I am all for Apple winning this frivolous ambulance chasing case but hear me out...
It can't be as simple as manufacturer X charges Y amount for product Z while manufacturers A B and C charged D (an amount less than Y) for their products which conceptually do the same as product Z, that would just be called free market and/or capitalism.
By 2005 Apple had a significant share of the market for MP3 players, though there were plenty of competitors, and if the only way you could buy digitally distributed music at the time for an iPod was to buy it through iTunes (DRM), unless you removed the DRM of the original source which wasn't as simple as just using iTunes to sync music, it could create a "captive" audience which Apple could "exploit" by charging more for the iPod knowing their consumers could lose their "investment" in their music library purchased through iTunes, again the users could remove the DRM from the iTunes songs and then put the music on another device.
Also if during that time period competitors found workarounds or loopholes that could allow the competitors to sync their DRM music to an iPod which would likely have no negative impact to the performance of the iPod and Apple went about closing those flaws (FairPlay DRM), remember non-DRM or tracks ripped from other media types weren't affected but we all know tracks can be ripped wrong and cause issues, to keep their "captive" audience captive in their closed ecosystem, even if they were "forced" by a contract with the music industry, would that not be wrong of a company to do?
Here are the two claims copied directly from the lawsuit:
- The lawsuit claims that Apple violated federal and state laws by issuing software updates in 2006 for its iPod that prevented iPods from playing songs not purchased on iTunes.
- The lawsuit claims that the software updates caused iPod prices to be higher than they otherwise would have been.
In claim 1... notice that this case only talks about third-party music syncing to iPods... not your iTunes music playing on other devices. Therefore... the whole iTunes "lock-in" and "captive audience" argument isn't being directly addressed.
This case is not about Apple's lock-
in... it's about locking-
out third party music stores.
Do closed systems automatically trigger antitrust violations? Should every store be forced onto every device?
Apple didn't think so... and frankly I don't either. Apple's claim to fame is that they control the entire experience... the software, the hardware, the store, the media. Apple can't deliver a great experience if they let other cooks into the kitchen.
Using an example from today... should third-party app stores be forced onto my iPhone? Hell no!
But is
forbidding third-party stores an antitrust violation? In my opinion... no.
In claim 2... they say Apple was overcharging for iPods.
This was Apple's iPod lineup in early 2005:
$99 - iPod Shuffle 512MB
$149 - iPod Shuffle 1GB
$199 - iPod Mini 4GB
$249 - iPod Mini 6GB
$299 - iPod 20GB
$349 - iPod U2 20 GB
$349 - iPod Photo 30GB
$449 - iPod Photo 60GB
The lawsuit is claiming that these prices were higher than they
would have been because Apple implemented a software update that disallowed third-party music stores. The lawsuit is an attempt for the plaintiffs to recover money after buying these "overpriced" iPods.
How the hell can they prove what iPod prices
would have been?
If anything... iPod prices always got
lower over time while adding
more capacity and features.
The first iPod was 5GB for $400
But when this lawsuit was filed... you could get a 30GB iPod for $350
Didn't they notice that?
I don't understand how issuing a software update to block third-party music stores caused prices to be higher.
Guess what... Apple DID block third-party music stores and prices actually got LOWER.