Apple misled iPod owners, plaintiffs allege at class action trial
OAKLAND, Calif. -- Plaintiffs on Tuesday started outlining their case against Apple, saying in a courtroom here that the electronics giant kept iPod prices high by implementing unneeded software updates. Because Apple wanted to hurt competitors and ban their music from iTunes, it ended up harming consumers in the process, attorneys for two plaintiffs in a class action antitrust lawsuit argued. The trial, which is slated to last nine days, will decide an almost decade-old claim that Apple's MP3 players may have been overpriced while the company used its iTunes software to squash cheaper devices. The crux of the case is a set of now-defunct policies that Apple instituted in the earliest days of the iPod to control how and where users of iTunes and owners of its music players could play back purchased songs. The plaintiffs argue that Apple, in restricting iPod owners to songs purchased only through iTunes and in banning songs from iTunes from playing on competing MP3 players, the company stifled competition. That kept iPod prices artificially high, the plaintiffs say. "Apple made those changes to its software after top executives at Apple learned that competitors had figured out a way to have their songs played on the iPod," Bonny Sweeney, the lead plaintiffs' lawyer, said Tuesday. "And there was a concern by Apple that this would eat into their market share."Apple's lead attorney refuted those claims. "This insertion of the stranger in the middle could not get everything right. It posed a danger to the consumer experience and to the quality of the product," William Isaacson said in defense of Apple's software updates. Isaacson also pointed out that the plaintiffs' claim that iPod prices were inflated happened to be at a time when iPod storage increased while prices either fell or remained flat. "There should be no damages here because prices went down and quality went up." The plaintiffs, Melanie Wilson and Marianna Rosen, are seeking $350 million. Because of its class action status, the lawsuit could award damages to as many as 8 million people who purchased an iPod between September 12, 2006, and March 31, 2009. Apple marketing chief Phil Schiller and iTunes chief Eddy Cue are set to take the stand in the coming days, and the plaintiffs also will play videotaped deposition from former CEO Steve Jobs, who died in 2011. See also: Everything you need to know about Apple's iPod class action suit This case is not Apple's first antitrust rodeo. The company, thanks to Jobs' often bullheaded business tactics, has been embroiled in other high-profile cases concerning the iPhone maker's competitive strategies and whether they stepped over the line. In 2010, Apple was accused of conspiring with other tech firms to fix employee wages to prevent competitors from recruiting top talent from one another. Two years later, Apple was accused of leading a charge in the e-book industry against Amazon, conspiring with the top US book publishers to fix prices of digital titles higher than Amazon wanted to sell them to consumers. Apple failed in its e-book crusade -- it may soon begin paying $400 million to as many as 23 million e-book customers -- and a rejected settlement agreement in the wage-fixing suit means Apple will face another antitrust trial in April. See alsoApple fights RealNetworks' 'hacker tactics'Apple's Jobs calls for DRM-free musicDRM-free iTunes Store to haunt Apple?Jobs ordered to testify in FairPlay antitrust case The current case involving iPods is complex, having evolved significantly since the original January 2005 filing. The suit initially alleged that Apple broke the law by restricting owners of its iPod to songs purchased only through iTunes. A court deemed that legal, however, and the plaintiffs have since altered the suit, alleging instead that Apple made a series of software updates to iTunes specifically designed to shut out competing music stores' ability to load their songs onto iPods. The case will aim to determine what effect Apple's FairPlay technology -- a so-called digital rights management tool that acts like a watermark made of code -- had on the market for MP3 players when it restricted iPod owners to iTunes and how to interpret Apple's behavior in protecting FairPlay using software updates. Apple refused to license FairPlay to competing music stores and would not allow other MP3 players to connect to iTunes. The plaintiffs lawyers will need to prove that Apple's actions were in violation of Section 2 of the Sherman Antitrust Act and California's Unfair Competition Law. Apple says that competing online music stores like RealNetworks, which designed a specific tool called Harmony so that customers could load its MP3s onto their iPods, were using the "ethics and tactics of a hacker." The crucial updates to Apple's iTunes software, numbered 7.0 and 7.4 and released in September 2006 and September 2007, were designed not to block companies like RealNetworks, Apple says, but to improve the user's experience and maintain the security of its software. The plaintiffs' argument, however, is that the updates "did not make the iPod faster, improve sound quality, did not make the iPod sleeker or smaller or cooler," but "prevented customers who had legally purchased songs from Apple's competitors from playing those songs on their