wednesday, 17 december of 2014

Apple Wins iPod Antitrust Trial

A jury ruled in favor of Apple Inc. on Tuesday in a class-action lawsuit that accused the technology giant of violating antitrust laws by suppressing competition for its iPod music players.

After deliberating for only about three hours, an eight-person jury in U.S. District Court in Oakland, Calif., found that Apple’s iTunes 7.0 was a genuine product improvement, and therefore didn't violate antitrust laws. The decision was unanimous.

Apple applauded the jury’s verdict. “Every time we’ve updated those products—and every Apple product over the years—we’ve done it to make the user experience even better,” the company said in a statement.

The plaintiffs had said Apple made changes to its iTunes music service so it was incompatible with other companies’ devices, driving up the price of iPods. The plaintiffs, representing potentially eight million harmed consumers, were seeking $350 million in damages, which could have been tripled under antitrust laws.

Apple’s lawyers said it was a rare case where a jury was allowed to make the key decision of whether a product was a genuine improvement from earlier versions. Usually, a judge makes that decision.

Patrick Coughlin, an attorney for the plaintiffs, said they were happy that the case went to the jury, but that it was a “very tough case.” He said the plaintiffs plan to appeal the jury’s decision.

“Very few of these cases make it this far,” said Michael Carrier, a law professor at Rutgers University in New Jersey, because defendants such as Apple only need to show “a little bit of a product improvement and then it gets thrown out.”

For now, the verdict closes a 10-year legal battle over the iPod, a breakthrough portable music player when it was introduced that has been displaced by smartphones in recent years.

The 10-day trial took jurors back in time. The key events at issue took place in 2006 and 2007, as music downloads and iTunes grew in popularity. More recently, iTunes downloads have fallen, as users switch to streaming music services.

The trial also included a never-before-seen video of Apple co-founder Steve Jobs from a deposition in April 2011, about six months before he died. Mr. Jobs argued that Apple was scared of iTunes hackers and that it needed to add security features to appease record labels concerned about piracy.

Initially, the plaintiffs had argued that Apple’s iTunes 7.0 and 7.4 updates in 2006 and 2007, respectively, were anticompetitive. During the trial, Judge Rogers narrowed the plaintiffs’ case to only the iTunes 7.0 update.

Plaintiffs said security changes made by Apple in the iTunes 7.0 update weren't improvements, but maneuvers to block other music from playing on iPods. Plaintiffs said those changes made all other improvements irrelevant. In closing arguments on Monday, Mr. Coughlin compared the update to a new Snickers bar that was bigger and had more chocolate, but included a preservative that was toxic.

Apple’s lawyers said it made no sense for the company to harm its own product. Apple said the security fixes that disabled rivals’ software were necessary to patch a potential vulnerability. In the iTunes 7.0 update, Apple also added the ability to play movies on iTunes and scan through album art with Cover Flow.

Mr. Carrier said the plaintiffs’ case suffered after their two class representatives were dropped because neither had bought a relevant iPod during the period covered by the suit. The plaintiffs scrambled, finding an amateur ice dancer from the Boston area to become the face of their case.

(Published by Wall Street Journal – December 16, 2014)

latest top stories

subscribe |  contact us |  sponsors |  migalhas in portuguese |  migalhas latinoamérica