Apple Settlement Near in iPod, iTunes Antitrust Class Action

Several news sources are reporting that Apple will be entering settlement talks next week to resolve a class action lawsuit accusing the company of monopolizing digital music and portable digital music players between 2006 and 2009 with its iTunes and iPod products.

U.S. District Judge James Ware asked both sides to prepare briefs “focusing on the issue of class damages” in preparation for a settlement conference set May 1.

According to the amended class action lawsuit filed in 2007, Apple used iPod software and firmware updates to prevent consumers from playing music purchased from non-Apple sources on iPods. The lawsuit alleges this anticompetitive conduct caused consumers to overpay for iPods, in violation of the Sherman Act and California’s Clayton and Cartwright Acts.

Judge Ware certified a Class of resellers and consumers late last year who were ripped off by the alleged monopoly. The Class is seeking damages, penalties and other monetary relief, including treble damages.

Notices of the Apple iPod iTunes Antitrust Class Action Lawsuit Settlement are expected to be distributed May 8.

The case is In re: The Apple iPod iTunes Antitrust Litigation, Case No. 5-cv-00037-JW, U.S. District Court, Northern District of California, San Jose Division.

UPDATE: On Dec. 16, 2014, a jury handed down a verdict in favor of Apple in the iTunes antitrust trial, finding that the software upgrade was a genuine product improvement and was not intended to stifle competition.