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