Apple's $1bn anti-competition trial might collapse

A court case against Apple, which could see the company facing damages of $1bn, might collapse.

Lawyers for Apple have raised a last-minute challenge saying new evidence suggested that the two women named as plaintiffs may not have purchased iPod models covered by the lawsuit.

The case is considering whether the hardware giant abused its dominant position in the digital music market.

The lawsuit covers iPods purchased between September 2006 and March 2009.

During that period Apple used software that meant only rights-protected music purchased from its iTunes store could be played on its devices.

Serial number
Lawyers representing both consumers and businesses claim that the restrictions meant Apple could inflate the prices of iPod in an anti-competitive manner. They are seeking $350m in damages, which could be tripled under US competition laws.

But after lead plaintiff Marianna Rosen testified on Wednesday, Apple lawyers checked the serial number on her iPod Touch and found it was purchased in July 2009.

The other main plaintiff, Melanie Wilson, also bought iPods outside the relevant timeframe, they indicated.

"I am concerned that I don't have a plaintiff. That's a problem," Judge Yvonne Gonzalez Rogers said at the end of the trial's third day of testimony in Oakland, California.

Lawyer Bonny Sweeny said that her team was checking for other receipts. She conceded that while Ms Wilson's iPod may not be covered, an estimated eight million consumers are believed to have purchased the affected devices.

The case has been rumbling on for years and offers a fascinating insight into the early days of the digital music business.

At the start of the millennium, the big record labels were terrified that illegal copying of digital music could ruin their businesses.

Rivals frustrated
To help placate them, Apple created digital rights management software known as FairPlay but early versions of it were easily cracked by music pirates.

The software also frustrated rivals such as RealNetworks, who found that music from its digital music store could not be played on iPods.

In response, RealNetworks announced a similar technology - Harmony - which allowed music purchased from the RealPlayer music store to be played on iPods.

It led Apple chief executive Steve Jobs to famously accuse the firm of adopting the "tactics and ethics of a hacker to break into the iPod".

By 2007 Apple's software had become more sophisticated and restrictive.

In the trial it emerged that, between 2007 and 2009, if an iPod owner tried to sync their device with iTunes and had music from another digital store on the device, they would receive an error message telling them to restore their iPod to factory settings. This effectively wiped all non-iTunes music from the device.

Apple maintained at the trial that the software and restrictions were necessary to protect users from malicious content and hackers.

If the case continues it will hear video testimony from Steve Jobs, filmed shortly before his death.

Judge Gonzalez Rogers is currently considering her options and has asked both sides to file written arguments as to how they think the trial should proceed.

(BBC)

ANN.Az