updated 12:20 pm EDT, Sat September 8, 2007
iPods reinforce suit
A series of lawyers are claiming that the introduction of Apple's new iPods on September 5th reinforce antitrust claims against the company, partially because the new devices, like their predecessors, cannot playback Microsoft's competing Windows Media Audio, or WMA, format. The suit alleges that Apple's devices are capable of playing these files, but disables them with "crippleware" in order to force iPod and nano owners to buy songs from iTunes. Wired reports that Apple could license the WMA format from Microsoft for less than 2 cents per iPod, lawyers say, "which would make iPods and iPhones, old and new, compatible with music purchased online from rivals like Wal-Mart, Napster, Best Buy, Yahoo and others."
Apple, meanwhile, claims that working with competitors could actually lead to another antitrust mechanism: collusion. "Forcing Apple to deal with rivals may lessen the incentive for Apple or rivals to innovate and invest in economically beneficial facilities," Apple wrote in court briefs. "It would require antitrust courts to act as central planners, identifying the proper price, quantity and other terms of dealing -- a role for which they are ill-suited."