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Another Apple Antitrust Lawsuit

By David Fischer

A few days ago, another lawsuit was filed against Apple for maintaining a monopoly in the digital music market (via slashdot). According to Information Week:

The complaint against Apple claims that the company controls 75% of the online video market, 83% of the online music market, more than 90% of the hard-drive based music player market, and 70% of the Flash-based music player market.

…

The complaint takes issue with Apple’s refusal to support the Windows Media Audio format. “Apple’s iPod is alone among mass-market Digital Music Players in not supporting the WMA format,” it states, noting that America Online, Wal-Mart, Napster, MusicMatch, Best Buy, Yahoo Music, FYE Download Zone, and Virgin Digital all support protected WMA files.

This is based on the proposition that music companies “are generally unwilling to license their music for online sale except in protected formats.” Such assertions look increasingly tenuous as unprotected music becomes more widely available through legitimate channels. Amazon.com, for example, claims to offer “Earth’s biggest selection of a la carte DRM-free MP3 music downloads with more than 2.9 million songs from over 33,000 record labels.” A week ago, Amazon said that Warner Music Group would make its artists’ songs available in the unprotected MP3 format. EMI last year also began offering unprotected music online. And that’s to say nothing of Web sites like Amie Street that have been offering unprotected music from independent artists for even longer.

Apple, for its part, might reasonably claim it doesn’t want to license WMA from Microsoft, a cost the complaint speculates is unlikely to exceed $800,000, or 3 cents per iPod sold in 2005.

But the complaint goes beyond software licensing politics and charges Apple with deliberately designing its iPod hardware to be incompatible with WMA. One of the third-party components in iPods, the Portal Player System-On-A-Chip, supports WMA, according to the complaint. “Apple, however, deliberately designed the iPod’s software so that it would only play a single protected digital format, Apple’s FairPlay-modified AAC format,” the complaint states. “Deliberately disabling a desirable feature of a computer product is known as ‘crippling’ a product, and software that does this is known as ‘crippleware.’ “

More at The Unofficial Apple Weblog (“Here we go again”), MacUser (”People never get tired of suing Apple”) and Apple Unvarnished (”The lawsuit heads off into ridiculousness …“).

Technorati Tags: Apple, iTunes, antitrust

Full post as published by Antitrust Review on January 06, 2008 (boomark / email).