Jury Says Apple DRM Not An Antitrust Violation

from the which-is-probably-right dept

We've written a few times about the long-standing class action lawsuit against Apple over whether its DRM efforts, designed to block out RealNetworks' attempt to reverse engineer a way into the iPod, violated antitrust law. As we noted recently, despite the case going on for years, the class action lawyers who brought the lawsuit ran into a bit of a stumbling block recently when it came out that none of the named plaintiffs were actually in the class, having purchased iPods outside the window which the class covered. The judge let the lawyers find a new plaintiff just a few days ago, but it certainly looks like the rotating plaintiffs issue may have helped Apple. The jury wasted little time in siding with Apple and saying that there was no antitrust violation. Apple's lawyers played up the plaintiff problem:

“There’s not one piece of evidence of a single individual who lost a single song, not even a complaint about it,” said William Isaacson, Apple’s lead lawyer in the case. “This is all made up at this point.”

There was a lot of interesting side notes to this case, but the failure of the class action lawyers to have an actual plaintiff was a pretty big deal -- and basically made it clear that these lawyers were just in this for the money, rather than to right some sort of wrong.

And, while I'm generally interested in the idea that DRM could potentially be seen as anti-competitive, the fact that this case was about iTunes and RealNetworks kind of highlights how infrequently antitrust law makes sense in the tech industry. The entire digital music ecosystem has changed dramatically since the case began. While iTunes is certainly still a big player, it's facing serious competition on a variety of different fronts including from streaming services like Spotify (one reason why Apple purchased Beats Music). Competition comes in all different ways, and even if you're dominant today, it doesn't mean you'll be dominant very long.

Filed Under: antitrust, class action lawsuits, drm, innovation, ipods, technology
Companies: apple

Angus Proposes iPod Tax... Balanced With Greater Fair Dealing Protections

from the is-it-a-trade-worth-making? dept

As was expected, Canadian MP Charlie Angus has introduced a bill that would expand Canada's "you must be a criminal" blank media tax (they prefer "levy," but it's a tax) to iPods and other media players. However, to "balance" that out, he's also proposing a change to copyright law that would make Canada's "fair dealing" laws more flexible. Expanding fair dealing is definitely a necessary and important move, but it seems unfortunate that it appears to be coupled with this idea of taxing people just because they might make use of unauthorized content.

Filed Under: canada, charlie angus, copyright, fair dealing, ipod levy, ipods, tax

Surprising: Charlie Angus Proposing iPod 'You Must Be A Criminal' Tax In Canada

from the why? dept

Every few months or so we hear about proposals in Canada to extend Canada's blank media tax (they prefer "levy") to MP3 players, such as iPods. The Canadian Private Copying Collective has tried to do this multiple times and had the courts strike it down multiple times. These levies make little sense. They massively increase the price of certain products (studies have seen 90% of the cost of blank CDs going to the levy) and, despite claims to the contrary, the money collected really doesn't help many musicians. Hell, even the recording industry isn't a huge fan of the idea, because it's afraid such a levy will get people thinking that file sharing any music is now "legal."

So, it's a bit of a surprise to see that Canadian Member of Parliament, Charlie Angus, who's generally considered one of the sharper folks on copyright issues, is now putting forth legislation for a Canadian "you must be a criminal" tax on MP3 players. The article suggests that it won't get very far, and Angus doesn't seem to be explaining why he's putting this forward, but it is odd. The idea of such a tax is incredibly unpopular with Canadians, and you would think that Angus, of all people, would recognize that.

Filed Under: canada, charlie angus, copyright, ipod levy, ipods, tax

Court Dumps Class Action Lawsuit Saying Apple iPod Responsible For Hearing Loss

from the what-did-the-judge-say?--speak-up! dept

A few years back, someone sued Apple, claiming that the iPod caused hearing loss, saying that the devices have an "inherently defective design" and that they need more warnings that you can acquire hearing loss if high volumes are used. The lawsuit eventually turned into a class action, which a district court dismissed. Now an appeals court has agreed, saying that the plaintiffs showed no evidence that an iPod "poses an unreasonable risk of noise-induced hearing loss." Basically, the argument amounted to "you know, Apple could make iPods that are less likely to lead to hearing loss." But that's not legally actionable, and it's good that the courts were quick to point that out.

