It took Apple Inc. (NASDAQ:AAPL) quite a while to be dragged into the courts in an antitrust lawsuit. Tim Cook, Apple’s CEO, has another war to fight, which according to CNBC‘s Josh Lipton could potentially cost the tech giant between $350 million and $1 billion.
On CNBC, Lipton explained the core issue at hand in which Apple is alleged to have exercised its monopolistic powers.
“[…] Apple Inc. (NASDAQ:AAPL) is going to have to fend off allegations that it violated antitrust rules between 2006 and 2009 when plaintiffs allege is that there was this iPod upgrade in 2006 that illegally shut out the competition, companies like RealNetworks from the mp3 market […],” informed Lipton.
Essentially what this all boiled down to was that Apple Inc. (NASDAQ:AAPL)’s customers were forced to buy music from iTunes, and also this feature got them further entrenched into Apple’s ecosystem. The later products that the company released including iPhones and iPads got their fair share of traction, because of the monopoly that Apple had exercised through its iPods.
Apple Inc. (NASDAQ:AAPL)’s management is taking this case seriously because if proved guilty, this could significantly tarnish the company’s reputation. It would mean that even though the company’s gadgets are impressive, but that is not the only reason why Apple has such a wide spread fan following. That the company has somehow managed to exploit, and trick its customers.
“[…] If you talk to Apple Inc. (NASDAQ:AAPL), they are really fired up about this. They make three points. One, they say that they were totally legitimate product updates to these iPods. Two, there is zero evidence they say of any harm to consumers, and finally they say that there is no monopoly power here that Apple exerted over that portable digital music player […],” said Lipton.
Apple Inc. (NASDAQ:AAPL)’s stock is down about 0.24% in the pre-market trading today.
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