Ondrej Holzman A year ago it looked like Apple had problems with DRM protection in iTunes, but the opposite is true. Original decision the appeals court has now been reversed by Judge Rogers, and Apple will have to face in court the users it says it "locked" into its system between 2006 and 2009, preventing it from moving elsewhere. The plaintiffs are demanding 350 million dollars (7,6 billion crowns) from Apple as compensation.
The plaintiffs, who are users who purchased iPods during the aforementioned years, allege that Apple restricted them due to its FairPlay DRM system and made it nearly impossible for them to switch to competitors such as Real Networks. Apple constantly updated iTunes, ensuring that songs bought in a rival store from Real Networks could not be uploaded to iPods. According to the plaintiffs, this should have been the reason for Apple to be able to charge more for music in its own store.
Apple's lawyer previously said the plaintiffs had "no evidence at all" to prove Apple harmed customers because of FairPlay DRM, but the plaintiffs' lawyers are brandishing thousands of complaints from angry users who didn't like that their iPods wouldn't play songs obtained outside iTunes.
With Judge Yvonne Rogers ruling last week that the matter will go to trial, the ball is now in Apple's court. The California company can either settle with the plaintiff out of court or face up to nine figures in damages. According to the plaintiffs, Apple made tens of millions of dollars thanks to DRM. The trial starts on November 17 in Oakland, California.
Case background
The whole case revolves around the DRM (digital rights management) that Apple originally applied to its content in iTunes. This made it impossible to use it on products other than its own, thereby preventing illegal copying of music, but at the same time forcing users with iTunes accounts to use only their own iPods. This is exactly what the plaintiffs do not like, who point out that Apple tried to stop the competition from Real Networks that arose in 2004.
Real Networks came up with a new version of RealPlayer, their own version of an online store where they sold music in the same format as Apple's iTunes, so it could be played on iPods. But Apple didn't like it, so back in 2004 it released an update for iTunes that blocked content from RealPlayer. Real Networks responded to this with their own update, but the new iTunes 7.0 from 2006 again blocked competing content.
According to the plaintiffs in the current case, it is iTunes 7.0 that violates antitrust laws, as users were allegedly forced to either completely stop listening to songs purchased from the Real Networks store, or at least convert them to a DRM-free format (e.g. by burning to a CD and transferring back to a computer). The plaintiffs say this "locked" users into the iTunes ecosystem and increased the cost of purchasing music.
Although Apple countered that Real Networks were not taken into account when pricing songs on iTunes, and that they had less than three percent of the online music market in 2007 when iTunes 7.0 was released, Judge Rogers still ruled that the matter could go before the court. The testimony of Roger Noll, the plaintiffs' expert from Stanford University, played a key role.
Although Apple tried to discredit Noll's testimony by saying that his theory of overcharging did not fit Apple's uniform pricing model, Rogers said in her decision that the actual prices were not uniform after all, and there is a question of what factors Apple took into account when pricing. However, the issue here is not whether Noll's opinions are correct, but whether they meet the conditions for being recognized as evidence, which according to the judge they do. Rogers took over the nearly decade-long case after the retiring James Ware, who originally ruled in Apple's favor. The plaintiffs then focused specifically on the way in which Real Networks circumvented Apple's protection, and the subsequent counterattack by the apple company. Now they will get a chance in court.
350 million dollars is not 7,6 million crowns ………but it’s a shame
Apple vs EU – whoever wins, we lose.
Is it possible to delete uncomfortable comments?
drm in blueray, DVD is almost the same.
DVD and BluRay were not the actions of one company. In any case, the DRM there is also pretty hogwash, moreover, at least in the case of DVD, it is comically stupidly implemented.
Why should I sell baked goods from a competing bakery next door in my bakery?? The fact that I have a pleasant environment, seating for customers and a coffee with fresh pastries does not mean that I "lock" customers with me. Anyone can go big at any time. They also have a regular roll there...
It seems to me that everything is being tried on Apple, because it is known that it has enough money, and some people can make something out of it.
I'm old, or I really don't understand. I blame Google for having "its own conditions" for using ITS services... The EU doesn't like it.
Apple secured exclusivity on HIS players...the competition doesn't like it.
Can someone explain to me what is wrong?
Why don't I complain to car companies that I don't fit their parts into cars of competing brands? I won't even put a stupid competition valve on my car. Infiniti/Nissan (don't) force me to buy theirs and much more expensive. There are brands where you can't even change a bolt on a wheel without their help... but you just feel and actually agree with it when you buy a car/service.