iPod," Sweeney said. Steve Jobs, Apple's co-founder and former CEO who died in 2011, will appear on the stand through a taped deposition.Stephen Shankland/CNET Such "genuine product improvements," as they're called, would exempt a company's actions from being deemed anticompetitive. iTunes 7.0 is notable for introducing digital movie purchases to the store. Jobs called it at the time "the most significant enhancement" to iTunes "since it debuted in 2001." Yet the updates also contained specially designed code that would go so far as to force users to reset their iPods if they were loaded with unauthorized MP3 files, wiping the devices clean. "These fixes were really directed at competitors -- it blew up everything if you used a third-party player," said Roger G. Noll, a professor emeritus of economics at Stanford University and the first expert witness called by the plaintiffs Tuesday. "That was Apple's fix."Apple's Isaacson says the iTunes 7.0 and 7.4 updates were designed to improve security and purposefully keep third parties like RealNetworks, which Apple still considers a hacker, out of its system. "Harmony was outdated when FairPlay was updated. All Apple was doing was updating FairPlay," he said. "That's what happens when you reverse engineer the product and there's an update of that architecture." Neither RealNetworks nor any of the retailers named in the suit, including Best Buy and Walmart, have filed suits of their own. RealNetworks executives will not appear as witnesses. Instead, the trial will hinge on the words of Jobs and other Apple executives on the architecture of FairPlay and iTunes development and expert testimony on both sides from university professors on the strengths and weaknesses of the plaintiffs' antitrust argument. Ultimately, the case will not impact Apple beyond the potential monetary damages. The company began offering DRM-free music in January of 2009 and FairPlay is now used only to monitor the number of computers and other devices to which a user has downloaded a media file or mobile app. Music and other licensed media purchased from other companies like Amazon and Google can now be played on Apple devices. Yet more interesting is that the music landscape is now drastically different now than it was just seven years ago. The iPod has been on a steady decline since 2008 -- smartphones having demolished the MP3 player business -- while digital music downloads have begun losing ground to subscription streaming services like Spotify. --Shara Tibken contributed to this report.Update at 11:32 a.m. PT: Added comment from Apple's opening arguments.
Lenovo joins Chrome OS party with laptop for schools
Lenovo joins Chrome OS party with laptop for schools
Google got a big new ally in its Chrome OS push today: Lenovo, the No. 2 PC maker.Although Lenovo is a notable ally, it's only really a foot in the door for Google. Lenovo's new ThinkPad X131e Chromebook is only geared for schools. Presumably it could lead to greater things for Google if the device gets a good reception, but this shouldn't be confused with Lenovo pushing a mainstream device the way the two existing Chrome OS partners, Acer and Samsung, have done.It's not clear whether Lenovo has grander ambitions for Chrome OS, something that might cause alarm at Microsoft since it threatens both Windows and Office. Lenovo didn't respond to a request for comment on its plans but we'll update this story if it does.Other Chrome OS devices are in the works, judging by code names for hardware platforms surfacing in the software's source code and issue tracker. Francois Beaufort, who pores through those sources, said yesterday that Lenovo has been working on a Chrome OS device code-named Stout. He also said another device in the works, called Kiev, is a Chromebox from Acer. So far only Samsung has shipped a Chromebox, a standalone PC that lacks a Chromebook's built-in keyboard, mouse, and monitor.Related storiesAsus weighing Chrome versus AndroidThe Real Deal 193: Road Test - CES edition (podcast)Google shows off Chrome OS tablet ideas Chrome OS is a browser-based operating system; although it runs Linux under the covers, all the software people use are Web sites or Web apps. That means no Photoshop, Skype, iTunes, or Call of Duty, but it's fine for looking up recipes, connecting on Facebook, checking e-mail, and using Google Docs.Chrome OS is a natural fit for Google Apps -- a subscription service that grants access to a variety of browser-based Google services including Gmail, word processing, calendars, and presentations. It ordinarily costs $50 per user per year, but Google Apps for education customers is free -- a nice deal compared to Microsoft Office.The ThinkPad X131e is a rugged design that already was available with Windows. It'll be available starting February 26 for schools that bid for it.The laptop has an 11.6-inch, 1,366x768 LED antiglare screen, three USB ports, HDMI and VGA video ports, and an Intel processor. Lenovo promises the battery is enough to last a full day of school. The Windows version of the X131e, using a 1.40GHz Intel Core i3-2367M Processor with 3MB cache, starts at $619.What did Lenovo do with the Windows key on the laptop? Changed it into a search key, naturally. Unlike the Samsung and Acer Chromebooks, which weren't variations on Windows machines, that means it still has a caps lock button.
