Federal lawsuit over iTunes/iPod monopoly

[Dulanic]

http://www.kentucky.com/mld/kentucky/entertainment/16346789.htm

NEW YORK - As if its options woes weren't trouble enough, Apple Computer Inc. said Friday it is facing several federal lawsuits, including one alleging the company created an illegal monopoly by tying iTunes music and video sales to its market-leading iPod portable players.

The case, filed July 21, is over Apple's use of a copy-protection system that generally prevents iTunes music and video from playing on rival players. Likewise, songs purchased elsewhere aren't easily playable on iPods.

The plaintiff is seeking unspecified damages and other relief. The court denied Apple's motion to dismiss the complaint on Dec. 20.

Another lawsuit, filed Nov. 7, alleges that the logic board of Apple's iBook G4 fails at an abnormally high rate. The plaintiff is seeking unspecified damages. In a filing with the Securities and Exchange Commission, Apple said its response to the complaint is not yet due.

The Cupertino, Calif.-based company also disclosed that PhatRat Technology LLC filed a lawsuit Oct. 24 alleging patent infringement. The Nike-iPod product in question, developed jointly with Nike Inc., allow runners to keep track of how far and how fast they've gone. The company's response to the complaint is not yet due.

Separately, Apple is facing a securities lawsuit accusing the company and some of its current and former officers of improperly backdating stock-option grants, failing to properly account for them and making false financial statements. Defendants responses to the complaint are not yet due.

The lawsuits, many of which seek class-action status, were disclosed in Apple's delayed regulatory filing with the SEC.

The company cleared Chief Executive Steve Jobs and the rest of its current management of misconduct involving the stock-option practice, despite Jobs' awareness of favorable grant dates. The company restated past earnings Friday as a result of its three-month probe.

Apple shares rose about 4.9 percent to close at $84.84 Friday on the Nasdaq Stock Market following the announcement.

 

[Shawn]

:thumbsup:

 

[shocksyde]

While I agree with the lawsuit, isn't Microsoft doing the same thing?

 

[Dulanic]

Originally posted by: shocksyde
While I agree with the lawsuit, isn't Microsoft doing the same thing?

How so?

 

[MrChad]

I fail to see how iTunes can in any way be classified as a monopoly.

From Wikipedia:

Primary characteristics of a monopoly

* Single Seller

A pure monopoly is an industry in which a single firm is the sole producer of a good or the sole provider of a service. This is usually caused by barriers to entry.

* No close substitutes

The product or service is unique in ways which go beyond brand identity, and cannot be easily replaced (a monopoly on water from a certain spring, sold under a certain brand name, is not a true monopoly; neither is Coca-Cola, even though it is differentiated from its competition in flavor).

* Price maker

In a pure monopoly a single firm controls the total supply of the whole industry and is able to exert a significant degree of control over the price, by changing the quantity supplied (an example of this would be the situation of Viagra before competing drugs emerged). In subtotal monopolies (for example diamonds or petroleum at present) a single organization controls enough of the supply that even if it limits the quantity, or raises prices, the other suppliers will be unable to make up the difference and take significant amounts of market share.

1. iTunes is not the only seller of digital music files, nor is it the only seller of music for the iPod. I have lots of legal music on my iPod and I haven't purchased a single song from iTunes.

2. There are dozens of substitutes for both iPod and iTunes.

3. Apple has established a fixed pricing scheme for iTunes, but they exert no control over the price of other music store alternatives.

 

[JackBurton]

The iTunes/iPod suit is complete billsh!t. That should be thrown out of court and the plaintiff punched in the face for being a moron.

 

[Amused]

Originally posted by: JackBurton
The iTunes/iPod suit is complete billsh!t. That should be thrown out of court and the plaintiff punched in the face for being a moron.

Agreed. However I believe making the plaintiffs pay all of Apple's legal fees would be a better punishment.

 

[JackBurton]

Originally posted by: Amused

Originally posted by: JackBurton
The iTunes/iPod suit is complete billsh!t. That should be thrown out of court and the plaintiff punched in the face for being a moron.

