Steve Jobs' Testimony Expected to Play Major Role in iPod Antitrust Lawsuit

[SeaFox]

Do they market Kindle books to be used on any book reader or do they market them as Kindle books? Does Sony sell games that they claim will work in any video game system? Does Microsoft sell programs they claim will work for OS X, Linux, etc?

Uh, I have Kindle books and I can read them just fine but I don't own a Kindle. I can read them with the Kindle application for Windows. Of I can just got to read.amazon.com and use their Cloud Reader site. I can also get a Kindle app for iPhone/Pod/Pad.

As for Microsoft -- lets ask the people in their Mac business unit.

 

[x0vash0x]

I remember working at CircuitCity during the holiday seasons and specifically telling people 'iPods will only work with iTunes. There are ways around iTunes, but there is no guarantee that an iPod will work with any other music service. If you want to use another music service, don't use an iPod.'

People were surprised when they learned this. I remember a few people switching from iPod to a another MP3 player because they didn't enjoy iTunes.

 

[MagnusVonMagnum]

I fail to see how Apple could possibly be a "Trust" when the *CD* ruled the world back in 2005. If anything, Apple was just another start-up digital music player and store when they started. Given the fact that MP3s worked on the iPod and anyone else's player as well as unprotected AAC not being limited to Apple, the ONLY question is the (now defunct for music) Fairplay system that limited Apple music sales on iTunes to Apple devices. But no one stopped other services from selling music to other devices (e.g. Amazon selling MP3s or brick and mortar stores selling compact discs or records). Where is the monopoly? There is NONE. Where is the TRUST (e.g. collusion with another company to restrict trade to only Apple)? I see no evidence of one given the music industry would sell their music through just about any online or store retailer. Thus, the lawsuit is RIDICULOUS. I typically hate monopolies, but there is NONE here.

What really happened is that Apple quickly became the #1 online digital music retailer in the country and makers of other devices wanted to try and sell their crap device to people that had already bought a large library of music through iTunes, but having Fairplay in place would discourage those people from buying a device that could not play some or all of their music. But this is akin to a maker of 8-tracks being upset that someone who bought a large collection or records might not be interested in buying an 8-track player that couldn't play any records! Or more to the point, it'd be like Sony trying to sue that VHS tapes won't play in its Beta-max players and they won't license them the right to make an adapter to do so in order to attract more VHS tape owners to buy Betamax players even though the movie industry can and would sell original movies to both formats. It's ridiculous and should be dismissed out of hand. The fact it wasn't dismissed when the lawsuit was first filed is a travesty of the American justice system and shows just how BROKEN it really is these days.

I remember working at CircuitCity during the holiday seasons and specifically telling people 'iPods will only work with iTunes. There are ways around iTunes, but there is no guarantee that an iPod will work with any other music service. If you want to use another music service, don't use an iPod.'

People were surprised when they learned this. I remember a few people switching from iPod to a another MP3 player because they didn't enjoy iTunes.

It sounds like you gave bad (incorrect) advice to those people. No wonder they were surprised since it's not true. iPods could always play MP3s and thus would work with music files purchased from just about any other music service out there that sold MP3s. That was true then and it's still true now (e.g. I can buy an MP3 from Amazon.com and it will load onto my iPod just fine). Yes, you need to use iTunes to sync the files, but you do NOT need to buy your music from iTunes or use it as a player on your computer. How is that all that different from copying files over with a loader program or even Finder? It's just a method to move the files over to the device and it was available for Mac and Windows so it was no big deal at all.

and one more thing I am sure some has mentioned it Sony's ATRAC format was total crap you had to convert your MP3's to get them to play on ATRAC with a Sony player - which is why I NEVER bought one of those :/

ATRAC itself was NOT "total crap".

In fact, it was used in Mini-Disc recorders/players and was almost totally audio transparent (very similar to 360kbps MP3 or 256kbps AAC sonically). The fact you had to convert something over does not make it crap any more than the format you were using would be crap if it had to be converted to be used (e.g. when burning a CD with MP3s). It's an absurd statement, IMO.

I bought a Mini-Disc recorder/player the same year as the first iPod. The initial iPods didn't have much storage. Early low bit-rate files were not sonically transparent. ATRAC at the time was almost sonically transparent. I could play more music by changing discs (2.5" hard shell units that could not get fingerprints, etc.) You could not get more playing time on a set hard drive size iPod. I think at the time it was the right choice. I had a player in the car as well. It was a simple matter to convert my CD collection to Mini-Discs as needed/desired. I didn't have to convert MP3s because back then I didn't have ANY MP3s. In fact, early on just about the only people that had MP3s either converted them themselves from CD type sources or pirated them off sites like Napster. Most of us know that the only reason MP3 became so successful was because of all the pirating going on from sites like Napster back then. Apple was the first company to successfully SELL legitimate digital music in quantity. I bought my first iPod when the iPod Touch came out. Until then, I used CDs and Mini-Discs. I now have a car player that will play AACs and MP3s and WMAs. I copy music from my iTunes library and other sources onto a USB stick and insert it into the car's USB port. They play just fine.

 

[x0vash0x]

It sounds like you gave bad (incorrect) advice to those people. No wonder they were surprised since it's not true. iPods could always play MP3s and thus would work with music files purchased from just about any other music service out there that sold MP3s. That was true then and it's still true now (e.g. I can buy an MP3 from Amazon.com and it will load onto my iPod just fine). Yes, you need to use iTunes to sync the files, but you do NOT need to buy your music from iTunes or use it as a player on your computer. How is that all that different from copying files over with a loader program or even Finder? It's just a method to move the files over to the device and it was available for Mac and Windows so it was no big deal at all.

