Antitrust lawsuit against Apple: 10 years in the making, shot down in three hours

Apple Key

A class-action antitrust suit against Apple, in the works for almost 10 years and contending the tech giant abused iPod updates to control the market, ended in just three hours after a jury decided in the company’s favor.

Eight members of a federal jury in California unanimously decided that Apple’s frequent software updates for iPods legitimately improved the devices, and were not used to block competitors and reduce consumers’ choices.

The plaintiffs, who first filed the suit in January 2005, asked for a minimum of $350m and alleged that Apple used software updates to keep songs sold by competitors off the devices.

In a statement, Apple welcomed the decision: “we thank the jury for their service and we applaud their verdict.” “Every time we’ve updated those products,” the statement read, “we’ve done it to make the user experience even better.”

Patrick Coughlin, an attorney for the plaintiffs, said they plan to appeal.

The jury was asked to decide whether Apple’s software improved its iPods or unfairly restricted what music could be played on iPods sold between 2006 and 2009. Apple’s iPods from that time played only songs synced from CDs or bought from iTunes, a limitation that the plaintiffs said violated antitrust law by forcing people to buy iPods in order to preserve their music.

Coughlin had told the jury that updates wiped those songs off the players completely: “your iPod is basically a paperweight at that point.” He argued that the software helped Apple tighten its hold on the market for music players.

William Isaacson, one of the attorneys for Apple, parried by discrediting the claim wholesale: “there’s not one piece of evidence of a single individual who lost a single song, not even a complaint about it.” He argued to the jury that the software updates almost invariably improved security or the ability to add movies and auto-sync features.

“We now have a plaintiff and a case asking you to hold Apple liable for innovating,” Isaacson told the jury.

The plaintiffs’ case was troubled throughout the trial’s brief duration. Two named plaintiffs were removed after Apple lawyers learned they had not bought iPods during the relevant years. Judge Yvonne Gonzalez Rogers also threw out one of the plaintiffs’ claims after the plaintiffs’ expert witness admitted he did not know whether an update made any difference.

In the trial’s final days the case continued to change: over the weekend the plaintiffs added a wholly new charge that Apple and Amazon had colluded. Gonzalez Rogers barred the attorneys from even presenting the new allegation. She told the jury to keep to the charges at hand, and to remember that “a company has no general legal duty to assist its competitors, including by making products interoperable”.

Jurors were shown emails between Apple co-founder Steve Jobs and Jeffrey Robbin, chief of software, in which Jobs warned Robbins about software that could circumvent iTunes. Jobs pressed Robbins to improve anti-piracy software, writing “there is no gray area on theft”. Apple’s lawyers used the emails to argue that Jobs and the executives wanted to stop hackers, and were not interested in stifling competition as the plaintiffs alleged.

Jobs himself testified to jurors in a video filmed months before his 2011 death. He said “we were very scared” that hackers would crack Apple’s security and jeopardize the company’s contracts with music labels.

Apple stopped using digital rights management software in 2009.

Powered by Guardian.co.ukThis article was written by Alan Yuhas in New York, for theguardian.com on Tuesday 16th December 2014 23.12 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010