iTunes Monopoly? Apple’s Jobs Ordered by Judge to Answer Anti-Competition Charges
Apple Inc. Chief Executive Steve Jobs, who is out on medical leave, has been ordered by a federal magistrate to answer questions from plaintiffs’ lawyers in an antitrust lawsuit related to his company’s iTunes business.
U.S. Magistrate Judge Howard Lloyd, based in San Jose, California, ruled that lawyers representing the plaintiffs in the suit may question Jobs for a total of two hours. He issued the ruling on Monday.
Apple could appeal the ruling to a district judge, but it would likely have to make a case that the magistrate “made a big mistake,” said Professor David Levine at University of California Hastings College of the Law.
An Apple spokeswoman declined to comment, and attorneys for the plaintiffs did not respond to requests for comment.
In the class-action lawsuit, a group of consumers say Apple created a music-downloading monopoly with its iPod player and iTunes store. At issue is a piece of software called Fairplay that allowed only music bought on iTunes to be played on the iPod, according to the complaint.
One competitor, RealNetworks Inc, responded in 2004 by introducing a new technology that would allow customers to play music downloaded from its site on their iPods. Apple quickly announced a software upgrade to iTunes that once more blocked music from RealNetworks, the complaint charges.
“The court finds that Jobs has unique, non-repetitive, first hand knowledge about Apple’s software updates in October 2004 that rendered the RealNetworks’s digital music files once again inoperable with iPods,” Lloyd wrote in his ruling.
The ruling comes amid intense questions about Jobs’ health and whereabouts. Earlier this month an energetic but thin Jobs resurfaced to unveil Apple’s new iPad. His appearance helped reassure investors and fans worried about what his absence might mean for the company.
Apple failed to provide specific examples of how a deposition of Jobs would constitute “undue hardship,” the plaintiffs wrote in a court filing last December.
Lloyd said the deposition of Jobs would be limited to questions about the back-and-forth with RealNetworks in 2004. Apple had sought to prevent the deposition altogether, while the plaintiffs asked to be allowed a broader inquiry.
“By limiting the scope of the deposition, the judge is trying to avoid using this as some sort of tool for embarrassment or annoyance,” Levine said.
Should a district judge uphold Lloyd’s ruling, Levine said it would be extremely difficult for either side to appeal further.
The case is in re Apple iPod iTunes antitrust litigation, Case No. 05-00037, U.S. District Court, Northern District of California.
Apple is involved in a host of other lawsuits, both as a plaintiff and defendant, ranging from disputes over patents to antitrust allegations. On Monday, Apple sued Amazon.com Inc in a bid to stop the online retailer from improperly using its APP STORE trademark, according to a court filing.