Anyone in the U.S. who bought a first or second-gen iPod touch between September 12, 2007 and and March 31, 2009 are eligible to get in on an antitrust lawsuit against Apple. The two complaints state that Apple broke federal and state laws by charging for iOS updates and prevented iPods from playing anything that wasn't bought through iTunes. The litigating class membership includes just about every iPod model, including classic, shuffle, and nano.

Although I was peeved when Apple had the gall to charge for an iOS update on my first-gen iPod touch, just so that users could get email and other apps that came for free with the iPhone, it was easy enough to work around. Apple's story about GAAP vs. non-GAAP accounting methods and reasons for insisting on the charge were overly complex and ultimately user hostile. Which is probably why Apple stopped charging for iOS software updates entirely.

I'm still not sure why the lawsuit is claiming that iTunes wouldn't allow outside music sources; from the sounds of it, that situation was isolated to a few types of incompatible DRM, but that's it. Basically, if you bought something from Real (remember them?) or something protected by Windows DRM, it wouldn't play on your iPod. If you had iTunes music with FairPlay DRM or DRM-free MP3s from any source, you were good to go.

Right now there's not much to do besides wait to see how the case pans out and collect what will likely be a five dollar refund for what you paid for the firmware update. You can get updates by signing up at the class-action suit site, or opt out of the case if you're crazy and intend on going after Apple separately for the same issue.

Apparently this case has been hounding Apple for awhile; do you guys see any legitimacy to it?

Source: AppleInsider

Apple,  Penguin, and Macmillan haven't shown any signs of settling with the Department of Justice over charges of e-book pricing collusion issued yesterday, sources say. However, the other publishers in the suit, HarperCollins, Hachette, and Simon & Schuster, are likely to settle before the investigation goes any further.  Those who settle would basically be letting Amazon take back its throne as the god-king of e-books, since publishers were "forced" to raise their prices there due to the contract with Apple that forbade them to offer the books for cheaper anywhere else (known as "the most favored nation" clause). Apple obviously isn't interested in allowing Amazon to undercut them if the iBookstore is going to have any hope of success.

On the upshot, any settlement means that consumers will be able to enjoy cheaper e-books on iOS devices, no matter which store you go with. Amazon seems willing to take a loss on pricing so long as it drives rivals out of the market. That said, is it unfair that Amazon is using its existing position of leverage to lock out competition, or should Apple be doing what's best for consumers rather than what makes publishers the most money?

Source: WSJ

The U.S. Justice Department has just slapped Apple and their various publishing partners, like HarperCollins, Macmillan, and Penguin, with charges of e-book pricing collusion. Sources say that HarperCollins is in a hurry to get the issue settled as soon as today, but Penguin was ready to put up a fight in court. Apparently Apple's contract demands that publishers sell their e-books on iOS for the lowest price that's currently being offered by competitors. This supports the agency model, whereby publishers are the ones setting the price, while the Justice Department wants things to stick with the wholesale model, where retailers set the price. We had heard last month that publishers were willing to concede to the Justice Department over the issue, but apparently settlement talks haven't been as productive as expected.

The idea here is that by having all of the publishers agreeing on the same pricing structure, it stagnates competition. Amazon still has a big lead in the e-book world, and under its current model, Apple won't be able to put up much of a fight if their prices aren't competitive. On the one hand, consumers should be getting the best prices possible, but on the other, publishers and their authors will have a rough time staying in business with smaller margins.

How often do you use Apple's iBooks? Do you prefer Amazon Kindle, or Kobo? Regardless of who you use, how much are you willing to pay for an e-book?

UPDATE 1: John Sargent from Macmillan has published an open letter on the matter:

But the terms the DOJ demanded were too onerous. After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model. We also felt the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.

Go read the whole thing via the TOR link below.

UPDATE 2: Nilay Patel of The Verge got his hands on the DOJ's paperwork, including references to the involvement of the late Steve Jobs, and Apple's head of internet services, Eddy Cue.

the government alleges that the publishing industry openly colluded to raise ebook prices and end Amazon's dominance, and that Apple was a willing participant in the scheme. What's more, the alleged conspiracy sounds like it was actually quite a conspiracy, with secret CEO meetings in private New York dining rooms and promises made to bosses up and down the chain.

Again, hit the source link for a lot of great info.

Source: Bloomberg, TOR, The Verge

The United States Federal Trade Commission (FTC) has subpoenaed Apple to testify in their ongoing antitrust investigation again Google. Specifically, they're interested in the deal Google made to be the default search engine on the iPhone. Since Google enjoys an incredibly dominant market position in search, the government wants to find out if they're abusing that position to unfairly keep out competitors.

The introduction of the iPhone in 2007 signaled the beginning of a shift from desktop to mobile search, and from search to apps. Google reportedly pays Apple millions a year to maintain default status on the iPhone to preserve their search share, and has developed the competing Android platform to help cement their position in mobile.

What, if anything, the FTC hopes to discover through Apple's testimony is unknown. Bing, which replaced Microsoft Live search in 2009, and the now Bing-powered Yahoo! are both user-selectable options in iOS, and Apple and Google relationship has soured considerably since Android's launch.

