May 6, 2021

Judge cues trial in iPod antitrust case

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sweeney-bonnieBy Marisa Kendall, The Recorder

SAN FRANCISCO — A federal judge has hit the play button on antitrust allegations targeting Apple Inc. iPods, sending the case toward trial after nearly 10 years of litigation.

Plaintiffs presented sufficient evidence to show certain iPod models only played music downloaded from the Apple iTunes store, creating a monopoly that allowed the company to overcharge customers, U.S. District Judge Yvonne Gonzalez Rogers of the Northern District of California ruled Friday. The judge denied Apple’s motion for summary judgment, and the case now proceeds toward a Nov. 17 trial date. Plaintiffs estimate damages at about $350 million.

In response, Apple has beefed up its defense team with a slew of Boies, Schiller & Flexner attorneys who entered appearances Monday. The team includes partner John Cove Jr. in the firm’s Oakland office, as well as partners William Isaacson and Karen Dunn from Washington, D.C..

They join Robert Mittelstaedt of Jones Day, who argued Apple’s motion for summary judgment in Oakland federal court in August.

Apple had tried to throw out the case by attacking the plaintiffs’ damages expert, arguing he presented no admissible evidence that Apple’s practices had an effect on the market.

“The linchpin, and Achilles’ heel, of Apple’s argument is the word ‘admissible.'” Gonzalez Rogers wrote.

There’s no reason why the testimony of Roger Noll, a Stanford University economics professor, is not admissible, she continued.

Apple had introduced two experts of its own to poke holes in Noll’s theories. The University of Chicago professors argued Noll failed to account for certain variables affecting iPod prices and used the wrong model to calculate damages.

But Gonzalez Rogers said “the battle between the economists” should play out before a jury, and denied Apple’s Daubert motion to exclude Noll’s testimony.

The iPod/iTunes litigation, led by plaintiffs lawyers with Robbins Geller Rudman & Dowd, began in 2005. U.S. District Judge James Ware, who retired in 2012, threw out two of the plaintiffs’ antitrust claims before Gonzalez Rogers took over. The one surviving claim alleges a 2006 Apple upgrade illegally shut out competitor RealNetworks Inc. from the MP3 market. RealNetworks had used its Harmony software to make its music compatible with iPods, but after the 2006 upgrade, the company’s music no longer played on Apple devices.

The upgrade locked customers with large music libraries into Apple products, plaintiffs argued, as customers who wanted new players had to continue buying iPods or lose their music.

Plaintiffs lawyers represent a certified class of customers who bought certain iPod models between 2006 and 2009.

Robbins Geller partner Bonny Sweeney said she has every reason to believe the case will go to trial in November.

“We’re delighted that we’re finally able to present the case to a jury,” she said.

Apple did not respond to an email seeking comment.

Gonzalez Rogers expressed concern during the August hearing that plaintiffs provided no testimony from customers who bought songs from RealNetworks and couldn’t play them on their iPods. But she changed her tune Friday.

“The lack of direct evidence of named individuals who used Harmony does not disprove their existence,” Gonzalez Rogers wrote. “The court finds nothing unreasonable about an assumption that, among the millions of persons who used iPods during the class period, some may have purchased songs from Real.”

IMAGE: Bonnie Sweeney, Robbins Geller partner

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