Has Apple Created a Monopoly with the iPod and iTunes?
In many ways, Apple does a firm grip on the MP3 player and digital music market with its iPod and iTunes empire. Some people believe that Apple has been unfair in these respective markets from a consumer standpoint, saying that Apple overcharges for iPods and also for music at iTunes.
A recent 24-page class action lawsuit has been filed in a Northern California court, alleging that Apple has created a monopoly with its iPod and iTunes products, and that consumers are paying the price because of it. The lawsuit specifically points out that iPod owners are forced to buy from the iTunes store if they wish to have protected music (FairPlay AAC format). On the flip-side, iTunes customers must purchase an iPod if they want to listen to the same protected music on an MP3 player. It's this "lack of options" that the chief plaintiff, Stacie Somers, says violates California competition laws. She adds that it also violates the Cartwright and Sherman Antitrust Acts. According to the AppleInsider, Somers is asking for a "permanent injunction against the reported behavior in addition to damages."
The lawsuit also goes on to say that Apple ships its products with "crippleware". The plaintiffs claim that the iPod's chipset is compatible with Windows Media Audio (WMA) formatted music, but the included software doesn't support this type of format. They believe that Apple is trying to "force" you to purchase music from iTunes in order to make bigger profits and to gain more of a stronghold over the digital music industry.
Whether these claims have any real merit - I don't know. What I do know, is that the digital music industry should be a level playing field that allows the user to choose whatever type of music format that they wish for their MP3 player. Also, consumers should not have to pay an arm-and-a-leg to fill their MP3 player with music.
I looked at a recent article at ArsTechnica, which stated that it would cost $40,000 to fill a newer iPod with music from iTunes at $0.99 per song. This is the reason that so many people are turning to P2P sharing websites, such as Limewire, to get their music. It is believed that about 36% of people use a P2P website to get their music instead of using a paid service like iTunes or Rhapsody. These numbers are astounding, and it should be a wake-up call for the digital music providers out there - starting with iTunes.