Music Business

Steve Job’s Deposition in iPod Lawsuit Could Cost Apple $1 Billion

GTY_steve_jobs_ipod_nt_131004_16x9_992In a class action lawsuit nearly a decade in the making, Apple will appear this morning in the Oakland, California courtroom of U.S. District Judge Yvonne Gonzalez Rogers. Apple, accused of taking a monopolistic approach to digital music downloads, will be answering to years worth of anti-competitive claims against them in the California Federal Court. In a twist of irony, Steve Jobs' past email correspondence and video deposition could be the iceberg that sinks Apple's ship. Should the jury finds them to be in violation of the federal antitrust law, the verdict could come with a price tag up to three times the size of the estimated competitor damages of $350 million. 

The case was originially filed in January of 2005 at the rise of digital music and mobile listening devices. Attorneys for consumers and electronic retailers have made their case against Apple, Inc. saying their use of restrictive software forced potential music buyers into using iPods and iTunes instead of purchasing arguably more affordable products. In hindsight, Apple's founder, Steve Jobs, did the company no favors by clearly stating his desire for a closed ecosystem in an email to other Apple executives in 2003. 

Jobs Speaks: 

"We need to make sure that when Music Match launches their download music store they cannot use iPod," he wrote of software company MusicMatch's then-plan to open its own store. "Is this going to be an issue?"

Larger-apple-lawsuit-1Apple boasted that their agreements with large record labels allowed for sustainable digital downloads in a world that was quickly turning toward unauthorized file sharing, but their unwillingness to reach across the aisle in terms of authorized music share and blatant blocking of compatibility efforts made by companies like RealNetworks, made it clear that Apple was playing for keeps. In laymans terms, Apple made it impossible to access the music you purchased unless you were using their product or their platform to access the files. It would be like buying a hardback book, but only being able to read it at your desk. 

The implications this lawsuit could have for the tech giant make this a case of unusally high interest and particularly worth following. Apple did cease the use of their restrictive FairPlay software in 2009, but the case remains active – an abnormality as most antitrust cases don't make it to court. 

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