Legal Issues

How Dumb Is This Apple iPod Antitrust Suit?

4 min read
This story originally appeared on Fortune Magazine

Bonney Sweeney, the antitrust attorney at Robbins Geller Rudman & Dowd who claims to represent the interests of 8 million aggrieved Apple customers, now represents nobody but a roomful of lawyers.

On Monday, Sweeney lost her last plaintiff, a resident of New Jersey named Marianna Rosen. It turns out the “supracompetitive” price Rosen claims to have paid in 1988 for an iPod (“greater than she would have paid, but for the antitrust violations alleged herein”) was charged to her law firm’s credit card.

Although U.S. District Judge Yvonne Gonzalez Rogers gave Sweeney until Tuesday to find a new plaintiff, the case may yet get tossed out on a technicality. That’s not what Apple — which should be able to win this one on the facts — says it wants.

It may be what Sweeney et al. deserve.

I hadn’t thought much about class action law before this case, so I appreciated the backgrounder Daniel Fisher filed last week. According to Fisher, who covers law and finance for Forbes, it can be a dirty business.

“Class-action lawyers,” he writes, “are a well-defined group of players who must establish a reputation for fighting hard in every case and racking up as much expenses on the defense side as they can, in order to induce companies to come to the settlement table. That’s where they make their money, and the convenient fiction that they are suing on behalf of consumers collapses as they get down to the real negotiations, which are over the fee they will be paid without any objections from their supposed opponents across the table.

“But for the whole process to work, they still need clients. And those clients must have a case. Defense lawyers have slowly but steadily woken up to the fact that those clients often come with baggage — Bill Lerach, the founder of the predecessor to Robbins Geller, went to jail for paying his clients to appear in securities class actions — and they are digging into their backgrounds to find out if they can even serve as plaintiffs. This must strike some plaintiff lawyers as strange, since everybody knows the “client” is just a vehicle for assembling a case that often is already loaded in their computer, ready to be filed. But it’s the law, and Judge Rogers may just decide that this long-running case has met an insuperable barrier.”

It would be a fitting end for a case that’s already been through more than its share of twists and turns.

It began in January 2005 when Rosen and two other plaintiffs accused Apple of illegally tying the iPod to the iTunes music store. See iThe Apple iTunes Anti-Trust Litigation.

According to CNET, their complaint had to be rewritten when a court ruled that what Apple had done — build a service that only played songs purchased on iTunes or ripped from a CD — was perfectly legal.

That’s when the litigants shifted their focus to a pair of Apple security updates — 7.0 and 7.4 — that barred competing music stores from syncing with iTunes. The claim is that the updates had no purpose but to protect Apple’s iTunes monopoly.

Apple ought to be able to knock that one out of the park. See iTunes Version History.

Meanwhile, Apple’s lawyers have managed to pick off all three of the original plaintiffs. Sweeney says there are plenty more where those three came from. We’ll hear about them on Wednesday.

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