Apple’s Jobs Must Answer Questions in iTunes Antitrust Suit

Tuesday, 22 Mar 2011 07:13 AM

Apple Inc. Chief Executive Officer Steve Jobs was ordered to answer questions in an antitrust dispute alleging the company operated a music-downloading monopoly, according to a court filing.

U.S. Magistrate Judge Howard R. Lloyd in San Jose, California, today agreed to allow limited questioning of Jobs by lawyers for consumers who filed the 2005 complaint. The deposition can’t exceed two hours and the only topic allowed is changes Apple made to its software in October 2004 that rendered digital music files engineered by RealNetworks Inc. inoperable with Apple’s iPod music player.

“The court finds that Jobs has unique, non-repetitive, firsthand knowledge about the issues at the center of the dispute over RealNetworks software,” Lloyd wrote.

Apple spokeswoman Kristin Huguet declined to comment.

ITunes customer Thomas Slattery sued Apple in 2005 seeking class-action status on behalf of consumers claiming the Cupertino, California-based company illegally limited consumer choice by linking the iPod to its iTunes music store.

Slattery asserted antitrust claims allegedly arising from Apple encoding its digital music files with proprietary software called FairPlay. This allowed music files purchased from the iTunes Store to be played only on iPods, and not using products by other manufacturers. FairPlay also prevented digital music sold by other companies’ online stores from being played on iPods, according to the complaint.

RealNetworks, Harmony

RealNetworks, a Seattle-based competitor in the digital- music market, announced July 24, 2004, that it would sell music from its online store that could be played on iPods on a technology it called Harmony. Just five days later, Apple announced software updates to its iPod FairPlay software that would render RealNetworks’ Harmony product again inoperable on iPods, according to Lloyd’s order.

By October of that year, when users were forced to update their iTunes applications and iPods, the digital-music files from RealNetworks’ online store were no longer interoperable with Apple’s iPods, Lloyd wrote.

A footnote in the court order says that by March 2009, all digital music files sold on iTunes were sold without proprietary software.

Lloyd rejected plaintiff requests to allow broader questioning of Jobs about Apple’s refusal to license FairPlay technology to other companies or its decision to use the technology on music purchased from iTunes and the iPod.

‘Remaining Claims’

Both of those issues were dismissed from the litigation in December 2009 by U.S. District Judge James Ware, Lloyd said.

“Plaintiffs remaining claims rely on the allegation that Apple attempted to maintain a monopoly in the audio download and portable music player markets by issuing updates to FairPlay, Apple’s proprietary digital rights management software,” David Kiernan, an attorney for Apple, wrote in a December court filing.

Kiernan also argued that “any deposition of Mr. Jobs would be repetitive, at best.”

Jobs took a medical leave from the company starting Jan. 17. The 56-year-old CEO, who has battled a rare form of cancer, has taken time off for medical reasons three times in the past seven years.

The case is Apple iPod, iTunes Antitrust Litigation, C05- 0037JW, U.S. District Court, Northern District of California (San Jose).


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