More than three years after his death, legendary Apple Inc. CEO Steve Jobs held a federal courtroom transfixed on Friday as attorneys played a video of his testimony in a class-action lawsuit that accuses Apple of inflating prices by locking music lovers into using Apple's iPod players.
Looking gaunt and pale, Jobs spoke softly during the deposition he gave six months before his death in October 2011. But he gave a firm defense of Apple's software, which blocked music from services that competed with Apple's iTunes store.
"We were very scared" of the prospect that hackers could break Apple's security system, Jobs said, because that might jeopardize Apple's contracts with music recording companies that didn't want their songs to be pirated. "We would get nasty emails from the labels," he added.
The video wasn't released Friday following its viewing in court.
But Jobs didn't seem cowed by the record labels in an email, read by an attorney for the plaintiffs, in which the Apple CEO demanded that a record company executive publicly apologize for praising rival RealNetworks for producing software that would make songs from the RealNetworks store play on Apple's iPods.
Dressed in his trademark black turtleneck and blue jeans, Jobs appeared impatient at times and swiveled in his chair during the session, which was recorded at Apple's headquarters in Cupertino, California. He said he didn't remember why he was upset with the recording executive. But he acknowledged that he had proposed language for an Apple press release that condemned RealNetworks as a "hacker."
"We are stunned that Real has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions" under federal law, the release said.
During testimony this week the plaintiffs also showed an email from Eddy Cue, who runs the iTunes business, saying music labels wanted Apple to let iPods play music from other sources — in order to encourage more music sales. However, Apple executives insisted the labels were even more vocal in pressing Apple to maintain security against unauthorized copying. The message about making devices more compatible "was in conflict with what they were telling me to do" about security, said Jeff Robbin, who oversaw iTunes engineering and helped create the iTunes software.
Apple used anti-piracy software that ensured only songs from its own iTunes store could be played on its iPod devices. Attorneys for a group of consumers and iPod resellers contend say that froze rival device-makers out of the market, allowing Apple to sell iPods at inflated prices. The plaintiffs are seeking $350 million in damages, which could be tripled if the jury agrees Apple violated antitrust rules.
Jurors saw the video on the fourth day of trial in a case that has been rocked by an unusual development. Apple attorneys late Thursday said neither of the women named as plaintiffs purchased iPods equipped with the restrictive software during the timeframe covered by the lawsuit, which is September 2006 to March 2009.
Apple lawyer William Isaacson formally asked the judge on Friday to dismiss the case because the two women can't claim to have suffered the harm alleged in the suit. The motion came after plaintiff Marianna Rosen testified Wednesday and, in response to questions, showed an iPod that she said she bought in 2008. Isaacson said Apple checked the serial number later in the day and found it was actually purchased in July 2009.
Attorneys who brought the suit had already conceded that iPods purchased by the other plaintiff, Melanie Wilson, weren't covered by the suit. They agreed Friday to drop Wilson from the case, but plaintiffs' attorney Bonny Sweeney said Rosen is still eligible to proceed because she has receipts showing she bought two other iPods in September 2008.
When Isaacson countered that Apple's records show those two iPods were purchased by Rosen's husband's law firm, Sweeney said Rosen was authorized to use the firm's credit card for her own purchases.
U.S. District Judge Yvonne Gonzalez Rogers asked Sweeney to submit a formal response to Isaacson's arguments over the weekend, but Rogers didn't say when she'll make a decision.