Yeah, you can now because most music is DRM-Free. However, that wasn't always the case. In the early days there were competing DRM formats that weren't compatible. Many of the MP3 Players selected a DRM format to support and used. Apple used FairPlay which was exclusive to Apple products. The biggest competing DRM format at the time was PlaysForSure which basically all other music player devices supported.

It was basically Microsoft vs. Apple on DRM.

Neither of them won because to consumers, being walled into either for music was stupid. Consumers wanted to buy music from wherever they wanted and used it on whatever device they wanted, which is what we have today.

It's the same thing consumers want for videos, but not sure that'll ever happen.

 

[orestes1984]

Classic "SCO Linux" case, we're practically bankrupt so give us money because we were relevant once, but missed the boat

The mid 90s called you missed your chance with streaming audio RealPlayer, you were even less of a thing than Napster was in the grand scheme of things, etc, etc... Bye!

Eff off Real your a pathetic joke laden with malware because you can't make any money and your product sucks. Don't let the door hit your ass on the way out.

 

[gnasher729]

You cannot use iTunes to download MP3 format.

I do that all the time, actually. Apple doesn't sell music in MP3 format, but many audiobooks are available as podcasts in MP3 format and iTunes downloads them just fine.

 

[InsoftUK]

BS

It's the music labels that insisted on DRM. Apple ditched it as soon as they could.

I understand that the lawsuit is about the idea that the iPod didn't support multiple DRM formats but that was logistically impossible. Apple's deal with the labels allowed iTunes sales only as long as FairPlay wasn't hacked. Apple had to work non-stop to stay ahead of attempts to crack it.

There is no way that Apple could open up their hardware to multiple companies using multiple formats and expect to maintain the same level of security. (Security that was, remember, required by the music labels in exchange for the iTunes music store to exist.)

These people wanted a miracle and are crying because Apple couldn't pull it off. It wasn't possible.

EDIT: A great Gruber article from 2006 saying just about the same thing. His argument is a little different but the conclusion is the same:

http://daringfireball.net/2006/06/drm_interoperability

Just like to add that if not being able to use other DRM files on iPod is a none issue as on would just burn off a CD and then import to iTunes and onto the iPod like Aplle DRM files could be transferred to other devices the same way, if the competitors didn't allow this then they should be suied not Apple

 

[mikef07]

Uh, I have Kindle books and I can read them just fine but I don't own a Kindle. I can read them with the Kindle application for Windows. Of I can just got to read.amazon.com and use their Cloud Reader site. I can also get a Kindle app for iPhone/Pod/Pad.

As for Microsoft -- lets ask the people in their Mac business unit.

Yes you can, but does Amazon do certain things to the kindle so that you can only read them on the Kindle? No per your post. Do they exhibit monopolistic behavior trying to thwart you using them in windows or on an iPad? No. Therein lies the difference

----------

I stand corrected. Hope you can bill for hours like that. This is the most sound legal explanation I have seen on this board.

1) They will get 40% like most class action lawyers get. Speaking from experience

2) All Plaintiffs need to do is prove is that antitrust law was broken. Honestly they don't care about the specific violation nor do they care about Apple hurting other businesses. By proving that Apple broke Antitrust law they in turn hurt the consumer, thus they damaged the class.

----------

I fail to see how Apple could possibly be a "Trust" when the *CD* ruled the world back in 2005. If anything, Apple was just another start-up digital music player and store when they started. Given the fact that MP3s worked on the iPod and anyone else's player as well as unprotected AAC not being limited to Apple, the ONLY question is the (now defunct for music) Fairplay system that limited Apple music sales on iTunes to Apple devices. But no one stopped other services from selling music to other devices (e.g. Amazon selling MP3s or brick and mortar stores selling compact discs or records). Where is the monopoly? There is NONE. Where is the TRUST (e.g. collusion with another company to restrict trade to only Apple)? I see no evidence of one given the music industry would sell their music through just about any online or store retailer. Thus, the lawsuit is RIDICULOUS. I typically hate monopolies, but there is NONE here.

What really happened is that Apple quickly became the #1 online digital music retailer in the country and makers of other devices wanted to try and sell their crap device to people that had already bought a large library of music through iTunes, but having Fairplay in place would discourage those people from buying a device that could not play some or all of their music. But this is akin to a maker of 8-tracks being upset that someone who bought a large collection or records might not be interested in buying an 8-track player that couldn't play any records! Or more to the point, it'd be like Sony trying to sue that VHS tapes won't play in its Beta-max players and they won't license them the right to make an adapter to do so in order to attract more VHS tape owners to buy Betamax players even though the movie industry can and would sell original movies to both formats. It's ridiculous and should be dismissed out of hand. The fact it wasn't dismissed when the lawsuit was first filed is a travesty of the American justice system and shows just how BROKEN it really is these days.



It sounds like you gave bad (incorrect) advice to those people. No wonder they were surprised since it's not true. iPods could always play MP3s and thus would work with music files purchased from just about any other music service out there that sold MP3s. That was true then and it's still true now (e.g. I can buy an MP3 from Amazon.com and it will load onto my iPod just fine). Yes, you need to use iTunes to sync the files, but you do NOT need to buy your music from iTunes or use it as a player on your computer. How is that all that different from copying files over with a loader program or even Finder? It's just a method to move the files over to the device and it was available for Mac and Windows so it was no big deal at all.



ATRAC itself was NOT "total crap".

