iPod Antitrust Lawsuit Could Cost Apple $350 million in Damages

This week Apple will need to face an antitrust lawsuit first filed nine years ago. This time the class-action lawsuit alleges Apple has violated federal antitrust laws and California’s unfair competition law in an attempt to maintain its monopoly of the downloadable music and portable media player markets. The potential damage the lawsuit can cause is $350 million.

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The lawsuit comes five years after Apple and record labels dropped DRM (digital rights management) protection in iTunes Store music purchases. It is worth noting here, though, that Apple negotiated the DRM drop after the lawsuit was filed. Anyways, the company managed to dismiss some claims that were part of the original filing.

What remains to be discussed in front of the court in Oakland, California, this weeks is Apple’s monopolistic policy implementing FairPlay DRM protocols which essentially locked all iPod users into the iTunes ecosystem.

The latest case to bring Mr. Jobs’s spirit into a courtroom is set to begin on Tuesday in Oakland, Calif. It is a class action involving older iPods, which played only songs sold in the iTunes Store, or those downloaded from CDs, not music from competing stores. The plaintiffs are consumers who say Apple violated antitrust law because to keep their music, people had to stay with the iPod, and buy higher-priced ones rather than cheaper, alternative music players. Apple has since discontinued this system.

Among the evidence presented in court, there will be emails written by Apple co-founder Steve Jobs, as well as a videotaped deposition taken before his death that will portray him as “planning to break a competitor’s product to protect Apple’s grip on digital music”, the New York Times writes.

The jury will also hear other star witnesses: top Apple executives such as Phil Schiller, the company’s head of worldwide marketing, and Eddy Cue, head of iTunes.