Google got a big new ally in its Chrome OS push today: Lenovo, the No. 2 PC maker.Although Lenovo is a notable ally, it's only really a foot in the door for Google. Lenovo's new ThinkPad X131e Chromebook is only geared for schools. Presumably it could lead to greater things for Google if the device gets a good reception, but this shouldn't be confused with Lenovo pushing a mainstream device the way the two existing Chrome OS partners, Acer and Samsung, have done.It's not clear whether Lenovo has grander ambitions for Chrome OS, something that might cause alarm at Microsoft since it threatens both Windows and Office. Lenovo didn't respond to a request for comment on its plans but we'll update this story if it does.Other Chrome OS devices are in the works, judging by code names for hardware platforms surfacing in the software's source code and issue tracker. Francois Beaufort, who pores through those sources, said yesterday that Lenovo has been working on a Chrome OS device code-named Stout. He also said another device in the works, called Kiev, is a Chromebox from Acer. So far only Samsung has shipped a Chromebox, a standalone PC that lacks a Chromebook's built-in keyboard, mouse, and monitor.Related storiesAsus weighing Chrome versus AndroidThe Real Deal 193: Road Test - CES edition (podcast)Google shows off Chrome OS tablet ideas Chrome OS is a browser-based operating system; although it runs Linux under the covers, all the software people use are Web sites or Web apps. That means no Photoshop, Skype, iTunes, or Call of Duty, but it's fine for looking up recipes, connecting on Facebook, checking e-mail, and using Google Docs.Chrome OS is a natural fit for Google Apps -- a subscription service that grants access to a variety of browser-based Google services including Gmail, word processing, calendars, and presentations. It ordinarily costs $50 per user per year, but Google Apps for education customers is free -- a nice deal compared to Microsoft Office.The ThinkPad X131e is a rugged design that already was available with Windows. It'll be available starting February 26 for schools that bid for it.The laptop has an 11.6-inch, 1,366x768 LED antiglare screen, three USB ports, HDMI and VGA video ports, and an Intel processor. Lenovo promises the battery is enough to last a full day of school. The Windows version of the X131e, using a 1.40GHz Intel Core i3-2367M Processor with 3MB cache, starts at $619.What did Lenovo do with the Windows key on the laptop? Changed it into a search key, naturally. Unlike the Samsung and Acer Chromebooks, which weren't variations on Windows machines, that means it still has a caps lock button.