In fact, it was used in Mini-Disc recorders/players and was almost totally audio transparent (very similar to 360kbps MP3 or 256kbps AAC sonically). The fact you had to convert something over does not make it crap any more than the format you were using would be crap if it had to be converted to be used (e.g. when burning a CD with MP3s). It's an absurd statement, IMO.

I bought a Mini-Disc recorder/player the same year as the first iPod. The initial iPods didn't have much storage. Early low bit-rate files were not sonically transparent. ATRAC at the time was almost sonically transparent. I could play more music by changing discs (2.5" hard shell units that could not get fingerprints, etc.) You could not get more playing time on a set hard drive size iPod. I think at the time it was the right choice. I had a player in the car as well. It was a simple matter to convert my CD collection to Mini-Discs as needed/desired. I didn't have to convert MP3s because back then I didn't have ANY MP3s. In fact, early on just about the only people that had MP3s either converted them themselves from CD type sources or pirated them off sites like Napster. Most of us know that the only reason MP3 became so successful was because of all the pirating going on from sites like Napster back then. Apple was the first company to successfully SELL legitimate digital music in quantity. I bought my first iPod when the iPod Touch came out. Until then, I used CDs and Mini-Discs. I now have a car player that will play AACs and MP3s and WMAs. I copy music from my iTunes library and other sources onto a USB stick and insert it into the car's USB port. They play just fine.

You are looking at it all wrong. I see example after example after example of people saying Apple did not break Anti trust laws or anti competition laws. There are tens of thousands of pages of case law regarding this. How many people here are familiar with all of the case law out there? 0

Thus all of this ..."This is a ridiculous lawsuit.. is complete and utter garbage. The plaintiffs already had to show case law that supported their position when this case went up for dismissal. It was granted class action status and was not dismissed thus anyone saying that this lawsuit is ridiculous is spouting complete and utter garbage.


I have no doubt that all of the technological things people have posted are true, but that is irrelevant when it comes to antitrust and anti competition laws. There are defined guidelines that make up antitrust laws. If Apple broke them (and a judge thinks there is enough evidence at least for a trial) then they will lose. If they can prove they did not then they will win. 100 more posts about the history of iPod, MP3, or if one can play their x box games on their PS4 is irrelevant.

 

[SmileyDude]

Yes you can, but does Amazon do certain things to the kindle so that you can only read them on the Kindle? No per your post. Do they exhibit monopolistic behavior trying to thwart you using them in windows or on an iPad? No. Therein lies the difference[

This case isn't about Apple not allowing music sold on the iTunes store to be used elsewhere. RealNetworks wanted to put their music on the iPod with DRM. iPods didn't support RealNetwork's DRM, so they hacked FairPlay to put a DRM wrapper around their content.

This wasn't even a technical requirement. If all they wanted to do was get their music to play on the iPod, they could go DRM free and it would work fine. The iPod didnt care where the music was from.

This case is all about RealNetworks wanting to sell to iPod users but also keep their DRM intact. I don't see why Apple or anyone else besides RealNetwork and the labels would actually want this.

 

[TWSS37]

I remember working at CircuitCity during the holiday seasons and specifically telling people 'iPods will only work with iTunes. There are ways around iTunes, but there is no guarantee that an iPod will work with any other music service. If you want to use another music service, don't use an iPod.'

People were surprised when they learned this. I remember a few people switching from iPod to a another MP3 player because they didn't enjoy iTunes.

I too worked at CC, in fact I was sales manager of the audio department at the time. Around where I was, the Apple tax was too much for people. "Why would I spend that much when it can only hold a few songs versus the one over here for half the cost, holds more songs and has no restrictions on what I can put on it?" Since this was the early 2000's and Apple had not yet gained it's current social status, iPods would be the ones in stock Dec 24th with people frantically running in buying anything that was left on the shelf.

 

[Thunderhawks]

More to the point, it would be a ridiculous and certainly unsuccessful strategy for Honda unless they sold enough Civics to force gas stations to adopt their nozzle. See, market power.

Around 2003 Rhino installed a proprietary valve on their propane tank cylinders which could not be refilled by anybody else.

I don't know if they were sued and lost or whether consumers forced them back to "normal" by not using their tanks.

Seems to me that if consumers were so upset and wouldn't have bought iPods Apple would have had to open up. (If they contractually could)

Don't see any evidence where Apple forced anybody to buy an iPod.
However, Apple entered an existing market and did not have or create a monopoly.

Even after the iPod was introduced, consumers had other options to listen to music. (their music)

 

[InsoftUK]

This case isn't about Apple not allowing music sold on the iTunes store to be used elsewhere. RealNetworks wanted to put their music on the iPod with DRM. iPods didn't support RealNetwork's DRM, so they hacked FairPlay to put a DRM wrapper around their content.

This wasn't even a technical requirement. If all they wanted to do was get their music to play on the iPod, they could go DRM free and it would work fine. The iPod didnt care where the music was from.

This case is all about RealNetworks wanting to sell to iPod users but also keep their DRM intact. I don't see why Apple or anyone else besides RealNetwork and the labels would actually want this.

What RealNetworks tried to do is wrong, it was trying to break the law, I call that theft, trying to steal someone else's hard work is not very smart.

RealNetwork should of just removed the DRM like Apple did so it could be transferred to other devices, but no they wanted to keep DRM because the music industry demanded it so, removing it and RealNetworks would lose the sale of music, Apple had so much control by then the industry couldn't threaten Apple the same and I that is what happened.

 

[JHankwitz]

Not really dirty tricks. But on the face of it, if I buy a mp3 player that is not an iPod, will all the songs I download from itunes work?