Typically, there'd need to be a clear sign of abuse, such as bundling (refusal to allow the use of a dominant product/service unless a less-dominant product/service is taken as well). The Next Webs Matthew Panzarino offers some speculation:

Some have postulated that the deal had something to do with Apple’s desire to have Google maps on the iPhone. Two sources, one at Google and one at a company that produces Apple-competing mobile devices, have told us previously that Google licenses map data exclusively to Apple outside of its own Android food chain.

More as this develops.

Source: Adam Santarino/Bloomberg via AllThingsD, The Next Web

The U.S. Justice Department and Federal Trade Commission are starting to look into Apple's new subscription service. Right now "looking into" the matter is as far as it goes and it may not ever develop into a formal investigation or any actions against Apple. The European Commission is also carefully monitoring the situation as well.

The Justice Department and Federal Trade Commission are looking to see if Apple's new subscription service is in violation of any U.S. antitrust laws since it appears as if it is forcing the media companies' customers into using iTunes as a payment service thus giving Apple a 30 percent profit cut for themselves. The other issue is that the publishers will not have the ability to link to outside sources for users to get their content and will also not be able to have different prices amongst the different sources for their content which could definitely pose antitrust problems for Apple.

Several executives from music streaming services have already commented stating the royalties they already pay to labels for their music and now having to pay Apple 30 percent for any subscriptions they sell is making for an anti-competitive environment and a poor business model. The problem there is that Apple only has a small portion of market share indicating that they are not the leader of an industry. The other issue is trying to figure out what percent would be appropriate as that can vary and can also become rather complex and authorities are not price regulators.

All-in-all Apple has stirred things up with their new policies and it doesn't appear as if things will be simmering down any time in the near future. Apple has had issues in the past and ended up taking a step back as to not get further heat from authorities so it will be interesting to see if Apple sticks to their guns on this or if this look into their new service makes them take a step back and relax a little on their policy.

[ The Wall Street Journal ]

The US government is reportedly now investigating Apple for the terms in the iOS 4 GM license that restrict rival ad networks owned by competing platforms -- i.e. Google's AdMob. Independent ad networks are not effected, nor is Apple's own iAd platform.

According to two people close to the situation, US regulators have already taken an interest in Apple’s actions, though it is not yet clear whether it will be left to the Federal Trade Commission, which carried out the recent Google investigation, or the Department of Justice to take an investigation forward.

This follows other reported probes into Apple's restriction on cross-compilers -- i.e. Adobe's Flash CS5 packager for iPhone, and its position in music -- i.e. Apple's decision to not promote tracks that gave rival Amazon MP3 a 24hr exclusive.

Google's AdMob acquisition itself faced intense US government scrutiny due to its dominant position in the online advertising market. Both Apple and Google want to buy AdMob, with Google winning out and Apple purchasing Quatro Wireless to power their new iOS iAd platform instead.

If one thing is clear, it looks like PC-underdog Apple is a high profile investigative target in the mobile space.

[Financial Times]

The New York Post is reporting that the Department of Justice is extending its anti-trust probe into Apple beyond music into all forms of media, including movies and TV shows.

"The [Justice Dept.] is doing outreach," said one Hollywood industry source. "You can't dictate terms to the industry. The Adobe thing is just inviting the wrath of everybody."

Interestingly, Hollywood thinks nothing about dictating terms to consumers or treating us like criminals, forcing DRM schemes on Apple and other companies -- schemes like HDCP and FairPlay that don't stop bootleggers but do stop regular consumers from fairly using the content they paid for. They've also recently gotten the government to help close the "analog recording loop", create unfair laws like the DMCA and pursue ridiculous international agreements to do likewise and worse.

Apple, like Microsoft and Google should be properly scrutinized for abusive and anti-competitive practices, absolutely. But what about Hollywood, who is scrutinizing them? The government is supposed to protect the interests of the people, not of the studios.

Ironically, Hollywood-mandated DRM is the only hard lock in iTunes.

If the probe into Apple is really about protecting consumers then great, protect us. If it's about helping friends in Hollywood remove Apple as a barrier towards further harming consumers with more DRM, higher prices, and less choice, then how about turning the DoJ around and pointing them in the right direction?

[New York Post via BGR

The New York Times (via Daring Fireball) reports that the Federal Trade Commission (FTC) is looking into whether the ties between Apple and Google's respective Boards of Directors violate Section 8 of the Clayton Antitrust Act.

The provision is designed to prevent two rival companies from acting in concert to reduce competition. While Google and Apple have rival mobile phone platforms and cloud services, iPhone vs. Android and Gmail (etc.) vs. MobileMe, Google's CEO, Eric Schmidt is on Apple's board of directors and the iPhone makes use of Google technology such as the built-in Google Maps, Google Search, etc.

According to the NYT, however:

Antitrust experts say that investigations of interlocking directorates rarely lead to major confrontations between companies and the government. Executives typically choose to resign from the board of a competitor if it poses a problem rather than face a lengthy investigation or a bruising legal fight.

The article also points out the "closeness" of Google to the Obama administration, and how that "closeness" doesn't seem to offer Google any insulation from the FTC.