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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.
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.