Apple Facing Frivolous Monopoly Class-Action Suit
A class-action suit filed in U.S. District Court for the Northern District of California alleges Apple unfairly uses technological restrictions with its iPod line and iTunes Music Store to monopolize the online music industry.
The suit was filed Dec. 31 by Stacie Somers, a resident of San Diego County, California, who bought a 30GB iPod from Target, a retail store. Others who bought an iPod or content from Apple’s iTunes store after Dec. 31, 2003, may join the suit. The suit calls for Apple to forfeit money it earned from the unfair practices and pay the plaintiffs damages.
It alleges that Apple has constricted the market by not enabling iPods to play content in the Windows Media Audio (WMA) format, Microsoft’s copy-protection technology. Further, Apple sells songs on the iTunes store with its own copy-protection technology, FairPlay, which is incompatible with music players other than the iPod.
The suit contends iPod-owning consumers can only buy music from iTunes, an unlawful tie-in that violates U.S. antitrust laws. Apple could license the WMA format for as little as $0.03 per iPod, or for a total of $800,000 based on Apple’s 2005 iPod sales, the suit claims. The suit is not the first to accuse Apple of unfair business practices. Apple is facing similar legal battles in the U.S. and Europe.
The Future: This suit will get tossed. Steve Jobs and Apple have openly promoted non-DRM downloads since late 2006. The suit is already two sandwiches short of a picnic with Apple, Amazon, and others now offering MP3 downloads that are music free of copy-protection restrictions.