Apple Incs ex-CEO Steve Jobs renovated the way people enjoyed music with the iPod, but now the deceased co-founder of Apple is being accused of leading the company into a violation of antitrust laws.
Mr. Jobs has allegedly upgraded the software of the iPods, so the device would not be capable of playing songs from other music stores different from Apples. The lawsuit is looking for $350 million in total damages for consumers and re-sellers, who claim be to overcharged for the iPod devices. Should Apple lose the case, the damages could be increased by three times in line with the federal antitrust law.
The Apple iPod iTunes Antitrust Litigation case began on Tuesday in Oakland, California, in front of U.S. District Judge Yvonne Gonzalez Rogers and an eight-member jury.
Bonny Sweeney, attorney for the consumers, opened up with the statement that Mr. Jobs and other high-ranked executives released an update for the iPod to make sure that the device works only with Apple-downloaded songs, after they found out that a rival company has developed a software that allows the music player to operate with songs bought from different stores.
“We will put on evidence that shows these software updates were not genuine updates,” said Bonny Sweeney in an interview before the trial, cited by the Wall Street journal “Apple implemented these changes for the purpose of blocking competition.”
The trial takes us back in time to 2005, when the lawsuit was first filed, the iPod has just been released and Apple controlled the majority of the digital music market, with its 22 million iPod sales.
The accusations were made on the behalf of 8 million consumers and 500 businesses who purchased iPods between 2006 and 2009, claiming they have been overcharged by 7.5% and 2.3%, respectively.
Apple described the presented theory as “implausible,” and explained that customers were in no way forced into purchasing iPods.
Elaborating that the software releases were aimed at improving security, and while they blocked software like Harmony by RealNetworks, they we legal due to the enhancement they provided for the iPods.
The trial is projected to continue around two weeks.
Apple Inc fell 3.25% on Monday and an additional 0.38% on Tuesday to close at $114.63, marking a one-year increase of 45.57%. The company is valued at $674.87 billion. According to CNN Money, the 45 analysts offering 12-month price forecasts for Apple Inc have a median target of $120.00, with a high estimate of $150.00 and a low estimate of $60.00. The median estimate represents a 4.68% increase from the last price of $114.63.
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