I convert my iTunes audios to mp3 and burn to disc all the time to play in my car CD player.

 

[MagnusVonMagnum]

You are looking at it all wrong. I see example after example after example of people saying Apple did not break Anti trust laws or anti competition laws. There are tens of thousands of pages of case law regarding this. How many people here are familiar with all of the case law out there? 0

Thus all of this ..."This is a ridiculous lawsuit.. is complete and utter garbage. The plaintiffs already had to show case law that supported their position when this case went up for dismissal. It was granted class action status and was not dismissed thus anyone saying that this lawsuit is ridiculous is spouting complete and utter garbage.


I have no doubt that all of the technological things people have posted are true, but that is irrelevant when it comes to antitrust and anti competition laws. There are defined guidelines that make up antitrust laws. If Apple broke them (and a judge thinks there is enough evidence at least for a trial) then they will lose. If they can prove they did not then they will win. 100 more posts about the history of iPod, MP3, or if one can play their x box games on their PS4 is irrelevant.

I've been told time and time again that Apple is doing nothing wrong in terms of antitrust by not allowing hardware makers to install OS X on their hardware. Without a doubt, Apple has created its own virtual "monopoly" (for lack of a better word) on the HARDWARE PLATFORM for OS X. Now THAT is a CLOSED SYSTEM. In other words, Apple gets to sell 100% of ALL hardware for the OS X platform. You might compare this to Nintendo not allowing clones of the Wii to be sold or a system to run Wii games. The difference, however, is that Apple's hardware uses nearly 100% off-the-shelf compatible PC parts (i.e. they have custom motherboards made for them and use EFI (Windows can use EFI now too directly) instead of Bios, but the system is Windows and Linux compatible like all PC hardware). In other words, Apple has carved out an OS niche and demanded that users pay them exorbitant prices for standard PC hardware in order to run that OS. Now THAT just reeks of unfair competition and the numbers prove it. Despite catering to a tiny tiny OS market share, they have been on and off the #1 hardware manufacturer of "PC Hardware". How is that POSSIBLE when they don't make a single system that comes with Windows pre-installed? It's possible because they unfairly demand consumers buy their standard vanilla PC hardware in order to run OS X. If the hardware were special, one could understand. But it's not. It's just PC hardware with a flimsy (as evidenced by Hackintoshes) lock on it, but Apple has shown they will *SUE* if someone else attempts to sell PCs with OS X on them (e.g. Psystar). They easily WON that lawsuit in no time at all.

So, basically, given the above, how do these people think they have a snowflake's chance in HELL of winning a lawsuit over an encryption algorithm for a vanilla digital music playback system that not only works with Windows, but with all unprotected MP3 music files as well? The music industry demanded an encryption scheme back then as copy protection. It was not Apple's choice. Their refusal to license their own personal encryption system is not any different than them refusing to license OS X to run on clone maker PC hardware. But unlike software libraries, the MUSIC itself was available for any system and easily converted to any format by the music industry to sell and the home user to convert their own CD libaries over to anyone's player (whereas OS X specific and Windows specific software will not just run or instantly convert to run on another operating system). Thus, this is nowhere NEAR the same level of unfairness to the consumer as the OS X clone issue (where users are paying through the nose for vanilla hardware to run OS X, the so-called "Apple Tax") and it got dropped in court in a red hot second.

Apparently, Apple did not have to license OS X to Psystar so would they have to license Fairplay to anyone? Even though Apple was able to finally convince the music industry that copy protection on music files was bad for business and remove it, they still hold the rights to Fairplay and still use it on MOVIE files. If there should be a lawsuit, it should be a relevant one because if you buy movies on iTunes today, short of some tool like the defunct Requiem (which removed the DRM and got threatened with a lawsuit by Apple if they did not stop) you CANNOT play those movies on any other software player but Apple. THAT does suck since it's a PITA (unlike music rips) to convert movies from DVD/BD over to a digital computer format (Apple's format or otherwise). In fact, doing so may violate the DMCA. Thus, even though movies are "licensed" and not "owned", you can/will find yourself in a situation where you are stuck with a particular software player forever if you buy your movies on something like iTunes. Now THAT is a problem, not music and the reason why I don't buy movies in digital format but have to convert them myself anyway to avoid being tied to Apple (or someone else) forever.

 

[Michael Goff]

"We need to make sure that when Music Match launches their download music store they cannot use iPod," he wrote. "Is this going to be an issue?"


Reminds me of

"DOS ain't done until Lotus won't run."

 

[SmileyDude]

I've been told time and time again that Apple is doing nothing wrong in terms of antitrust by not allowing hardware makers to install OS X on their hardware. Without a doubt, Apple has created its own virtual "monopoly" (for lack of a better word) on the HARDWARE PLATFORM for OS X. Now THAT is a CLOSED SYSTEM. In other words, Apple gets to sell 100% of ALL hardware for the OS X platform. You might compare this to Nintendo not allowing clones of the Wii to be sold or a system to run Wii games. The difference, however, is that Apple's hardware uses nearly 100% off-the-shelf compatible PC parts (i.e. they have custom motherboards made for them and use EFI (Windows can use EFI now too directly) instead of Bios, but the system is Windows and Linux compatible like all PC hardware). In other words, Apple has carved out an OS niche and demanded that users pay them exorbitant prices for standard PC hardware in order to run that OS. Now THAT just reeks of unfair competition and the numbers prove it. Despite catering to a tiny tiny OS market share, they have been on and off the #1 hardware manufacturer of "PC Hardware". How is that POSSIBLE when they don't make a single system that comes with Windows pre-installed? It's possible because they unfairly demand consumers buy their standard vanilla PC hardware in order to run OS X. If the hardware were special, one could understand. But it's not. It's just PC hardware with a flimsy (as evidenced by Hackintoshes) lock on it, but Apple has shown they will *SUE* if someone else attempts to sell PCs with OS X on them (e.g. Psystar). They easily WON that lawsuit in no time at all.

