View this article at: http://www.ipodnn.com/articles/08/01/04/lawsuit.apple.is.monopoly/
Friday, Jan 04, 2008 9:40am
Lawsuit: Apple has become a monopoly
Apple has become a monopoly, a recent lawsuit against the company alleges. The case was filed by one Stacie Somers, who says that the company's dominance in media players, and online music and video, violates the Sherman Antitrust Act; specifically, the Somers complaint revolves around Windows Media Audio, which is notably unsupported by both the iPod and iTunes, despite the fact that it is one of the most common music formats for sale, and it is said that Apple could easily afford a license from Microsoft. Somers estiamtes the maximum cost of a license at $800,000. Some vendors of WMA tracks include Best Buy, Yahoo, Napster and Virgin Digital.

This creates a problem, Somers says, because record labels are "generally unwilling" to publish their music without DRM restrictions, such as those imposed on most AAC and WMA files. Many people may thus have music collections that are suddenly incompatible if they decide to switch to Apple products.

The suit further alleges that while iPods have the hardware to play WMA files, Apple has installed "crippleware" to prevent every other protected format from working except for Apple's FairPlay. Moreover, Apple is said to be overcharging based on memory capacity -- the wholesale price difference between 1GB and 4GB of flash is estimated to be $5.52, but a Nano with 4GB costs a full $100 more than the now-defunct 1GB size.

Statistics in the suit suggest that Apple controls 75 percent of online video, 83 percent of online music, and over 90 percent of the hard-drive based media player market. Somers' attorneys are working to get the case upgraded to a class action.