Agreed. However I believe making the plaintiffs pay all of Apple's legal fees would be a better punishment.

I'll go with that... AND a punch in the face.

 

[marvdmartian]

Gee, there's no Apple fanbois in here, are there??

I look at it like this. If you're smart/foolish (pick your choice) enough to buy an iPod, you deserve to be saddled with iTunes, and any other restrictions that owning an iPod entail. If you weren't smart enough to do your homework before buying/asking for one, then you double deserve it!

However, if you want to be able to make up your own playlists, from your own (legally owned) music that you've ripped from your own cd's, without dealing with DRM or any of the other "Big Brother" bullsh*t, then go find something else to play your music.

I personally bought a Sandisk Sansa 6gb player (got in on the uber-fantastic deal from Amazon, just before Christmas, and got one for $100! ), and think I made the best choice. I refuse to buy music I already own, and definitely refuse to buy it a second or third time, if something happens to my music player and I have to replace it!

Oh, and the plaintiff does have a valid point, in that Apple does (pretty much) force you to use their program to download (purchase) music for their player. Funny, how people didn't have a problem with Microsoft getting sued by the feds for monopolization, when we were "forced" to have to put up with IE when putting Windows on our computers.......yet now think it's wrong that someone does the same to Apple?? Fanbois, for sure!!

 

[mugs]

Originally posted by: marvdmartian
Oh, and the plaintiff does have a valid point, in that Apple does (pretty much) force you to use their program to download (purchase) music for their player. Funny, how people didn't have a problem with Microsoft getting sued by the feds for monopolization, when we were "forced" to have to put up with IE when putting Windows on our computers.......yet now think it's wrong that someone does the same to Apple?? Fanbois, for sure!!

Very many people had a problem with that.

But that situation isn't really analogous to this one, because Microsoft has a virtual monopoly on the desktop OS business and Apple doesn't have anything close to a monopoly on MP3 players.

 

[NFS4]

Originally posted by: marvdmartian
Gee, there's no Apple fanbois in here, are there??

I look at it like this. If you're smart/foolish (pick your choice) enough to buy an iPod, you deserve to be saddled with iTunes, and any other restrictions that owning an iPod entail. If you weren't smart enough to do your homework before buying/asking for one, then you double deserve it!

However, if you want to be able to make up your own playlists, from your own (legally owned) music that you've ripped from your own cd's, without dealing with DRM or any of the other "Big Brother" bullsh*t, then go find something else to play your music.

I personally bought a Sandisk Sansa 6gb player (got in on the uber-fantastic deal from Amazon, just before Christmas, and got one for $100! ), and think I made the best choice. I refuse to buy music I already own, and definitely refuse to buy it a second or third time, if something happens to my music player and I have to replace it!

Oh, and the plaintiff does have a valid point, in that Apple does (pretty much) force you to use their program to download (purchase) music for their player. Funny, how people didn't have a problem with Microsoft getting sued by the feds for monopolization, when we were "forced" to have to put up with IE when putting Windows on our computers.......yet now think it's wrong that someone does the same to Apple?? Fanbois, for sure!!

Apple fanbois blah blah blah. I HATE BULLSH!T:|

I have an 80GB iPod and just bought my GF a 2GB iPod nano. Why did I get them instead of a Zune/PlaysForSure device? B/C the interface is second to none, the iTunes music/syncing interface is much better than Windows Media Player IMHO, there are tons of accessories out for each (cheap chargers/cases/sleeves/etc.) on eBay, and the resale value is high as heck on these things (I sold my 30GB 5G iPod for just $50 less than what I paid for it a year ago).

And nobody is FORCING you to use the iTunes Music Store. All of my music is stored as MP3s on my iPod. I don't use the iTunes Music Store. I rip my CDs using iTunes and store them as MP3s.

 

[Amused]

Originally posted by: marvdmartian
Gee, there's no Apple fanbois in here, are there??

