Class Certified to Sue Apple for Antitrust Violations

SAN FRANCISCO (CN) - A federal judge certified a class of consumers who claim Apple monopolized digital music and digital music players with their iTunes and iPod products between 2006 and 2009.

The amended complaint, which cites the Sherman Act as well as California's Clayton and Cartwright Acts, alleges that consumers paid too much for iPods as a result of Apple's anticompetitive conduct.

Specifically, iPod purchasers argued that Apple used iPod software and firmware updates to prevent consumers from playing music purchased from non-Apple sources on iPods.

"Apple deliberately makes Online Music purchased at the Music Store inoperable with its competitor's Digital Music Players," according to the amended complaint. "Apple deliberately makes the iPod unable to play music sold at rival Online Music stores."

As a result, Apple allegedly created monopolies in the digital music and portable digital music player markets and inflate the prices for iPods bought between fall of 2006 and spring of 2009.

Apple had hoped to limit the class to end-user consumers, excluding resellers, "on the ground that resellers are not situated similarly to end-users insofar as resellers benefit from higher retail prices."

U.S. District Judge James Ware rejected that maneuver last week, saying "plaintiffs have adequately demonstrated class-wide methods of proving impact and damages."

A 2009 order that found resellers would be properly included in the class also resolved the reseller issue, Ware added.

Apple also erred in claiming that resellers should be excluded because they "benefit from higher retail prices," according to the Nov. 22 ruling.

Ware defended this position by citing the 2008 opinion in Meijer v. Abbott Laboratories, which held that the price a retailer charges the end-user has no bearing whether a supplier has unlawfully overcharged the retailer.

Bonny Sweeney, Thomas Merrick, Alexandra Bernay and Carmen Medici of the San Diego firm Robbins Geller Rudman and Dowd are lead counsel representing the designated lead plaintiffs, Somtai Troy Charoensak, Mariana Rosen and Melanie Tucker.

Apple is represented by Robert Mittelstaedt, Craig Stewart and David Kiernan of Jones Day in San Francisco.

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