Apple named in ‘monopoly’ lawsuit
p2pnet news | Music:- In a kind of warped, backhanded compliment to Apple, on the last day of last year, looking for class-action status, Stacie Somers and Helen Zeldes filed an anti-trust lawsuit against the company.
They’re alleging Apple maintains an illegal monopoly on the digital music market, says InformationWeek.
“Apple has engaged in tying and monopolizing behavior, placing 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 states,” they say, according to the story.
Apple’s iTunes is repeatedly held up as the one and only successful corporate music download service. However, around five years ago, it started life as a loss-leading, DRM-loaded front end for Apple’s iPod, and it hasn’t changed since. And given the ridiculous wholesale prices charged by the Big 4, it’s hard to see how Apple can be making money out of iTunes even now, if it’s succeeded in going into the black at all.
It might also be said the first true corporate download site is Amazon, which has just signed up Sony BMG, which now joins the other three organised music cartel members, Warner Music, EMI and Vivendi Universal, by offering heavily qualified DRM-free downloads.
Meanwhile, “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,” says the story.
The suit, “contends consumers who own iPods can buy music only from iTunes, an unlawful tie-in that violates U.S. antitrust laws,” says Computerworld, adding:
“Apple could license the WMA format for as little as .03 cents per iPod, or for a total of $800,000 based on Apple’s 2005 iPod sales, the suit reads.”
Says Adrian Kingsley-Hughes on ZDNet:
“Apple could have a hard time making this go away because of the claims that the SigmalTel STMP3550 chip used in Apple`s iPod Shuffles supports WMA but that the functionality is crippled by Apple. By not offering support for protected WMA, the lawsuit claims that Apple is locking out the competition.
“Another point raised by the lawsuit is price, specifically why the $5.52 price difference between a 1GB and 4GB results in a $100 price difference between the 1GB and 4GB iPod nano.
“Additionally, the claims made by Apple (and Apple apologists) that music labels are unwilling to license music in DRM-free form seems a bit weak in light of Amazon being able to offer 2.9 million songs from over 33,000 record labels in DRM-free format. Was it really the music labels dragging their heels over DRM-free music or was it Apple using DRM to protect the monopoly and blaming the music industry? Only the courts are likely to get to the bottom of this issue.”
Stay tuned.
Also see:
InformationWeek – Antitrust Lawsuit Charges Apple With Monopolizing Online Music, January 3, 2008
heavily qualified – Sony BMG dumps DRM – kinda, January 4, 2008
Computerworld – Apple music monopoly lawsuit seeks class-action status, January 4, 2008
ZDNet – Latest antitrust lawsuit targeting Apple’s weak spots, January 4, 2008
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January 4th, 2008 at 1:17 pm
Amazon’s DRM-free music is exactly why Apple doesn’t have a monopoly. If you want to listen to an iPod, and you don’t want to buy from iTunes, go to Amazon, which is able to play on virtually any digital music player available. If you don’t like Apple’s profit margins on the iPod, well, there’s no gun to your head forcing you to buy it. Apple is no more a monopoly than MS is, you still have plenty of choice available, just because you don’t like the way they are doing things doesn’t mean you don’t have the choice.
January 4th, 2008 at 1:33 pm
So if I’m to understand correctly….Apple’s innability or unwillingness to support WMA (I don’t know if it’s entirely their fault….Micro$oft probably also plays a part) is a monopoly, but if one proprietary format (ie WMA) dominated the entire digital download market, requiring all consumers who wanted to take part to purchase a compatible device, it would perfectly fine. Yeah right.
January 4th, 2008 at 1:55 pm
Shawn says: “Apple is no more a monopoly than MS is”
Microsoft pays computer vendors to pre-install Windows on them. This is pure bribery.
Unless you were referring to XBox/360, you just stated that Apple uses anti-competitive methods of furthering iPod sales, much like Microsoft does with Windows.
January 5th, 2008 at 6:06 am
As much as I dislike apple as a company, the big 4 are on the supply side of the equation, not apple. There are plenty of places to get mp3′s out there. When i tunes falls apart, it will probably be due to good old market forces, not this type of lawsuit.
January 5th, 2008 at 1:44 pm
The music industry should have developed the high definition music format but no, they are still debating how to DRMised the audio DVD and SACD better instead.
January 5th, 2008 at 1:51 pm
Microsoft pays computer vendors to pre-install Windows on them. Actually this is the only way they can distribute window VISTA that nobody want. It is very slow, very buggy, is fiull of DRM and spywares.
Window XP acceptance worked because most users went for window me a big piece of bloat-ware compare to 95) to XP with a definitive advantage in stability and although window XP is bloatware too compare to 2K. But window XP to Vista NO WAY! I will switch to Linux instead.