Apple Finds Monopoly Class-Action Charges Not a Game

On behalf of all Florida residents, Frederick Black recently filed charges against media mogul Apple, Inc for monopolizing the digital video and music industry. The three formal counts charged against the organization include violation of Florida Deceptive and Unfair Trade Practice Act, attempted monopolization in violation of the Florida Antitrust Act, and monopolization in violation of the Florida Antitrust Act. While the media has focused mainly on the company's recent release of the much lauded iPhone and unprecedented stock growth, this suit serves as a bitter reality check.

Three hotels on boardwalk?

The 19-page suit, which could change the company's business practices, at least in Florida, claims Apple is "in possession of monopoly power in the portable digital media player market, the online music market, and the online video market and has the power to control prices in these respective markets and has been able to exclude competition from these respective markets. Through its tying practices, Apple has conducted itself through unfair methods of competition, anticompetitive conduct, unconscionable acts or practices, and unfair or deceptive acts or practices in conduct of trade or commerce." (Source: AppleInsider.com)

Black brought these charges due to restrictions that prevent consumers from playing non-iTunes media on their iPods.  This inhibits the transfer of music downloaded from iTunes to other digital media players, a fact that's not-so-cool with many digital media consumers. Media bought from iTunes comes protected by a copy protection layer called Fairplay, and although Apple does offer DRM-free tracks, they can only be obtained from iTunes Plus. Black claims that Apple could sell licenses to other companies but refrains, controlling prices and excluding competition. An alternate solution, he suggested, could be the establishment of an unspecified, industry-wide copy protection guideline. (Source: MacNN.com)

Originally submitted in August, the case was moved to a U.S. District Court for the Southern District of California at the request of Apple. In addition to $15,000, Black is seeking court costs, attorney fees, and any additional award the court finds suitable. He is requesting a trial by jury.

Competing digital media manufacturers are wondering if the court ruling will change the digital media industry in their favor.