Filed Under: class action, hearing loss, ipods, sound
Companies: apple

Canadian Copyright Levy Group Wants New iPod Tax... But It's Not Really For The Artists

from the doing-the-math dept

Last week, a few folks submitted the news that the Canadian Private Copying Collective, who collects a tax (levy) on every blank CD sold in Canada is now, once again, pushing for a tax on every iPod sold. They try to do this pretty much every year. A few years ago, Canadian courts struck down an attempt to do so. Then there was another try which, again, was struck down with the court pointing out that they'd covered this in the past.

But they're back at it again. And it's really no wonder. Already the cost of a blank CD in Canada has an astounding 90% of the price go to this levy. But what happens to all that money? Well, the CPCC claims that it needs this levy to sustain the livelihood of artists. That's also its reasoning for extending it to iPods. But, Howard Knopf dug into the numbers a bit and notes how laughable that claim is. First, CPCC claims that its brought in over $150 million from the blank CD levy, and handed it out to 97,000 rights holders "most of whom would not be able to continue their careers without this revenue."

That's quite a claim, isn't it? But if you just do the most basic division, you'll find that it makes no sense at all. At $150 million over ten years for 97,000 rights holders, you're talking about $160 per year on average. And, of course, the truth is that it's significantly less for most, and much bigger for a very small number. I think it's safe to conclude that "most" of the 97,000 rightsholders aren't relying on CPCC money for any kind of career. Oh, but you know who did get a lot of money to play with? CPCC. Knopf notes that:

About $22 million has gone to the costs of pursuing Copyright Board tariffs (lawyers, consultants, surveys, etc.), collection and enforcement (e.g. lawyers and auditors), and other causes such as "communications and government relations - $1,272,000." And that's only the end of 2007.

But it's all about the artists, right?

Filed Under: canada, copyright, ipods, levy
Companies: cpcc

Gag Order Clause Comes Back To Bite Apple In 'Exploding' iPod Case

from the ah-the-legalese dept

We've been getting a bunch of submissions from people about a Times Online story concerning Apple's supposed attempt at "gagging" someone who had their iPod explode. The company agreed to give a replacement, but the terms of the deal made them agree never to talk about it. While this may seem draconian, I'm going to give Apple the benefit of the doubt here: this is pretty standard legal language on such things. I had a laptop whose hard drive died 5 times in six months a few years back, and when the manufacturer finally agreed to replace the laptop (after multiple escalations of the issue), it had a nearly identical clause. But, it was pretty straightforward. Before faxing the agreement back to the company, I just crossed out the clause that said I was barred from ever talking about it, and the guy from the company called me immediately and said: "I see you crossed it out -- our lawyers won't like it, but that's fine, I just want to get you a new machine." Who knows if Apple would be so accommodating, but I think this story is blown a bit out of proportion. This kind of language is standard legalese, rather than some nefarious attempt by Apple to shut up those who have had their iPods explode. Still, the fact that this clause is suddenly generating press attention should put corporate lawyers on warning. These standard clauses are PR nightmares waiting to happen. Take them out of such "replacement" agreements, or be ready to see a similar story appear in the press soon...

