music space by implementing FairPlay DRM protocols that supposedly "locked" iPod users in to the iTunes ecosystem. By making songs purchased through competing services unplayable on iPods at the time, Apple is said to have dissuaded users from switching over to other platforms, specifically those built by RealNetworks.
The case revolves around RealNetworks' "Harmony" technology, a workaround for FairPlay DRM that allowed customers to buy songs through the Real's music store and play them back on iPod. Apple responded by releasing a software update that, among other enhancements, disabled Harmony content.
Following the change, RealNetworks tweaked Harmony to again make songs purchased outside of iTunes compatible with iPod, but Apple again broke the workaround in a 2006 iTunes 7.0 software update. Plaintiffs are basing their case on this second instance of disabling Harmony, saying version 7.0 pushed users to rely on iTunes as their only online music store, resulting in so-called "switching costs." This allegedly incurred discouraged users from switching to iPod competitors when upgrading hardware, as they would have to repurchase the same music, convert tracks to a non-DRM format using iTunes 7.0's built-in CD burning technique, or let go of the protected music altogether.
According to plaintiffs' expert witness testimony from Stanford University economics professor Roger Noll, Apple's tactic "raised the cost of switching from iPods to competing portable digital media players by eliminating the ability of consumers to collect a library of downloads that could be played on all players."
Apple attempted to exclude Noll's testimony, but Judge Gonzales Rogers rejected the motion in her ruling, saying "Noll's opinions alone supplies a triable issue of fact regarding the fact and amount of antitrust damages, as well as the definition of the relevant market."
For its part, Apple argues RealNetworks' less than three percent share of the 2006 digital music market was "insignificant" and "makes it 'implausible' that Harmony could have the effect ascribed to it by plaintiffs." Further, RealNetworks itself admitted to investors in 2005 that Harmony put the company at risk of legal action from Apple.
A trial has been set for Nov. 17, though Apple has the option to settle before that date arrives.
Amber Neely
Andrew Orr
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
73 Comments
So, I'm trying to remember... was DRM the music labels' demand, or Apple's demand? Hmmm... oh, right! Apple opposed DRM and the music labels demanded it! Until they finally gave in (first to Amazon, to snub Apple, and then they let Apple escape the DRM too). I'm glad Apple won and we have DRM-free music now. Tracks from iTunes will play on anything that handles an MP4.
What's dumb about this is that DRM is/was required by the music industry and if Apple circumvented that, allowing users to play tracks anywhere, they could not link the track to the purchaser. That would have allowed tracks to be distributed and would have created an issue with copyright. So while it may suck for these users who got "locked in", the alternative would be piracy and the continued ripping of CDs.
[quote name="nagromme" url="/t/182664/apple-faces-trial-for-allegedly-locking-in-ipod-owners-with-itunes-music-store-drm#post_2612636"]So, I'm trying to remember... was DRM the music labels' demand, or Apple's demand? Hmmm... oh, right! Apple opposed DRM and the music labels demanded it! Until they finally gave in (first to Amazon, to snub Apple, and then they let Apple escape the DRM too). I'm glad Apple won and we have DRM-free music now. Tracks from iTunes will play on anything that handles an MP4.[/quote] Even if Apple thought DRM was a good idea (which all evidence points no), to me the most ridiculous argument in all this is that you could use an iPod and iTunes without ever buying a single song from iTunes Music Store or even ever creating an iTunes Music Store account. iTunes had CD ripping capabilities, as well the ability to import MP3, AAC, and ALAC formats.
When can we expect the eBook antitrust suit against Amazon for making
non-transferable eBooks?
Hard to see how this suit could have merit, since you can move music in and out of iTunes...
Haven't I always been able to rip cd's into iTunes, and burn cd's from iTunes purchases?
Get Real.