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Apple Hit with Music Monopoly Lawsuit
Friday, January 4th, 2008 at 8:05 AM - by
Apple is facing a lawsuit that claims the company is violating the Sherman Antitrust Act for failing to support Microsoft's DRM-protected WMA music files on the iPod. The case was filed on December 31, 2007, and the plaintiffs are hoping to get their suit certified as a class action, according to InformationWeek.
The case alleged that Apple placed "unneeded and unjustifiable technological restrictions on its most popular products in an effort to restrict consumer choice, and to restrain what little remains of its competition in the digital music markets."
The complaint went on to say that the iPod shuffle's SigmaTel STMP3550 chip supports the WMA format, but "Apple's crippleware operating system software prevents the iPod Shuffle from playing WMA files."
While the suit claims that Apple is intentionally crippling its products to force consumers into purchasing music only from the iTunes Store, that charge may be difficult to prove in court. Apple CEO has openly stated that his company includes copy protection in songs only because the record labels require it.
Apple also offers EMI's music library without copy protection at the same price as copy protected songs -- all playable on AAC-compatible music devices. Amazon MP3, potentially the biggest competitor to the iTunes Store, offers 2.9 million DRM-free songs in the MP3 format, all of which are playable on the iPod.
The plaintiffs also alleged that Apple is abusing its market dominating position to price its iPod media players in a "monopolistic, excessive, and arbitrary" way. The suit pointed to the US$100 price difference between the 1GB and 4GB iPod nano and noted that there is only a $5.52 price difference in a $4.15 1GB and $9.97 4GB Flash memory chip.
Apple has not commented on the pending litigation.
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