Steve Jobs to Testify Over iTunes Update Motivation

     SAN JOSE, Calif. (CN) – Apple co-founder and CEO Steve Jobs must undergo two hours of deposition by consumers behind an antitrust class action over the iPod.

     The consolidated complaint, originally filed in 2005, concerns an anti-piracy practice that Apple employed to encode digital music files with FairPlay, its proprietary digital rights management software.
     “FairPlay only allowed digital music files purchased from the iTunes Store to be played directly on iPods; the files could not be played directly on digital music players made by other manufacturers,” U.S. District Judge Howard Lloyd summarized in a ruling Monday. “FairPlay also prevented digital music files sold at other companies’ online music stores from being played on iPods. In sum, because of FairPlay, customers of the iTunes Store needed an iPod to directly play digital music files they downloaded from the iTunes Store, and owners of an iPod could not buy digital music files from other online music stores and play them on their iPods.”
     Though Apple claims it had pure intentions, the class accuses the company of using software updates to exclude competition and maintain dual monopolies in the markets for portable digital media players and digital audio downloads.
     “This is important because a threshold liability issue is whether the software updates were product improvements or not,” Lloyd wrote. “If they were improvements, plaintiffs’ claim will fail.”
     The class wants to depose Jobs over his knowledge about an apparently anticompetitive decision on which their cases hinges.
     In July 2004, an Apple competitor, RealNetworks, announced that songs bought from its online store could be played on iPods because it had created software called Harmony that would work with the Apple device.
     “Shortly after Apple learned of this, it issued its own announcement stating that when it updates its iPod and FairPlay software, it would be highly unlikely that digital music files purchased from RealNetworks’s online store would continue to be playable on iPods,” Lloyd wrote. “Indeed, when Apple’s updates to the software were released in October 2004 and users were forced to update their iTunes applications and iPods, the digital music files from RealNetworks’s online store were no longer interoperable with Apple’s iPods.”
     Though the class argues that Jobs has unique firsthand information about the events in question, Lloyd found that the possible antitrust evidence is not relevant since another judge dismissed the class’s antitrust claims. That judge also ruled that ruled Apple was legally entitled to use its own proprietary management software and to limit its licensing.
     Jobs can be questioned only about Apple’s decisions related to RealNetworks’ Harmony technology, Lloyd. The two-hour “deposition shall be limited to the topics of (a) the July 26, 2004 RealNetworks Announcement, (b) the July 29, 2004 Apple Announcement in response thereto, and (c) Apple’s software updates in October 2004 that rendered the RealNetworks’s digital music files once again inoperable with iPods.”

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