Business News

Apple Wins IPod Antitrust Case, Avoids $1 Billion Liability

A federal jury sided with Apple on Tuesday by ruling that the company did not violate antitrust laws by blocking music downloaded from rival companies from playing on consumers’ iPods. The unanimous decision brought an end to a decade-long class action lawsuit that could have cost the giant up to $1 billion.

The lawsuit claimed Apple violated federal and state law by issuing a software update in 2006 for the iPod that prevented the device from playing music that was not purchased on iTunes. The lawsuit claimed this update forced consumers to stay within Apple’s ecosystem, which allowed the company to increase prices for future iPod devices due to a lack of competition, according to the Los Angeles Times.

Attorneys for Apple argued the software update improved the iPod and had no impact on prices. After three hours of deliberation, eight jurors unanimously agreed that the update was a “genuine product improvement.”

[quote text_size=”small” author=”– Kristin Huguet” author_title=”Apple spokesman”]

We thank the jury for their service and we applaud their verdict.

[/quote]

The class-action lawsuit claimed that Apple’s software deleted songs purchased by rivals between 2006 and 2009. Devices owned by an estimated 8 million customers were at issue in the case. The plaintiffs were seeking $350 million in damages, which could have been tripled under antitrust laws, according to the Wall Street Journal.

According to Apple’s attorneys, this was a rare case as a jury had to decide if the product was an improvement over prior versions, a decision usually made by a judge.

The trial included a never-before-seen video of Steve Jobs, Apple co-founder, from a deposition in 2011, just six months before he died. Jobs said that Apple was afraid of iTunes hackers and it needed to improve its security features to appease record labels that were concerned about privacy, according to ABC News.

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