So, basically, given the above, how do these people think they have a snowflake's chance in HELL of winning a lawsuit over an encryption algorithm for a vanilla digital music playback system that not only works with Windows, but with all unprotected MP3 music files as well? The music industry demanded an encryption scheme back then as copy protection. It was not Apple's choice. Their refusal to license their own personal encryption system is not any different than them refusing to license OS X to run on clone maker PC hardware. But unlike software libraries, the MUSIC itself was available for any system and easily converted to any format by the music industry to sell and the home user to convert their own CD libaries over to anyone's player (whereas OS X specific and Windows specific software will not just run or instantly convert to run on another operating system). Thus, this is nowhere NEAR the same level of unfairness to the consumer as the OS X clone issue (where users are paying through the nose for vanilla hardware to run OS X, the so-called "Apple Tax") and it got dropped in court in a red hot second.

You are making a lot of assumptions here. For one, just because Macs use Intel processors and chipsets doesn't mean their software can work unmodified on any PC. The Mac uses a subset of PC hardware, along with additional proprietary hardware that Apple designs. It's not a 1:1 equivalent. Yes, people have hacked OS X to run on PCs -- but that was work that others did, not Apple. And Windows does run on Macs -- but that is due to work Apple has done to provide drivers for their own machines.

Apple is under no obligation to provide their software to run on any random machine. That is a business decision that they've chosen not to make. You might think that it's Apple being greedy, but it's a lot more nuanced than that. You also mention Psystar as an example. But what you seem to have missed is that Psystar was basically encouraging theft of OS X -- Apple wasn't selling full copies of OS X without a Mac (the stores at the time were selling upgrade copies -- upgrades to the versions that came on the Mac). So the only way you can put OS X on non-Mac hardware is to pirate it.

On the hardware side, if you look at pure specs, it may certainly look like there is an Apple Tax. But that's conveniently ignoring a lot of things. I still haven't seen a PC laptop made to the precision of a MacBook Air or Pro. I've seen laptops that bear a resemblance but nothing quite like the actual fit and finish when looked at up close.

If you want to complain that Apple doesn't serve the low-end PC market, then go ahead. They've decided to go a different route. But that doesn't entitle anyone to take what they have made and use it on some random machine.

As far as their DRM goes, why do you think they need to support anyone else's DRM solution other than their own? They already allow you to use unprotected music. They even provided a way to remove the DRM from tracks you purchased without paying them a dime -- burn it to an audio CD and re-rip if you want.

This is a stupid lawsuit for consumers. The only thing it is doing is padding the pockets of lawyers. Nothing good for consumers would come out of this if Apple loses and nothing good comes out for consumers if Apple wins. If Apple actually lost this case and was forced to make a change to their hardware, it would be that they would actually have to support more DRM, and what consumer would want that?

----------

"We need to make sure that when Music Match launches their download music store they cannot use iPod," he wrote. "Is this going to be an issue?"


Reminds me of

"DOS ain't done until Lotus won't run."

I think it's easy to pick out tidbits from terse emails and run with them, but my reading of this was limited to the FairPlay DRM hack that RealNetworks implemented. I don't think Jobs would've had a problem if RealNetworks had implemented a solution that simply added unprotected tracks to iTunes upon purchase. In fact, I was pretty sure that's exactly what Amazon did with their MP3 store when they could start selling DRM-free tracks before Apple could on the iTunes Store. They would just automatically add the track to iTunes (using the interface that Apple provided to allow 3rd party apps to do so) and users could play them back on their iPods.

What we aren't seeing here is what kind of contractual obligations Apple was under in regards to FairPlay with the labels. Was Apple required to close up any FairPlay holes within a certain amount of time? I would say that an unauthorized 3rd party being able to apply FairPlay DRM to a track is a pretty big hole. Anyone who has that kind of knowledge probably has the ability to remove FairPlay from a track as well.

 

[Jon-Erich]

This sounds like a lawsuit brought on by sore losers. Apple's end to end control of their software and their devices is part of their business model. Also, it's not like they had a complete monopoly on the music player market. The highest percentage of marketshare they ever achieved was 70%. While that's a lot, that extra 30% still leaves room for plenty of competition. You don't don't like the way Apple's iPod and iTunes software works? Don't buy an iPod and don't support iTunes.

While I'm all for stopping monopolies that make competition impossible, this type of whining cannot persist. Instead of complaining about legitimate monopolies, other companies are going to scream monopoly every time they suck at business and their competitor has an edge over them by not sucking.

 

[VenusianSky]

Microsoft got hammered about the Internet Explorer thing but nothing stopped me from downloading an alternate browser. This fact will be forgotten very quickly indeed.

Yes, and Microsoft lost that antitrust case. Funny how opinions change about such matters when it is their "team" facing charges. Microsoft was bashed pretty hard over this at the time, but I got a feeling that the same will not happen to Apple. As someone in this thread earlier said "Steve wanted his venture to be successful? How dare him!". What about Bill Gates? How dare him want his company to be successful. In my opinion, the decision against Microsoft was just. Reason being was that Netscape Navigator, the only other real browser competitor, was not a free product. It was Netscape's core product of their business.

