It seems that with success attracts lawsuits and huge success attracts antitrust lawsuits. Apple is currently facing a number of lawsuits, and one in particular has the potential to be on a similar scale to the federal antitrust battle that hammered Microsoft.
The charges leveled against Apple are very serious indeed.The lawsuit relates to the link between iTunes and the iPod and how one ties you to the other. Back in July of 2006 a class-action lawsuit was filed which alleged that was illegal, that it threatened competition, and, crucially, harmed consumers. The charges leveled against Apple are very serious indeed and refer to the Sherman Antitrust Act and the Cartwright Act. Apple had sought to have the lawsuit dismissed but last month US District Judge James Ware denied Apple's request and allowed the suit to proceed, claiming that "Apple has presented no reason for the Court to dismiss the Cartwright Act claim or the common law monopolization claim while allowing Plaintiff's federal antitrust claims."[poll id=61]
So just how dangerous could this be for Apple? Well, to begin with Apple is a super-secretive company and won't enjoy being at the focus of such intense scrutiny. On top of that, when you compare Apple's iPod/iTunes market share to that of Microsoft's in the OS market, it becomes clear that if you thought that Microsoft had a monopoly when it comes to Windows, Apple could be benefitting from one when it comes to iTunes and the iPod. 70% of flash-based media players and fully 90% of hard drive based players have the Apple logo on them, while iTunes commands a massive 83% of the online music market.
I have to be honest and say that I'm no fan of iTunes. In fact, I loathe it with a passion. I extend these feelings to the Zune Marketplace and all other online services which make use of restrictive and complex DRM (I do buy a lot of content from Audible.com but in all the years I've been using that service I've never had a bad experience with the DRM, it's always been transparent). Too many people are suckered into buying DRM-loaded media without knowing what the possible consequences are, and with iTunes you have the added hurdle of being locked into Apple hardware too (and don't try selling to me Apple's "Get out of jail free card" and say that you can always take the music to CD and then rip that - that's a cumbersome, time consuming process that few people can be bothered to undertake). Over the 2006 holiday period the iTunes site saw a massive 413% increase in traffic over the same period in 2005. How many of these people really knew what they were buying into?
I'm no fan of lawsuits either, but since launching the iTunes service Apple hasn't taken any steps to free up the service at all, instead it's been busy working out better and more effective ways to lock users into the iPod/iTunes ecosystem, even by going as far as crippling the iPod's support for WMA media files. Aggrieved consumers are left with few options other than to turn to the law.
Would a federal monopoly suit against Apple be good for consumers? What would it mean for the iPod and iTunes? Could opening up iTunes to other media players be a good thing for Apple in the long run?