January 4th, 2008
Sure bet for 2008: More Apple lawsuits
Nothing appears to bring out the snarky comments and questionable legal actions than success in the technology markets. Apple’s winning combination of the iPod and the iTunes Music Store seems guaranteed to keep the lawsuits coming in 2008 and beyond.
Last week, on the last day of the past year, Apple was hit with yet another lawsuit that claims that iTunes and the iPod constitute a monopoly for the music market. In addition, this antitrust action reportedly says that Apple’s lack of support for WMA formatted audio — Microsoft’s propriety Windows Media Audio format — is itself a violation.
“Apple, however, deliberately designed the iPod’s software so that it would only play a single protected digital format, Apple’s FairPlay-modified AAC format,” the complaint states. “Deliberately disabling a desirable feature of a computer product is known as ‘crippling’ a product, and software that does this is known as ‘crippleware.’ “
Bloggers such as ZDNet’s own Adrian Kingsley-Hughes, suggests in a posting that the writing is on the wall for Apple. He says Apple is “on shaky ground,” and that “Apple could have a hard time making this go away.”
Of all the lawsuits filed against Apple lately, this is the one that’s likely to be the most damaging because it asks some tough questions. Eventually, Apple is going to have to face the music over these claims of exercising illegal monopoly powers.
Come on! These claims and inflated consequences to Apple are all a bunch of hooey.
What are we to make of all the stories and advertisements for what appears to be an increasing number of music players (like Microsoft’s improved Zune)? And what of the new online stores from big players, some of which offer DRM-free formats.
Of course, in the first place, none of us are forced to buy our music online — we can always purchase hardcopy formats and then drag the content over to our portable digital players.
In addition, the pricing allegations are flat out crazy. Why does anything cost what it does? Just take a stroll through a shoe store. Or look at the list of Windows Vista SKUs.
Besides, this isn’t the first such legal proceeding against Apple on iTunes and it won’t be the last. I thumbed through Apple’s recent 10-K annual report filed in Nov. and found 10 pages of lawsuits lists (pages 24 to 34). A number concern the iPod and iTunes.
For example, on Page 31 there’s The Apple iPod iTunes Antitrust Litigation (formerly Charoensak v. Apple Computer, Inc. and Tucker v. Apple Computer, Inc.); Black v. Apple Inc. This is a bunch of cases that have been rolled into one. Here are some of the previous claims:
… alleging various claims including alleged unlawful tying of music purchased on the iTunes Store with the purchase of iPods and unlawful acquisition or maintenance of monopoly market power.
… alleging various claims including alleged unlawful tying of music and videos purchased on the iTunes Store with the purchase of iPods and vice versa and unlawful acquisition or maintenance of monopoly market power.
… alleging that the Company is attempting to maintain a monopoly by precluding customers from using non-iTunes downloads on iPods and from using iTunes music on non-iPod MP3 players. Plaintiff alleges that the Company’s alleged monopolization violates the Florida Antitrust Act and the Florida Deceptive and Unfair Trade Practices Act. Plaintiff seeks unspecified damages and other relief.
Sound familiar? Yadda, yadda, yadda. Perhaps the latest action will be tossed into the above mix.
Here’s the context: behind these lawsuits is the simple fact that the world seems to go nuts when Apple has a success. The PC community and analysts all wrote off Apple about a dozen years ago and said the company was dead.
But the “Apple apologists” hung with the platform and the company. And it didn’t die. Now, the company has a great success in the consumer digital content segments — by the way, the very market that the enterprise-focused PC-centric companies once discounted. So, another day and another lawsuit.
Apple’s executives must be trembling in their boots. Or whatever they wear.
David Morgenstern has covered the Mac market and other technology segments for 20 years. See his full profile and disclosure of his industry affiliations.
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