Apple, Facebook ruining rock, says Pumpkins' Corgan
Apple, Facebook ruining rock, says Pumpkins' Corgan
Billy Corgan is a tetrahedron who embraces rock. He also pisses on it.This is not my intellectual musing. This is the intellectual musing of Billy Corgan, in a fine and wide-ranging interview with the Antiquiet.Corgan is the most smashing of the Smashing Pumpkins. He has principles. He believes that bands like Deep Purple and Rainbow have more value than Radiohead (upon whose head he would happily piss). Radiohead is, for him, pompous.An even greater object of his urination, however, is the technological pincer movement symbolized by Apple and Facebook.In response to his interviewer's suggestion that the way technology now dominates music creates a deep shortsightedness among listeners, a deep obsession with what is merely new, Corgan fulminated.He said: I'm sorry, every system up until the last 10, 12 years... it kicked its own door in. They didn't need it lubricated first. The Clash kicked the f****** door in. Nirvana kicked their own door in. The Cure kicked their own door in. Whatever, pick your f****** movement. Kick in your own f****** door. You don't need a guy with a beard to put you over. Do it yourself.I am assuming the guy with the beard he was referring to wasn't God, but a friend of God's: Steve Jobs. Facebook, too, Corgan deems destructive.He said: Look, we're all insecure in our own ways, most of us. You've got a Facebook with a few hundred friends. If you do something truly radical, are you ready to withstand the 40 negative comments? Most people aren't. So they're getting peer pressured at levels they don't even realize. It's what you don't say. It's like the government spying on us. Right? Now it becomes about what we don't say. The same thing with culture. I'm just willing to say it, and deal with the 40 negative comments. Once upon a time, Corgan believes, rock was a truly revolutionary force. He offered a quote from Woody Guthrie: "This guitar is a f****** weapon. This guitar kills fascists."Now technology makes us anodyne."When music is so goddamned f****** iTunes friendly cuddly, it makes me want to f****** puke. It's not for everybody to be like that, but where is that voicing in the greater collective voices? Why don't we have that anymore?"His suggestion is that the Apple-Facebook cabal is making artists cower. Of Facebook, he said: "We're all being identified by a conceptual identity. Not a true identity, a conceptual identity."Perhaps one can see what he means. Perhaps, though, one has always had a conceptual, rather than a true, image of rock stars.Many will titter to bladder-pressure -- as do the nice people at Tuaw -- at the notion that the Pumpkins have a new album coming out, one that happens to be available on iTunes. But the truth is that technology has made music more disposable and therefore less important. The buffet is now so vast, so all-you-can eat, that it's hard to appreciate any of the dishes. Isn't it worth wondering why it is that the only bands that seem to sell out large venues these days all have a combined age that drifts beyond 250? iTunes screenshot by Chris Matyszczyk/CNET
Billy Corgan is a tetrahedron who embraces rock. He also pisses on it.This is not my intellectual musing. This is the intellectual musing of Billy Corgan, in a fine and wide-ranging interview with the Antiquiet.Corgan is the most smashing of the Smashing Pumpkins. He has principles. He believes that bands like Deep Purple and Rainbow have more value than Radiohead (upon whose head he would happily piss). Radiohead is, for him, pompous.An even greater object of his urination, however, is the technological pincer movement symbolized by Apple and Facebook.In response to his interviewer's suggestion that the way technology now dominates music creates a deep shortsightedness among listeners, a deep obsession with what is merely new, Corgan fulminated.He said: I'm sorry, every system up until the last 10, 12 years... it kicked its own door in. They didn't need it lubricated first. The Clash kicked the f****** door in. Nirvana kicked their own door in. The Cure kicked their own door in. Whatever, pick your f****** movement. Kick in your own f****** door. You don't need a guy with a beard to put you over. Do it yourself.I am assuming the guy with the beard he was referring to wasn't God, but a friend of God's: Steve Jobs. Facebook, too, Corgan deems destructive.He said: Look, we're all insecure in our own ways, most of us. You've got a Facebook with a few hundred friends. If you do something truly radical, are you ready to withstand the 40 negative comments? Most people aren't. So they're getting peer pressured at levels they don't even realize. It's what you don't say. It's like the government spying on us. Right? Now it becomes about what we don't say. The same thing with culture. I'm just willing to say it, and deal with the 40 negative comments. Once upon a time, Corgan believes, rock was a truly revolutionary force. He offered a quote from Woody Guthrie: "This guitar is a f****** weapon. This guitar kills fascists."Now technology makes us anodyne."When music is so goddamned f****** iTunes friendly cuddly, it makes me want to f****** puke. It's not for everybody to be like that, but where is that voicing in the greater collective voices? Why don't we have that anymore?"His suggestion is that the Apple-Facebook cabal is making artists cower. Of Facebook, he said: "We're all being identified by a conceptual identity. Not a true identity, a conceptual identity."Perhaps one can see what he means. Perhaps, though, one has always had a conceptual, rather than a true, image of rock stars.Many will titter to bladder-pressure -- as do the nice people at Tuaw -- at the notion that the Pumpkins have a new album coming out, one that happens to be available on iTunes. But the truth is that technology has made music more disposable and therefore less important. The buffet is now so vast, so all-you-can eat, that it's hard to appreciate any of the dishes. Isn't it worth wondering why it is that the only bands that seem to sell out large venues these days all have a combined age that drifts beyond 250? iTunes screenshot by Chris Matyszczyk/CNET
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