Apple Wins iPod Antitrust Lawsuit, Found Not Guilty of Harming Consumers

Jury deliberations for the iPod antitrust lawsuit Apple faced in court last week began on Monday, and it appears the jury has already reached a verdict just a day later. As reported by The Verge, the jury has sided with Apple, finding the company not guilty of harming consumers with anticompetitive practices.

In the class action lawsuit, the plaintiffs argued that Apple had deliberately crippled third-party music services by locking iPods and iTunes to its own ecosystem, which in turn artificially raised the price of Apple's products. At issue was a specific iTunes 7.0 update that disabled the DRM workarounds put in place by RealNetworks, a competing music service, allowing its music to be played on the iPod.

ipod-original
Apple argued that the iTunes update in question was done mainly to improve the iTunes service rather shut down third-party music services, a point that the jury agreed with.

Delivering a unanimous verdict today, the group said Apple's iTunes 7.0, released in the fall of 2006, was a "genuine product improvement," meaning that new features (though importantly increased security) were good for consumers. Plaintiffs in the case unsuccessfully argued that those features not only thwarted competition, but also made Apple's products less useful since customers could not as easily use purchased music or jukebox software from other companies with the iPod.

During the trial, Apple also explained that its DRM efforts and the blocking of competing music services was done at the behest of record companies. According to Apple, its iTunes updates were designed to preserve deals and protect consumers from hackers and malicious content.

Apple executives like iTunes chief Eddy Cue and head of marketing Phil Schiller testified during the trial, and former Apple CEO Steve Jobs also had a large role, in the form of emails and a 2011 videotaped deposition that was shown in court.

The plaintiffs in the trial were asking for damages of $350 million, which could have gone up to $1 billion under antitrust law. Apple's victory means the company will not have to pay out any money at all.

Popular Stories

Apple WWDC24 Apple Intelligence hero 240610

Apple Explains iPhone 15 Pro Requirement for Apple Intelligence

Wednesday June 19, 2024 4:48 am PDT by
With iOS 18, iPadOS 18, and macOS Sequoia, Apple is introducing a new personalized AI experience called Apple Intelligence that uses on-device, generative large-language models to enhance the user experience across iPhone, iPad, and Mac. These new AI features require Apple's latest iPhone 15 Pro and iPhone 15 Pro Max models to work, while only Macs and iPads with M1 or later chips will...
Apple Intelligence General Feature

Apple Intelligence Features Not Coming to European Union at Launch Due to DMA

Friday June 21, 2024 9:44 am PDT by
Apple today said that European customers will not get access to the Apple Intelligence, iPhone Mirroring, and SharePlay Screen Sharing features that are coming to the iPhone, iPad, and Mac this September due to regulatory issues related to the Digital Markets Act. In a statement to Financial Times, Apple said that there will be a delay as it works to figure out how to make the new...
iPhone 16 Pro Max Generic Feature 2

5 Biggest Changes Rumored for iPhone 16 Pro Max

Wednesday June 19, 2024 5:00 am PDT by
Given Apple's rumored plan to add an all-new high-end tier to its iPhone 17 series in 2025, this could be the year for Apple to bring its boldest "Pro Max" model to the table — the kind of iPhone 16 upgrade that stands tall above its siblings, both figuratively and literally. If you have been holding out for the iPhone 16 Pro Max, here are five of the biggest changes rumored to be coming...
Apple Vision Pro 2 Feature 2

Apple Reportedly Suspends Work on Vision Pro 2

Tuesday June 18, 2024 8:17 am PDT by
Apple has suspended work on the second-generation Vision Pro headset to singularly focus on a cheaper model, The Information reports. Apple was widely believed to have plans to divide its Vision product line into two models, with one "Pro" model and one lower-cost standard model. The company is said to have been deprioritizing the next Vision Pro headset over the past year, gradually...
back to school 2024

Apple's 2024 Back to School Sale Launches, Up to $150 Gift Card With Mac or iPad

Thursday June 20, 2024 4:29 am PDT by
Apple has launched its annual Back to School promotion for college students in the United States. This year's promotion offers a free Apple gift card with the purchase of an eligible Mac or iPad. Apple is also offering students 20% off AppleCare+ plans. Apple is offering a $150 gift card with any new MacBook Air, MacBook Pro, or iMac, and a $100 gift card with the purchase of any new M4 iPad ...
iOS 17

Apple Releases First Public Beta of iOS 17.6

Thursday June 20, 2024 10:18 am PDT by
Apple today seeded the first betas of upcoming iOS 17.6 and iPadOS 17.6 updates to public beta testers, with the betas coming a few days after the initial iOS and iPadOS 17.6 developer betas. Public beta testers can get the beta by opening up the Settings app, going to the Software Update section, tapping on the "Beta Updates" option, and toggling on the iOS 17 or iPadOS 17 Public Beta....

