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Apple to Defend Against iPod Antitrust Suit

Allegations say Apple used its software to stifle competition in the digital music market.


After nearly a decade of legal wrangling, Apple will appear in federal court Tuesday to defend against an antitrust suit stemming from an older generation of iPod music players.

These older iPods played songs purchased from Apple’s iTunes Store or ripped from CDs — but not tracks bought from competing online stores. Consumers who owned iPods could not easily switch to cheaper music players without losing their digital music catalogs. The class action suit brought by a group of consumers alleges Apple sought to monopolize the music-download market by stifling competition and limiting consumer choice.

The suit, which seeks $350 million in damages, is the third antitrust case brought against Apple since 2010. One accused a group of Silicon Valley companies of conspiring to keep wages low by agreeing not to poach each other’s employees. Another case, brought by the Justice Department, accused Apple of colluding to raise e-book prices.

The iPod case stems from a previous era in digital music, when the major record companies were obsessed by the rampant (and unauthorized) exchange of music traded on file-sharing services such as KaZaa and LimeWire. Songs sold through the iTunes store were wrapped in software, known as FairPlay, that prevented unauthorized copying.

Apple stopped using FairPlay in early 2009, after the major music labels allowed songs to be sold without copy protection. The suit covers iPods sold from September 2006 through March 2009.

Attorneys for plaintiffs Mariana Rosen and Melanie Tucker will argue that Apple used its FairPlay software to do more than provide the digital copy protection major music companies required in the early days of legal music downloads, but also to lock consumers into Apple’s closed ecosystem.

Apple did not license its FairPlay software to other device makers, which blocked consumers using other music players from accessing their paid iTunes music library, according to the suit.

Rival device-makers such as Dell, Olympus and Rio withdrew from the business, resulting in less competition — and higher prices for consumers, the suit alleges.

Apple declined to comment about the suit, but it is expected to introduce evidence at trial challenging the plaintiff’s claims about device pricing. The suit also maintains Apple used software updates as a technological tool to shut out competitors. Plaintiffs cite the example of JHymn software, which allowed consumers who bought songs through iTunes to listen to their downloads on non-Apple devices.

Apple responded with an update to its iTunes software that ended this compatibility, the suit claims.

“Apple continually redesigned its software — even though it admitted that doing so served no genuine anti-piracy purpose,” the suit alleges.

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