I look at it like this. If you're smart/foolish (pick your choice) enough to buy an iPod, you deserve to be saddled with iTunes, and any other restrictions that owning an iPod entail. If you weren't smart enough to do your homework before buying/asking for one, then you double deserve it!

However, if you want to be able to make up your own playlists, from your own (legally owned) music that you've ripped from your own cd's, without dealing with DRM or any of the other "Big Brother" bullsh*t, then go find something else to play your music.

I personally bought a Sandisk Sansa 6gb player (got in on the uber-fantastic deal from Amazon, just before Christmas, and got one for $100! ), and think I made the best choice. I refuse to buy music I already own, and definitely refuse to buy it a second or third time, if something happens to my music player and I have to replace it!

Oh, and the plaintiff does have a valid point, in that Apple does (pretty much) force you to use their program to download (purchase) music for their player. Funny, how people didn't have a problem with Microsoft getting sued by the feds for monopolization, when we were "forced" to have to put up with IE when putting Windows on our computers.......yet now think it's wrong that someone does the same to Apple?? Fanbois, for sure!!

I'm far from an "Apple fanboi." Hell, I don't even own an iPod and even I know you don't need to buy music from iTunes to have music on your iPod. The first thing iTunes does is ask if you want to add any existing music on your computer to iTunes.

So no, the Plantiff does NOT have a valid point. Only an idiot would believe one is locked into buying music from iTunes to use an iPod.

 

[her209]

Originally posted by: NFS4
And nobody is FORCING you to use the iTunes Music Store. All of my music is stored as MP3s on my iPod. I don't use the iTunes Music Store. I rip my CDs using iTunes and store them as MP3s.

Here is the complaint that was filed:

The case, filed July 21, is over Apple's use of a copy-protection system that generally prevents iTunes music and video from playing on rival players. Likewise, songs purchased elsewhere aren't easily playable on iPods.

 

[Gunslinger08]

This is just another frivolous lawsuit. You are not entitled to a DAP that can play anything you download from anywhere. They created a system that works. You have (many) other options if you really want a DAP that can play other formats.

 

[Amused]

Originally posted by: her209

Originally posted by: NFS4
And nobody is FORCING you to use the iTunes Music Store. All of my music is stored as MP3s on my iPod. I don't use the iTunes Music Store. I rip my CDs using iTunes and store them as MP3s.

Here is the complaint that was filed:

The case, filed July 21, is over Apple's use of a copy-protection system that generally prevents iTunes music and video from playing on rival players. Likewise, songs purchased elsewhere aren't easily playable on iPods.

That's just not true.

 

[AnMig]

"However, if you want to be able to make up your own playlists, from your own (legally owned) music that you've ripped from your own cd's, without dealing with DRM or any of the other "Big Brother" bullsh*t, then go find something else to play your music."

90% of all my songs in 3 of my families IPODS are from CD's that we already owned. The fact that my wife was able to do this on her own (non techy) was a testament to the usability of i tunes. Non of our ripped MP3's have drm on them. And itunes does not prevent us from making our own playlist from our ripped music. I dont know where this comment is coming from.


"Oh, and the plaintiff does have a valid point, in that Apple does (pretty much) force you to use their program to download (purchase) music for their player."

Apple does not force you to use there program to purchase music, you can purchase music anywhere you want and place it in your IPOD. It is a lot easier to purchase from itunes since the itunes software is integrated to itunes site. They may be able to force them to put links on the i tunes software to other MP3 sites.



I hate drm or any copy protection on the music that I buy from I tunes or whatever site. I make it a point to strip all drm from my store bough MP3's.

I think you may have some wrong pre-conceived ideas about IPOD and itunes at least on this points that i raised.

 

[NFS4]

Originally posted by: her209

Originally posted by: NFS4
And nobody is FORCING you to use the iTunes Music Store. All of my music is stored as MP3s on my iPod. I don't use the iTunes Music Store. I rip my CDs using iTunes and store them as MP3s.

Here is the complaint that was filed:

The case, filed July 21, is over Apple's use of a copy-protection system that generally prevents iTunes music and video from playing on rival players. Likewise, songs purchased elsewhere aren't easily playable on iPods.