 

[IJ Reilly]

I stand corrected. Hope you can bill for hours like that. This is the most sound legal explanation I have seen on this board.

Ha, thanks. I'm not a lawyer and I don't play one the Internet. But I did start following antitrust closely during the '90s with U.S. v. Microsoft, picking up some useful knowledge along the way. What that case tells me is that the plaintiffs will have a tough row to hoe proving that Apple abused their market power. In U.S. v. Microsoft the DOJ spent years in court supplying evidence in what seemed like a slam-dunk case of competition abuse, but in the end, Microsoft had to pretty much hang themselves.

 

[IJ Reilly]

Around 2003 Rhino installed a proprietary valve on their propane tank cylinders which could not be refilled by anybody else.

I don't know if they were sued and lost or whether consumers forced them back to "normal" by not using their tanks.

Seems to me that if consumers were so upset and wouldn't have bought iPods Apple would have had to open up. (If they contractually could)

Don't see any evidence where Apple forced anybody to buy an iPod.
However, Apple entered an existing market and did not have or create a monopoly.

Even after the iPod was introduced, consumers had other options to listen to music. (their music)

That's just the thing about market power: if you don't have it, you can't abuse it. This is why the first step in any antitrust case is demonstrating that the accused company holds market/monopoly power in a defined market. This the plaintiffs have done quite readily by citing the shares of the digital player and download markets held by Apple. The next step is demonstrating that this power was abused to restrain trade. The argument made in the complaint is that Apple used the FairPlay linking of the iPod to iTMS to make it artificially difficult for users to switch to other media players once they'd bought FairPlay protected music (that's about as "forced" as it needs to be under antitrust law). As anyone who bought DRM'd music from Apple knows, this is quite true. But the plaintiff's argument is probably going to hinge on facts that aren't on the record yet (AFAIK) about Apple's relationship to the music industry. Apple will have to answer to why they did not license FairPlay to others.

----------

I've been told time and time again that Apple is doing nothing wrong in terms of antitrust by not allowing hardware makers to install OS X on their hardware. Without a doubt, Apple has created its own virtual "monopoly" (for lack of a better word) on the HARDWARE PLATFORM for OS X. Now THAT is a CLOSED SYSTEM. In other words, Apple gets to sell 100% of ALL hardware for the OS X platform.

Fundamental flaw alert: Apple has no market/monopoly power in the PC market, so the question of whether the Mac hardware platform is proprietary, closed, open, a monopoly (virtual or otherwise), is totally irrelevant to the case at hand. Lacking a demonstration of market power in a defined market (and the market for the company's own products doesn't count!), no abuse of competition is even arguably possible.

 

[KdParker]

You cannot use iTunes to download MP3 format.

I know they will have to be converted. An extra step that by now we shouldn't have to make when is comes to be purchasing music online IMHO.

 

[MagnusVonMagnum]

For one, just because Macs use Intel processors and chipsets doesn't mean their software can work unmodified on any PC.

With the EFI USB dongle one company created, it will install unmodified. The EFI check is purely Apple's attempt to block installation on standard vanilla PC hardware that has typically used Bios instead of EFI. Seriously, this lawsuit isn't that different from the Fairplay one.

Users with large libraries of software they bought for OS X cannot use that software with a competitor's computer any more than someone who bought a large music library with iTunes back then could play that music on a competitor's music player!

The Mac uses a subset of PC hardware, along with additional proprietary hardware that Apple designs. It's not a 1:1 equivalent. Yes, people have

And what proprietary hardware are you referring to? There is NONE that I'm aware of. Please don't say Thunderbolt. It's not proprietary.

hacked OS X to run on PCs -- but that was work that others did, not Apple. And Windows does run on Macs -- but that is due to work Apple has done to provide drivers for their own machines.

No one asked Apple to provide ANYTHING to make OS X run on other computers. This isn't about asking Apple to "provide" something, but to stop artificially restricting trade through a license and then refusing to sell that license to anyone else. It's NO different in that respect than what this lawsuit proposes except that with OS X it's on a much larger scale (all software is affected, not just music files).

Apple is under no obligation to provide their software to run on any random machine.

Again, we're not talking about Apple being forced to "provide" anything. I don't know where you get this idea from. You're pulling it out of a discussion no one is having. We're talking about them purposely blocking attempts of others to run their OS on other hardware. If all Apple did was not provide anything, there would be no argument.

Those who bought large libraries of Mac software now find that they may not be able to use current Mac hardware due to lack of expansion, etc. and now Apple provides NO solutions for these people. So should they have to buy all new software for Windows JUST because Apple refuses to cater to their hardware needs? But the argument over Fairplay isn't even about whether Apple provides for someone's needs. It simply argues it isn't fair to the competition to sell software that artificially excludes their hardware. How is that ANY different from OS X and computer hardware in general?

The arguments have typically been made that you can get a Windows machine instead and run software on Windows and there's very little software available for the Mac that isn't available for Windows. The problem is preference and existing software libraries. Why does anyone buy a different computer? They need one with more power. Do they pick one based on what OS it can run or based on their power needs or both? The OS limitation is artificial and created solely and for no other reason than to restrict trade in Apple's favor by making people buy a computer from Apple based on the OS above all else instead of just the best hardware for the price. If you had a large music library from Apple that's encrypted with Fairplay back then, like with OS X, you have to consider the cost of replacing that libary with one that works if you buy the other guy's player. How is that different from having to replace all your software you bought for OS X if you switch to a Lenovo PC? It's NO DIFFERENT except that the encryption could be removed/replaced quite easily with a music file. You cannot remove something to make Mac software work inside Windows. You can, however make OS X work on a PC quite easily with careful hardware choices. But Apple says no no no. You have to buy OUR hardware to run Photoshop because you already bought it for the Mac. Yeah, it costs more than most low to mid-end PCs, leaving people with the "choice" of paying through the nose either way.

