Apple: RealNetworks hacked iPod
iPod maker alleges Real violated its music player, says new software will not support its products.
July 29, 2004: 12:10 PM EDT
By Andrew Stein, CNN/Money staff writer
NEW YORK (CNN/Money) - Apple Computer accused RealNetworks Thursday of adopting the tactics of a hacker and breaking into the technology behind its popular music player iPod device.
RealNetworks (RNWK: Research, Estimates) unveiled a new product Monday called Harmony that allows users to download music from its online music store and use it on any portable music player, including Apple's iPod.
"We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod," Apple said in a release
Apple (AAPL: Research, Estimates) has seen sales of iPod boost its bottom line over the past several quarters and has unveiled a smaller, lower-cost version.
Previously, iPod would only play digitally protected songs that carry restrictions and were purchased from Apple's own iTunes music store.
Apple said Thursday it is looking into Real's actions under various laws, including the Digital Copyright Millennium Act (DMCA), which prohibits the manufacture, sale, or distribution of code-breaking devices used to illegally copy software.
A spokesman for RealNetworks was unavailable for immediate comment Thursday. The company provides media playback technology to CNN and CNN/Money.
Real said Monday its engineers worked out a way for its files to be compatible with iPod solely through analysis of publicly-available information.
Apple has a variety of legal steps it could take to slow down Real, according to Ernest Miller, a fellow at the Information Society Project at Yale Law School. These include lawsuits alleging patent infringements, copyright violations and violation of the DMCA.
"However, the law here is very fact-specific and quite complicated," he wrote in an e-mail to CNN/Money. "At the very least, Apple has the opportunity to tie up Real in some expensive litigation."
Apple said that it would "strongly caution" Real and its customers that when iPod software is updated, Harmony will stop working with "current and future" iPods.
Yale's Miller wrote "if I were advising Apple, I think there is a strong case to be made that Apple should take action against Real."
"The reason would not be because Real is a threat (they aren't), but because of the precedent it sets," he added in the e-mail. "Microsoft will be coming out with their own online music shop this fall, and they will be a threat. Better to nip such competition in the bud."