Jurors were presented last week with two images of Steve Jobs - one deriding competitors as hackers, the other failing to recall those details - as they consider evidence about whether Apple Inc. broke the law by refusing to open the iPod to rival music downloads.
A federal jury in Oakland, California, on Friday saw a thin, pale and graying Jobs say in testimony videotaped six months before his death that he didn’t recall drafting a press release in 2004 likening RealNetworks Inc. to a hacker after it released a software program for buying songs that would run on the iPod.
That contrasts with e-mails shown to jurors from the same year in which Apple’s co-founder and chief executive officer demanded a correction from a music studio over its support of RealNetworks, celebrated Apple’s dominance in digital music and looked askance at a manager’s suggestion that the iPod be opened up to songs from providers other than iTunes.
Lawyers for consumers, who are seeking more than $1 billion in damages, spent much of the first week of trial trying to make the case that Jobs spearheaded the company’s effort to thwart competition to the iPod and maintain a monopoly.
The consumers claim Apple modified iTunes software so music downloaded with RealNetworks software couldn’t be played. Locking iPod owners into iTunes stifled competition for downloading services and enabled Apple to charge more for iPods, they claim.
Apple Executives
Senior Apple executives who were called as witnesses said the company’s technological tweaks to the iPod were genuine product improvements rather than intentional obstacles to competing software.
Along the way, Apple’s attorneys alleged a flaw in the lawsuit that the judge in the trial said is serious enough that she invited the company’s attorneys to argue for dismissal of the case. The attorneys said they discovered that one of the two consumers leading the class-action case on behalf of eight million iPod buyers didn’t buy her device within the time period covered by the lawsuit. A hearing on how to proceed with the case is scheduled for Dec. 8.
Jobs gave his testimony in April 2011, half a year before he died of pancreatic cancer, and during about 30 minutes of clips that were presented yesterday, he said more than 30 times he couldn’t remember or recall details from the 2004 period.
Rubbing half-closed eyes, Jobs said he didn’t remember whether Apple ever concluded that RealNetworks was violating its digital rights management software for iTunes and later said he didn’t recall whether he rebuffed a request to meet with RealNetworks to talk about a license.
‘I’m Sorry’
“I’m sorry I don’t remember more of this for you, but there’s been a lot of water under that bridge in seven years,” Jobs said.
What he had said in 2004 when the RealNetworks controversy was fresh was preserved in e-mails that were trickled out to the jury during the week.
“A reactive statement isn’t good enough for us,” Jobs said in a 2004 e-mail responding to a Universal Music Group Inc. executive’s public statement applauding the service provided by RealNetworks. “We want a press release from Universal correcting this terrible statement,” he said, adding “we are mighty upset.”
Apple should take advantage of the popularity of iTunes as other companies entered the market using different technological standards, he said in another message.
‘Balkanised World’
“In this balkanised world, the safest bet is the largest, most successful standard, and today we’re it,” Jobs wrote in an e-mail to an Apple executive in January 2004. The standard he was referring to was Apple’s digital music codex.
“Let’s leverage this position now!!!!” he said.
In a third e-mail, Jobs balked at the suggestion of his his senior vice president of product marketing, Phillip Schiller, to make the iPod compatible with other music players, not just Apple’s iTunes.
“For non competitive devices, maybe,” Jobs wrote. “For competitive devices with iPod, it’s too soon to decide that.”
Consumer lawyers presented evidence that Apple’s modifications led iPods customers to lose music libraries and other files that had been downloaded from sources other than iTunes.
‘Worst’ Experience
“You guys decided to give them the worst possible experience and blow up” their file databases, which would occur after iPod users received an error message directing them to restart their iPod, said consumer attorney Patrick Coughlin.
Apple executives testified the company was providing a seamless “eco-system” for customers, using the iPod, iTunes and desktop Apple computers, that would allow them to easily download music. Software upgrades such as the ones that blocked RealNetworks were aimed at protecting devices and software from an onslaught of hackers and corrupting software that would degrade the quality of iPod and iTunes, they said.
“Not only are they hacking,” Eddy Cue, the chief of the iTunes Store, said when asked about RealNetworks, the much more important issue was “breaking that eco-system that we had.”
“We did not want anything that would actually jeopardise that and cause problems for customers,” he said.
The trial is expected to wrap up early this week.
News by Bloomberg, edited by ESM
