Apple has begun a billion dollar antitrust lawsuit, in which it stands accused of unfairly dominating the digital music market.
Prosecutors – representing an estimated eight million consumers and a range of businesses – claim that between 2006 to 2009, coding in Apple’s online music store iTunes unfairly blocked rival devices from streaming music. They are seeking $350m in damages, which would be tripled under federal anti-trust laws.
Prosecutors argue that Apple’s strategy forced buyers to use iPods instead of other devices
The iTunes store, which was launched in 2003, contained music encoded with digital rights management (DRM) software – called FairPlay – that prevents unauthorised copying. It meant that competing devices such as Diamond Multimedia’s Rio and Microsoft’s Zune could not play songs purchased from iTunes, and music purchased on rival online stores could not be played on iPods. The code was removed in 2009.
Prosecutors argue that Apple’s strategy forced buyers to use iPods instead of other devices, skewing the market and artificially inflating the price of iPods.
An eight-person jury was shown video evidence from Steve Jobs, filmed six months before he died, as well as emails between the late CEO and fellow executives, discussing the emergence of rival companies. In one email, Jobs wrote “we need to make sure that when Music Match launches… they cannot use iPod.” Jobs previously likened one competitor, RealNetworks, to hackers.
Defending Apple, attorney Bonny Sweeney said “There was a concern by Apple that this would eat into their market share”.
This is not the first case Apple has faced in 2014. In July, a New York federal judge found the tech giant liable over allegations it colluded with publishers to inflate the price of e-books – a ruling currently being appealed. In April Apple also settled claims it colluded to keep salaries down by agreeing with other companies not to poach their workers.