Apple wins lawsuit over iPod pricing

Associated Press

OAKLAND, Calif.

A federal jury decided Tuesday that Apple didn’t compete unfairly when it sold music players and songs with copy-protection software that was incompatible with rival devices and music from competing online stores.

The eight-member jury in U.S. District Court handed Apple a victory by rejecting a claim from attorneys for consumers and iPod resellers, who were seeking as much as $1 billion in a class-action lawsuit. The plaintiffs argued that Apple was able to overcharge consumers for iPods by making it difficult to switch to a rival music player, as music bought from Apple’s iTunes store wouldn’t work on other players, nor would music from other stores work on iPods.

After just three hours of deliberation, the jury accepted Apple’s argument that the software provided necessary security protection and was part of a larger package of improvements that made iPods and iTunes popular with consumers.

Apple applauded the verdict: “We created iPod and iTunes to give our customers the world’s best way to listen to music. Every time we’ve updated those products — and every Apple product over the years — we’ve done it to make the user experience even better.”

Apple no longer uses the copy-protection software in question, so the ruling has no effect on the company’s current practices.

The case, originally filed in 2005, covers an estimated 8 million consumers who purchased iPods from 2006 to 2009, when the software still was in place.

The plaintiffs argued that the software locked people into using iPods and allowed Apple to overcharge for the devices. Plaintiffs were seeking $350 million in damages, which could have been tripled if the jury found Apple violated antitrust laws.

Attorneys for the plaintiffs said they plan to appeal.