Filed Under: gag order, ipods, replacements
Companies: apple

Canadian Copyright Expert On Levy Proposals: Today's Quickie Legislative Solutions Are Tomorrow's Absurdities

from the $2500-iPod dept

Howard Knopf, a well known Canadian copyright expert, recently took a look at some of the failed copyright levy proposals in Canada. The Canadian Private Copying Collective (CPCC) administers the tax levy on blank CDs, which now accounts for almost 90% of the price. In 2002, similar proposals to extend the levy to DVDs and digital audio players were shot down. It's a good thing they were! Knopf notes that the $2.27 levy proposed in 2002 is now about 10 times the retail price of a blank DVD, and the $21/GB levy proposed for digital audio players would have left a 120 GB iPod (<$300 CAD) with a $2520 tax. You might think the CPCC would have decreased the levies over time, but the blank CD levy was just increased this past December (blank CDs cost more in Canada than blank DVDs). Even if the levies were lowered, it would be because they had already become unbearable. Imagine the bureaucracy and battles at the Copyright Board, and imagine the effect on Canadian consumers, tech companies in the meantime (what if the Blackberry was classified as a digital audio device?).

The point is that these quick solutions aren't solutions at all. Setting up "you're a criminal" taxes to collect money for companies that can't figure out how to adjust their business models is bound to block innovative new technologies, and you can't predict what technologies will drive new business models. As Knopf puts it, "all of this shows that today's quickie proposed legislative solutions and oft inflated tariff proposals to deal with supposedly serious crises arising from copyright and new technology are potentially tomorrows' absurdities or even nightmares."

Filed Under: canada, copyright, ipods, levy

Latest iPod Suggests that Apple Still Loves DMCA-Assisted Lock-in

from the all-about-control dept

Back in January, we noted that despite Steve Jobs's posturing on the music DRM front, Apple remains a big supporter and user of DRM and DRM-like schemes throughout their product lines. Over at the EFF blog, Fred von Lohmann suggests another potential example. The new iPod Shuffle has no buttons; the controls are on the included headphones. And if these folks are right (and there seem to be some doubts), the new shuffles won't work with the remote controls of any existing third-party headphones because the iPod looks for a special "authentication chip" that so far is only embedded in the headphones Apple bundles with the shuffle. This would be irritating to me personally because I hate earbuds and so if I bought a shuffle the first thing I'd want to do is swap out the Apple-supplied earbuds with third-party headphones.

Fred suggests that the purpose of this "authentication chip" is to trigger liability under the DMCA if anyone tries to reverse-engineer the chip. That's possible, but it's far from clear that that's what's going on. We don't know exactly what the chip does, but it seems unlikely that they'd embed enough computing power in the chip to do real crypto. And if there's no crypto, it becomes harder—although certainly not impossible—to invoke the DMCA's anti-circumvention provisions. Unfortunately, there's so little case law on the DMCA's anti-circumvention rules that we don't really know how it would apply in a case like this. And that uncertainty may be all Apple needs to discourage third parties from building unauthorized accessories. b>Update: It looks like we were right to be skeptical about the DRM angle. Fred updates to point to a Boing Boing report that there's no authentication in the new headphones. Which means that a DMCA claim probably wouldn't apply to third-party headphone makers.

Filed Under: dmca, drm, ipods
Companies: apple

In Some Relatively Rare Cases, iPod Headphones May Have Some Impact On Pacemakers

from the struck-by-lightning-twice dept

There have been numerous studies done over the impact various portable electronics devices have on pacemakers, and they often make headlines blown way out of proportion compared to the actual issue. A year and a half ago, for example, we wrote about a report that found that iPods could interfere with pacemakers under some very specific (and somewhat unlikely) circumstances. And now there's a new study making the rounds about how iPod headphones could, maybe interfere with pacemakers, again in some very specific circumstances. As the folks behind the report note, it's so minor that it's not worth causing a big stir about it, but when the headphones are very close to the device, the magnets in them may impact how the device runs. It was a pretty small sample size, but in experiments it happened in 4 out of 27 tests with pacemakers. Slightly more troubling is in cases with defibrillators, where the headphones got in the way 10 out of 33 times. Though, with the pacemakers, it didn't sound as if the interference was all that serious in most cases, and with defibrillators, it seems likely that technicians are likely to notice and remove iPod headphones from getting in the way. While it's good to be aware of the potential for interference, but the actual risk of danger seems pretty minor.

Filed Under: ipods, pacemakers