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Court rules that sale of DRM-laden songs on iTunes did not run afoul of antitrust law


The US Court of Appeals in San Francisco this week upheld a lower court's ruling that found that Apple's operation of the iTunes Music Store did not run afoul of antitrust law.

The initial lawsuit against Apple was filed by Stacie Somers in December 2007. The suit alleged that Apple operated an illegal monopoly to the extent that songs purchased on iTunes (back when songs were encumbered with DRM) were unplayable on non-Apple devices.

In finding no wrongdoing on Apple's part, the Court of Appeals noted that Apple's US$0.99 price point for songs remained the same with and without DRM enabled. Note that Apple began selling DRM-free songs on iTunes back in early 2009.

Gigaom reports:

Despite the commanding market share, a three-judge panel affirmed that Apple did not break antitrust laws, in part because it maintained prices at 99 cents before and after the introduction of the DRM system. The court also noted that Apple maintained its 99 cent price point even after Amazon entered the market with DRM-free music, and after Apple itself dropped the FairPlay encryption system in 2009.

The court was likewise not persuaded by arguments that Apple changed its software to prevent companies like Real Network, which sold music for 49 cents a track, from operating on its devices.

The court's full ruling is available for your perusal over here.

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