You can't even playback Microsoft PlaysForSure music/video stuff on Zunes, so what's the big deal?

And why should Apple's media files be compatible with Microsoft-based players?

 

[her209]

Originally posted by: Amused

Originally posted by: her209

Originally posted by: NFS4
And nobody is FORCING you to use the iTunes Music Store. All of my music is stored as MP3s on my iPod. I don't use the iTunes Music Store. I rip my CDs using iTunes and store them as MP3s.

Here is the complaint that was filed:

The case, filed July 21, is over Apple's use of a copy-protection system that generally prevents iTunes music and video from playing on rival players. Likewise, songs purchased elsewhere aren't easily playable on iPods.

That's just not true.

I don't know if its true or not. Just stating what was in the complaint.

 

[darkswordsman17]

Originally posted by: Amused

Originally posted by: JackBurton
The iTunes/iPod suit is complete billsh!t. That should be thrown out of court and the plaintiff punched in the face for being a moron.

Agreed. However I believe making the plaintiffs pay all of Apple's legal fees would be a better punishment.

Yeah, they're going to need to come up with laws against frivolous lawsuits very soon.

Did any of these people involved in this take Econ 101 in college? As has been said this market is not a monopolistic one. Its much closer to an oligopoly, and that was before Microsoft even entered the market.

Now that iTunes sells video this lawsuit loses even more steam, as there are quite a few other options for that.

I'm not quite sure if I think its wrong for iTunes and iPod being so tightly knit, but thats a big part of the reason that Apple has been successful in this market (and no not because they're forcing anybody to use the two, but because people want to use the two), but the fact is this lawsuit is just plain stupid on its accusation and any halfway decent lawyer should be able to tear it to shreds before it even goes to court.

 

[doze]

Apple just beat out the competition with a decent product and good marketing but I certainly wouldn't call it a monopoly. Of the people i know (geek and non geek) with MP3 players more have other brands than apple.

When my mom asked me what kind of player to get my little bro for xmas the sansa e260 was the obvious choice for price and performance. It was $75 less than the 4Gb nano and has micro sd expansion slot and fm radio built in.

 

[her209]

Originally posted by: darkswordsman17
I'm not quite sure if I think its wrong for iTunes and iPod being so tightly knit, but thats a big part of the reason that Apple has been successful in this market (and no not because they're forcing anybody to use the two, but because people want to use the two), but the fact is this lawsuit is just plain stupid on its accusation and any halfway decent lawyer should be able to tear it to shreds before it even goes to court.

Couldn't the same be said about Windows/Office or Windows/IE or Windows/WMP?

 

[darkswordsman17]

Originally posted by: her209

Originally posted by: darkswordsman17
I'm not quite sure if I think its wrong for iTunes and iPod being so tightly knit, but thats a big part of the reason that Apple has been successful in this market (and no not because they're forcing anybody to use the two, but because people want to use the two), but the fact is this lawsuit is just plain stupid on its accusation and any halfway decent lawyer should be able to tear it to shreds before it even goes to court.

Couldn't the same be said about Windows/Office or Windows/IE or Windows/WMP?

Yes, which is why people still use those more than their alternatives today for the most part (and Microsoft gets to bundle them). The thing that got Microsoft in trouble on their monopoly case is that they were offering discounts to companies like Dell and other large OEMs if they would put an IE icon on the desktop and either not install Netscape or else make it so it was more difficult to access. This was determined to be anti-competitive practice and is what netted Microsoft its punishment (and not the fact that they bundled those programs together).

 

[jfall]

Superior product != monopoly

 

[FilmCamera]

Originally posted by: jfall
Superior product != monopoly

iPod's aren't superior products though.

 

[drinkmorejava]

The funny thing is apple didn't even use it's market power to create this scenerio. It's been like this since the begining, even before the ipod was the massive success it is now. As much as I hate itunes and everything connected to it, they're ignoring the massive number of consumer votes which approve of the setup.