Top Rated Comments

KPOM Avatar
124 months ago
Great news. Sanity prevails. Now we just need some sanity from the appeals court in the e-books case.
Score: 43 Votes (Like | Disagree)
joelypolly Avatar
124 months ago
Here is to hoping that Apple can get their lawyer fees back. That should provide some disincentive to sue in future
Score: 37 Votes (Like | Disagree)
Patriot24 Avatar
124 months ago
Imagine the precedence that would have been set had the plaintiffs won this case. Every tech company for the rest of time would be open to litigation for just about any security enhancement that also limited interoperability with third party systems and equipment.

Sanity prevails, indeed.
Score: 24 Votes (Like | Disagree)
infantrytrophy Avatar
124 months ago
The current class action lawsuit is prominent in the news because it’s sensational, featuring a videotaped deposition by Steve Jobs, who has been dead for 3 years or so. Here's the real story >>

The plaintiffs allege anti-competitive behavior by Apple. In the 2006 - 2008 period, Apple’s software prevented copying iTunes music content from the iPod to a 2nd computer, if the iPod had been already been connected (and backed up) to another computer via iTunes. If a user attempted to connect to a 2nd computer, a message appeared stating, “ … this device (iPod) was already associated with a computer … to connect with another computer, you must erase all content - click OK to continue …”. And the content was then erased. Oops!

Did this represent Apple’s attempt to prevent competing music on its devices, or other anticompetitive behavior? No - what really happened was that Apple had been told by the music industry (RIAA) to cease/desist rampant music piracy (copying to multiple devices). The RIAA was paranoid and considered the iPod to be the ultimate piracy device, with a huge 160 GB disk drive, allowing users to copy music to all their friends in an unlimited way. RIAA demanded that Apple remedy this by installing a method to prevent copying to more than one device.

Which Apple did - it had no choice. Given the nature of Apple’s business development and the nature of distributing massive software updates, the correction (software update to iPods and the iTunes software to satisfy the RIAA) was a bit clumsy. iTunes was modified so that the iPod could copy songs to only one computer, as demanded by the RIAA, and not to a 2nd computer. In certain situations (a customer bought a 2nd computer due to computer crash, or whatever), this resulted in inconvenience, or maybe the customer “lost” his music because it was erased when the iPod connected to a 2nd computer and had not been backed up properly. Predictably, some sued, and the lawsuit is still playing out. And this is all due to legal issues and the RIAA, not Apple’s anticompetitive behavior.

My take is that it represents predictable growing pains at the intersection of two huge industries - music and mobile/computer technology - in a period of rapid and disruptive change, complicated by the legal system. For sure, Apple wanted to change the way music was distributed and wrestle away the viselike grip that the big music distributors had on the music content providers and artists. This was embraced by customers - note that CD sales are way down, now that most people now buy music by software download or by paid streaming services instead of by CD purchases. Or cassette tapes or vinyl records, for that matter. To continue this rapid change theme, Apple’s iTunes music sales subsequently peaked and then declined as competitors entered the picture with another disruptive technology - streaming music: Beats Music, Google Play, iTunes, Pandora, Rdio, Spotify. Far from monopolizing all music sales, Apple’s actions to popularize online digital music distribution ultimately opened music distribution to many competitors, and Apple is playing catch-up with its purchase of Beats Music. In fact, Spotify is winning, not Apple, at the moment. Customers are getting all the music they want (and only what they want!) at lower prices. The old music distributors are fading away since they offer no value. And it’s harder for artists to command exorbitant fees, since it’s easier for newer (and lesser-paid) artists to enter the digital distribution scheme (at least in some cases, not all).

If you think about it, this lawsuit is a moot issue. Old news, now passed by by even newer technology and new competition. But the lawyers still want their millions, while allegedly “affected” customers each get 50 cents or so.

It's gratifying to see the jury side with Apple, not the class action lawyers, on this one.

Here is a link to more info if you are interested. It’s a video podcast by Leo Laporte. This issue starts at 2:50, goes for 4 minutes or so.
http://techguylabs.com/episodes/1141
Score: 15 Votes (Like | Disagree)
Stephroll Avatar
124 months ago
What a waste of time

Score: 14 Votes (Like | Disagree)
Praesto Avatar
124 months ago
I wonder if the lawyers will try to "settle" to get paid, i.e., promise not to appeal if apple kicks some $$ their way.

I know this is the cost of doing business, but in my opinion the lawyers should have to pay Apple for a frivolous lawsuit. Think of all the effort Apple had to put into their defense. If the plaintiff's won, Apple would have been forced to pay lawyer fee's. It should go both ways.
Score: 10 Votes (Like | Disagree)