OAKLAND -- After a decade of legal wrangling and a week in front of a jury, lawyers accusing Apple of building a digital music monopoly still lack one key ingredient in their class action: a plaintiff.
U.S. District Judge Yvonne Gonzalez Rogers threw plaintiffs lawyers a curve ball Monday afternoon, rejecting their lone class representative because she did not purchase an iPod covered by the case. Plaintiffs will have until Tuesday to present another person who can represent the roughly 8 million iPod owners included in the class, plaintiffs lawyer Bonny Sweeney said. The consumer would then be questioned by Apple lawyers to ensure he or she belongs in the case.
Sweeney said in an interview that her team shouldn't have any trouble shuffling its lineup.
FILE - In this Aug. 4, 2005 file photo, Apple CEO Steve Jobs speaks during a launch event for Apple's music download service, iTunes, in Tokyo. A billion-dollar class-action lawsuit over Apple s iPod music players heads to trial in a California federal court Tuesday, Dec. 2, 2014, in an antitrust case where the legal wrangling has lasted far longer than the technology that sparked the complaint. (AP Photo/Shizuo Kambayashi, File) ( Shizuo Kambayashi )
"A lot of people have reached out to us in the last several days saying that they were interested in helping out and stepping forward as a plaintiff," she said in an interview. "We don't anticipate any problems."
The trouble for the plaintiffs arose shortly after the trial kicked off in Oakland federal court last week, when lawyers for Apple argued that the two lead plaintiffs were unqualified because they had not bought specific iPod models sold between 2006 and 2009, the period covered by the case. Plaintiffs withdrew one woman last week, pinning their case on just one class representative, Marianna Rosen of New Jersey.
Lawyers for Apple questioned whether Rosen belonged in the case either, arguing that the iPods she submitted for the case were actually ordered by her ex-husband's law firm. Although a class action cannot survive without a plaintiff, Apple lawyer William Isaacson insisted that he did not want to win in court on a technicality.
"We were not thrilled with this," he told Gonzalez Rogers. "We want to win this case on the merits, and we think we're going to."
Plaintiffs quickly got back down to work, aiming to persuade jurors that Apple orchestrated an illegal monopoly by limiting iPod downloads to the iTunes store.
Plaintiffs argue that Apple updated the iPod software solely to sideline competitors such as RealNetworks, which had developed a program called Harmony that let users download music outside the iTunes store. Lawyers for Apple insist that the upgrades were intended to boost security and deliver new features and note that iPod prices dropped during the class period. Although Apple has already changed its policies, it may have to cough up a hefty sum if jurors side with the class. Plaintiffs are seeking more than $350 million in damages, which can be tripled under antitrust law.
To lay the foundation for the award, plaintiffs expert Roger Noll of Stanford University took the stand. The decade-old case harks back to a time before music streaming sites like Spotify and Pandora were all the rage, when the iPod was at the height of its popularity. Under questioning from plaintiffs lawyer Bonny Sweeney, Noll testified that Apple's share of the MP3 market climbed precipitously after the iTunes store debuted, eventually reaching more than 80 percent when measured by sales.
"That's the event that caused them to have monopoly power, and that monopoly power continued to grow and was sustained," Noll said.
Meanwhile, the iPod's gross margin, a measure of how much profit companies extract from the goods they sell, reached about 35 percent, he added.
Once Apple solidified its hold on digital music, challengers were hard-pressed to compete, Noll said. Apple users were unlikely to ditch their iPods because they would have to relinquish their stashes of music in iTunes, Noll noted.
"That's the lock-in effect of the walled garden: Songs from the iTunes store only work on an iPod," he said.
Apple will present its case later this week.
The Associated Press contributed to this report. Contact Julia Love at 408-920-5536 or follow her at http://ift.tt/1lSWOiq.
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