That is a business decision that they've chosen not to make. You might think that it's Apple being greedy, but it's a lot more nuanced than that. You also mention Psystar as an example. But what you seem to have missed is that Psystar was basically encouraging theft of OS X -- Apple wasn't selling full copies of OS X without a Mac (the stores at the time were selling upgrade copies -- upgrades to the versions that came on the Mac). So the only way you can put OS X on non-Mac hardware is to pirate it.

Those copies at the time were in no way labeled as "upgrades". What if you already owned a licensed copy from another Mac and you wish to upgrade to newer hardware? It's the license agreement that prevents this, nothing else. Again, it's Apple that is restricting trade here to their own benefit through a license. If a license violates US Law, it is invalid.

If you want to complain that Apple doesn't serve the low-end PC market, then go ahead. They've decided to go a different route. But that doesn't entitle anyone to take what they have made and use it on some random machine.

Actually, my personal problem has been the opposite. Apple doesn't make machines with good GPUs. Now they don't make machines with expansion to even allow a good GPU.

As far as their DRM goes, why do you think they need to support anyone else's DRM solution other than their own? They already allow you to use

I don't know WTF you're talking about at this point. I never made such a claim. In fact, I said the case against Apple over iTunes doesn't have a leg to stand on. I feel like you're in some parallel universe at this point.

That's just the thing about market power: if you don't have it, you can't abuse it.

Antitrust laws aren't just about monopolies. That's only PART of the law. There also a restriction about purposely restricting commerce to one's advantage by tying together different markets. That is what Apple does.

Just because HP is only one manufacturer of printers among several others, does THAT mean they are allowed to license their printer to ONLY use their brand of ink or their brand of paper? No. Ink and paper are separate manufactured items from the printer. Just because it uses them doesn't mean HP can restrict the consumer from using someone else's brand of paper with their printer. They have TRIED to work around the ink thing, but it's not illegal to use someone else's ink in their cartridges. The best they can do is "discourage" it and even that is on shaky legal grounds, IMO (e.g. putting chips in ink cartridges so that other brand cartridges won't function without it is stepping over the line, IMO, but as long as someone else can make their own chip or you can inject new ink into old cartridges it probably can't/wont go anywhere).

This is why the first step in any antitrust case is demonstrating that the accused company holds market/monopoly power in a defined market. This

Apple became the #1 tech company in the world. They didn't get there by selling digital music or copies of Final Cut Pro! They got there by having NO COMPETITION for the hardware for their platform. They make 100% (save the few Hackintoshes out there) of the Mac computer hardware sales. They can run Windows, but Dell, Lenovo, etc. cannot run OS X. This is an artificial license problem, not a compatibility problem and thus it is Apple that created this ARTIFICIAL BARRIER TO TRADE and it's making them BILLIONS! Yes, in recent years, mobile has eclipsed desktop sales, but that was not the case until 2007! Apple came out of near bankruptcy and became profitable again because of the Mac.

Further evidence is that they were near bankruptcy when they DID sell licensed OS9 copies to other vendors. The first thing Jobs did when he took back over the company was to get rid of those licensees. This proves that Jobs felt Apple could not survive without limiting competition for hardware sales which is exactly what he did by reigning them back in like that.

Now Apple gets 100% of the sales from all Mac/iPod/iPhone/iPad computers. NO ONE ELSE gets this (i.e. Android is licensed to all manufacturers that want to license it and Windows did the same). This is how Apple can be #1 in profit and still only hold <20% of the mobile market and <10% of the computer market. They have been at times the #1 manufacturer of "PCs" because unlike HP, Lenovo, etc. they don't get their sales by having to compete against any of them. They get them because people want to run OS X and have NO OTHER CHOICES for hardware to run that operating system. The OS is separate from the hardware except by the software license that artificially ties them together. It is that same license that restricts free hardware trade to power the Mac software market.

It's the same thing if HP were to have a printer that was unique and people really loved, but to use it, you have to buy their paper and ink. If someone else's paper is used, it refuses to run (e.g. watermark must be present or whatever). Making a great printer doesn't give HP the right to force their paper division's product on the public in our society. They are not the same product! They are different products that work together.

the plaintiffs have done quite readily by citing the shares of the digital player and download markets held by Apple. The next step is demonstrating that this power was abused to restrain trade. The argument made in the complaint is that Apple used the FairPlay linking of the iPod to iTMS to make it artificially difficult for users to switch to other media players once they'd bought FairPlay protected music (that's about as "forced" as it needs to be under antitrust law).

Who forced people to buy music from iTunes? It's the same reason I won't buy movies from iTunes unless I can run something like Requiem. I don't want my movie library being tied to Apple either. No one is making me buy my movies from Apple, so how is it anymore relevant than this argument against OS X being licensed to run on PCs? It's the SAME argument. You could buy music elsewhere. I can buy Windows software elsewhere. But it's Apple that RESTRICTING what I can do after I bought software by making it hard for me to switch when I have a large software or music library. THEY ARE THE SAME THING in that regard and it's still true today with movies (which still have fairplay), but then so does Blu-Ray have copy guard. It's always the consumer that pays the convenience price and the pirates keep on pirating anyway so one could argue that these types encryption serve NO ONE.

