Today, Apple begins a defense against a lawsuit featuring nearly 8 million affected people of its FairPlay digital rights management technology, which the company used to lock down iPods from playing music from other digital music stores. A January 2005 complaint filed against Apple's DRM practices has evolved into a full-blown class action lawsuit that may cost the company as much as $350 million in damages.
The plaintiffs' lawyers claim Apple's FairPlay DRM encryption made it difficult and costly for them to move away from the iTunes Store, and impossible to use music they had already purchased from competing services like Musicmatch and Real Networks on their iPods.
Class action lawsuit may cost Apple as much as $350 million in damages
For those of you who weren't around to deal with the plague that was DRM on the iPod, it wasn't great. While you could upload music from your CD collection, early adopters who went with a digital music service other than iTunes were out of luck when they decided to get an iPod. At the time, you also couldn't use music from iTunes on any other MP3 player. Apple stopped selling songs with FairPlay DRM in early 2009, but the technology is still used on apps in the App Store.
Apple stopped selling songs with FairPlay DRM in early 2009, but the technology is still used on apps in the App Store
This is the second major antitrust case Apple is dealing with this year, as it continues to appeal a ruling in an ongoing ebooks lawsuit, which could cost Apple $450 million if the verdict is not overturned. While it may be a drop in the bucket for a company that made $8.5 billion in profits last quarter and is valued at nearly $700 billion, Apple doesn't want to get into a habit of paying out nearly half a billion dollars every time a class action lawsuit is brought against it.
Apple co-founder and former CEO Steve Jobs is once again involved in a lawsuit against Apple after his death, with his emails and a videotaped deposition playing a key role in the case. That's not necessarily a good thing for Apple; the plaintiffs will use Jobs' deposition and emails as evidence that Apple used the iPod as a tool to stifle competition from other music services, according to The New York Times. Speaking to the Times, the plaintiffs' lead lawyer Bonny Sweeney said, "We will present evidence that Apple took action to block its competitors and in the process harmed competition and harmed consumers."
Apple declined to comment.