Jobs ordered to testify in FairPlay antitrust case

Apple's CEO will be called to testify in a deposition over an antitrust suit filed in 2005 over Apple's use of DRM software to prevent music from other companies from playing in the iPod.

Apple CEO Steve Jobs was ordered by a judge yesterday to answer questions in a deposition related to an antitrust suit filed against the company in 2005 over its FairPlay DRM software.

Apple CEO Steve Jobs Stephen Shankland/CNET

Attorneys for Apple had argued that Jobs' testimony in this case would be repetitive of what has already been offered as part of the ongoing lawsuit. But presiding over the case known as the Apple iPod iTunes Antitrust Litigation, U.S. Magistrate Judge Howard Lloyd ruled yesterday that this alone was not sufficient to preclude Jobs from testifying.

The case, filed in the U.S. District Court for the Northern District of California, San Jose Division, revolves around Apple's past use of FairPlay to encode its digital music files. Such encoding ensured that songs bought through iTunes would play only on iPods and not other music players and that songs bought through other digital music stores would not play on an iPod.

Claiming it was the music companies and not Apple that wanted the digital rights management, Jobs eventually got rid of FairPlay in early 2009, paving the way for DRM-free music through iTunes.

But the use of the software found Apple the target of a lawsuit launched in 2005 from a group of iPod and music buyers who claimed that the company's use of FairPlay allowed it to maintain a monopoly over both digital audio players and music downloads.

As one example, RealNetworks had challenged Apple in July 2004 by releasing software called Harmony, which was designed to crack through the DRM and allow its own digital music files to play on the iPod.

In its strong response a few days later, Apple threatened to block access to RealNetworks' digital music files the next time the iPod software was updated. Apple eventually followed through on that threat by updating the iPod in October and rendering RealNetworks' content unplayable.

Though Lloyd has ordered Jobs to testify in the deposition, he did find in favor of Apple on certain motions. The plaintiffs argued that Jobs should be required to answer questions about Apple's initial decision to implement FairPlay and its refusal to license FairPlay to other companies. But the judge rejected both of those arguments.

As a result, Jobs' deposition will be limited to two hours during which he'll be asked questions only related to RealNetworks' launch of Harmony in 2004, Apple's response to Harmony, and Apple's iPod update later that year.

An Apple spokeswoman told CNET that the company would decline any response to the lawsuit and Jobs' testimony because the litigation is pending.

In another matter related to Jobs, the Los Angeles Times is reporting that an investment advisory firm has raised questions over whether the Apple CEO should continue to serve on the board of directors for Walt Disney.

Citing his absences from board meetings the past few years, Institutional Shareholder Services acknowledged that Jobs' ongoing medical condition could certainly excuse him from frequent participation. But the group felt that shareholders are entitled to greater disclosure and a full explanation were he to be renominated to the board. Disclosure of Jobs' medical ailments has been a issue that has dogged Apple as well over the years.

The AFL-CIO, which owns about 3.8 million shares of Disney, already voted against Jobs returning to Disney's board, the L.A. Times added.

 

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