CF Apple Computer

A 24-page class action complaint submitted this week in a Northern District of California court alleges that Apple is unfairly tying the iTunes Store and the iPod together by selling much of its music in the FairPlay AAC format. Customers who own the iPod must buy from iTunes if they want music in a protected format; in just the same measure, iTunes customers must buy an iPod if they want to listen to music on a portable player.

As Apple effectively controls the digital music sales industry, this is a major disincentive to buying a competing player, say chief plaintiff Stacie Somers and her representing lawyer Helen Zeldes. The two point to statements by government officials in France and Norway where Apple was accused of leaving customers without rights. Moreover, the iPod maker is not only neglecting support for rival standards but is deliberately stripping it out and creating “crippleware,” according to the lawsuit.

Although the chipset in the iPod shuffle natively recognize Windows Media Audio, no such support exists in the shipping firmware of it or any other iPod. Apple is also targeted in the complaint for using its secure position atop the market to allegedly overcharge customers for iPods.

Although the prices for immediate orders of 1GB and 4GB of memory were only separated by $5.52 at the time Apple produced the first-generation iPod nano, Apple saw fit to charge $100 more for the higher-capacity model, the plaintiff says. As these combined practices potentially violate the Cartwright and Sherman Antitrust Acts in addition to California competition laws, Somers’ suit asks for a permanent injunction against the reported behavior in addition to damages.