Apple Accused of Restricting Consumer Choice; Jobs Forced to Testify
March 23, 2011 11:02 AM
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RealNetworks raises serious questions about Apple's tactics with iTunes
An order issued earlier this week by a federal magistrate judge will require
CEO Steve Jobs to answer questions regarding an
iTunes antitrust suit
, Apple's proprietary digital media player application, was launched in 2003. It became wildly successful, even beating Wal-Mart as the biggest music retailer in April 2008.
But according to
, a Seattle-based provider of Internet media software and services, iTunes allegedly utilized unfair practices in the digital media industry between October 2004 and March 2009. In july 2004, RealNetworks announced that its online store offered music that could be used on iPods through a technology called Harmony. Five days later, Apple
to its iPod FairPlay software, which is a proprietary software used by Apple to encode its digital music files. The iPod FairPlay software allowed iTunes music files to be used only on iPods, and blocked digital music sold by other companies to be played on the iPod. This included RealNetworks' digital files.
In 2005, Thomas Slattery, an iTunes customer, filed a lawsuit on behalf of customers who believe Apple "illegally limited consumer choice" by making iTunes exclusively for iPod and vice versa. He asserted antitrust claims from Apple's use of the FairPlay software.
In 2008, Apple faced the same issues with consumers in Europe who complained about the lack of compatibility with iTunes and the iPod. The European Union Competition Commission started an inquiry in 2005, where regulators from Norway, Denmark and Sweden examined the situation. As a result, Apple lowered the prices of iTunes tracks in the United Kingdom.
In March 2009, iTunes began selling digital music without the proprietary software, and in May 2010, the U.S. Justice Department's antitrust division began looking into Apple's business
practices associated with iTunes
and the iPod.
Now, U.S. Magistrate Judge Howard R. Lloyd in San Jose, California has issued an order that allows lawyers for consumers to question Jobs. The deposition can only consist of questions regarding Apple's software changes made in October 2004, which prevented digital tracks from RealNetworks from being played on the iPod. In addition, the deposition can only be two hours long.
"The court finds that Jobs has unique, non-repetitive, firsthand knowledge about the issues at the center of the dispute over RealNetworks software," said Lloyd.
Lloyd also declined requests from the plaintiff
to question Jobs
regarding Apple's refusal to license FairPlay to other companies as well as the companies use of the software on digital tracks from iTunes and the iPod. Both claims were dismissed from the litigation in December 2009.
"Plaintiffs remaining claims rely on the allegation that Apple attempted to maintain a monopoly in the audio download and portable music player market by issuing updates to FairPlay, Apple's proprietary digital rights management software," said David Kiernan, Apple's attorney.
Also, Kiernan noted that "any deposition of Mr. Jobs would be repetitive, at best."
A deposition has not been scheduled yet, according to San Diego lawyer Bonny E. Sweeney, who is representing the plaintiffs, but a hearing regarding Apple's motion to dismiss the case is scheduled for April 18.
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RE: consumer failure
3/24/2011 6:04:48 PM
What is it with everybody that doesn't get why working with a library through iTunes is infinitely simpler while giving you more control than the archaic, backward and unintuitive method of drag and drop that is not even relevant to storing media.
Drag and drop may work for albums that you have painstakingly taken months to catalogue and rename, but what happens when you don't want a whole album? What happens when you want a playlist of the 100 of your most listened to rock songs of the 90's that you have rated 3 stars or above?
Just an example but how would you do that with drag and drop exactly? Not only getting that onto the player in the first place but actually ensuring that it plays correctly when it's on there?
I accept that the Windows version of iTunes is not great. It does have a few weird caveats that make more sense in Mac OS X and the performance sucks but to build a library in in the OS X version with almost no restrictions as to what you can do with that library (assuming you imported it all yourself, I don't buy media via iTunes) then I think it's way better than anything else I have tried, if you take a moment to think about what you want from it before you build your library.
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