As anyone who bought DRM'd music from Apple knows, this is quite true. But the plaintiff's argument is probably going to hinge on facts that aren't on the record yet (AFAIK) about Apple's relationship to the music industry. Apple will have to answer to why they did not license FairPlay to others.

They still don't license it (movies) to others and that creates the same problem as I mentioned above. And how is that SO different from having a software library for a Mac computer that won't work with a Dell, HP or Lenovo PC? If I want Photoshop for Windows, I have to buy it again! It costs more than most computers! How is that fair? But it's OK for Apple to say you can't license their operating system to run on someone else's hardware, but it's NOT OK to do the same with just Fairplay?

Fairplay can be removed and the movie will then work on anyone's software player, but you CANNOT just "remove" code from Mac software and have it work on a Windows machine. In fact, this already happened in the case of music. Fairplay for music is GONE. Apple will happily give you an unprotected version of your music (and at higher quality! 128kbps purchases are rewarded with unprotected 256kbps versions now). Apple won't let me run OS X on my Windows computer, though. These people want Fairplay to be FORCED to be licensed and I want OS X to be FORCED to be licensed. How is ANY different? It doesn't even need encryption removed. It just needs Apple to stop threatening legal action and the courts should have enforced that. The Psystar case never even got that far because the courts made it out to be copyright case, not an antitrust case.

Fundamental flaw alert: Apple has no market/monopoly power in the PC market, so the question of whether the Mac hardware platform is proprietary, closed, open, a monopoly (virtual or otherwise), is totally irrelevant to the case at hand. Lacking a demonstration of market power in a defined market (and the market for the company's own products doesn't count!), no abuse of competition is even arguably possible.

Again, you are talking about two different products! There is Apple's operating system SOFTWARE and there is Apple's computer HARDWARE. They are not the same product. Like a printer needs ink and paper, an operating system needs hardware to run on. Making both doesn't entitle you to restrict trade by artificially requiring one to be used with the other so you get all the sale of both products! That is what Antitrust Law was designed to stop. Yet it's what printer manufacturers try to do with INK anyway. They even sell printers below cost sometimes to sell you overpriced INK. I do not and will not buy printer ink from these companies. I get my Brother printer ink at 1/5 the cost what Brother charges for it.

Do you think Apple would be the most valuable tech company in the world if it didn't fix the hardware markets to its advantage? Look at Apple in 1998 and tell me that with a straight face. How are they now the #1 tech company on the planet if they didn't make a boat load of money by restricting the market in their favor? iPhones are 20% of the overall smart phone market at most. Macs are 7-10% of the overall PC market at most and yet Apple is #1? Yeah, it's because they don't have to compete for sales in a sub-market segment. In other words, if 20 hardware companies have to fight for that 90% Windows OS share, they end up with less than 1 company monopolizing all hardware sales for that 10% OS X share. It's that simple.

Apple could license OS X with a hefty fee to make other manufacturers play on an even keel with their hardware and the consumer might not save any money then on hardware, but they would have the potential for a lot better choices, at least. Or they could simply charge for OS X as part of the sale and create the same effect. Either way, it should be the consumer picking hardware on what's best for them, not having to pick some crap setup because that's all Apple decided to offer (e.g. the new unexpandable Mac Pro screwed over the old PCI Mac Pro pretty well with no other options now available. those people paid good money for their Pro software and Apple made sure they can't keep using it in cases where they need more speed and Apple has no solutions to let them keep using their PCI cards).

 

[IJ Reilly]

Antitrust laws aren't just about monopolies. That's only PART of the law. There also a restriction about purposely restricting commerce to one's advantage by tying together different markets. That is what Apple does.

Antitrust laws are not really about "monopolies" at all, as I have already explained several times. Monopolies in the basic sense of the term are perfectly legal and in fact are created by law (patents and copyrights). Product tying is also legal. Antitrust laws are about the anticompetitive use of market power to restrain trade. (They are also about trusts, cartels, and other conspiracies to fix prices, but this is not germane to this issue.) If you accepted these fundamental concepts you'd save yourself a lot of typing on subjects that are entirely unrelated to the case at hand, and to any other type of antitrust discussion, for that matter.

 

[daftpunker909]

Exactly. Issue here is that anti-competitive behaviors can only be illegal if you have a monopoly and you use that position to suppress competition in other markets.

Apple to this day does not have a monopoly in any of it's markets with healthy competition on all levels. The Mac share of the PC market is less than 10% and the iPhone in the smartphone market is less than 50%.

There is nothing illegal with keeping a system proprietary. As far as iPod goes, at the time of these allegations, there were many different portable digital music players and music services in competition with the iPod.

The only winner on this one are the attorneys and their fees. Love to see the plaintiff bill after this one closes.

Open systems is nice but there are no regulations forcing open interconnects in the consumer electronics market.

Telecommunications base station equipment is another story.

Who the hell is talking about the Mac or Iphone? The issue is that Apple's Ipod held 80% of the digital music player market and used it to their advantage as Steve Jobs' email shows.

 

[Swytch]

No, but if a company is found to have market power over a defined market, then they have to be careful that they are not abusing that power by creating artificial barriers to competition in that market.

but the only barrier i see apple created here was on their own device / software. They have to allow competition within their own product?

its not like itunes and ipod being linked together prevented anyone else from creating a mp3 player and music service - in fact many companies did exactly that, some even before Apple did - so there was competition and apple really just entered into that competition - and did a much better job at providing what customers wanted.

Also, Apple did not have any power in the Music Market prior to the release of the iPod and iTunes - so how exactly did they abuse any power that they did not have?