Former Apple engineer describes 'secret war' with opponents of copy protection

At antitrust trial, ex-employee says his job was to stymie rivals' attempts to compete with iTunes and the iPod

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A former Apple engineer on Friday told a federal jury that he worked on a project meant to deny rivals access to the lucrative iTunes digital music and iPod device markets, according to the Wall Street Journal.

Previously, the engineer, Rod Schultz, had characterized Apple's frequent updates of iTunes as a "secret war" between the company and those who sought to break copy protection of music and movies.

At an Oakland, Calif. trial where Apple faces antitrust accusations, Schultz told the jury that his work was "intended to block 100% of non-iTunes clients" and "keep out third-party players," the newspaper reported (subscription required).

Schultz, who worked for Apple from January 2006 until March 2008, was a senior software engineer on the team responsible for FairPlay, the company's digital rights management (DRM) technology designed to prevent illegal copying and sharing of content. Currently, Schultz is vice president of product at Krimmeni Technologies, a privately-held cloud security company based in San Francisco.

The federal jury has been hearing testimony for two weeks, and will weigh allegations that Apple's practices resulted in higher iPod prices.

Schultz came to the attention of the plaintiffs' lawyers in large part because of a 2012 article he wrote for a French computer security and cryptography publication. While the plaintiffs were unable to convince U.S. District Court Judge Yvonne Gonzalez Rogers to admit the article as evidence, they did subpoena Schultz, who testified reluctantly.

In that article, written years after his stint at Apple and while he was working at Adobe, also on DRM, Schultz described the cat-and-mouse game between Apple and outside researchers who quickly came up with ways to sidestep FairPlay each time Apple updated the technology.

"This was the beginning of a secret war between the FairPlay team and Brahms, costing millions of dollars," Schultz wrote, referring to the moniker of the individual or team that in early 2008 reverse-engineered the latest FairPlay copy protection.

Schultz also described the reverse engineering work -- which resulted in a software program dubbed Requiem -- as "an extremely sophisticated attack of Apple's FairPlay."

Apple has not denied that it regularly updated iTunes and the iPod firmware to meet contractual obligations with content providers, but it has rejected claims that it did so to lock out rivals' devices from the iTunes marketplace or alternate music stores' wares from playing on its own iPods.

More interesting outside the narrow confines of the lawsuit, in the 2012 article Schultz offered an alternate explanation for Apple's argument five years earlier that it would be best to drop copy protection on the music it sold. That decision was initiated by then-CEO Steve Jobs, who issued an open letter in February 2007 in which he acknowledged the difficulty of staying ahead of those trying to break DRM.

"The problem, of course, is that there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music," Jobs wrote in the missive.

Two months later, EMI, one of the four major music labels, struck a deal with Apple to sell DRM-free tracks on iTunes; by January 2009, iTunes was selling unprotected tunes from all four labels, as well as thousands of independents.

Schultz speculated that the move was less Apple largess and more one forced on the Cupertino, Calif. company.

"Jobs was astute enough to realize the negative reaction the public had to DRM, and he successfully painted the picture that Apple hated DRM, and that Apple wanted music to be freely shared," Schultz wrote in the 2012 piece. "The music industry finally gave in to Steve Jobs, giving him —- and the consumer —- a victory in the music war on DRM."

But perhaps there was another reason for Apple's reversal.

"Maybe Steve Jobs was really trying to spin a pending decision by the music industry into a public perception victory for Apple," Schultz argued. "The truth was that with the power of its DRM, Apple was locking the majority of music downloads to its devices. The music industry didn't go DRM-free because they hated DRM; they went DRM free because they were fearful of the leverage Apple was gaining with their iTunes + FairPlay + iPod combination."

Under Schultz's scenario, the music industry, between the rock of piracy and the hard place of Apple's dominance, chose what it thought was the "lesser of two evils" to break Apple's monopoly on the digital music business.

Schultz's article can be found on the website (download PDF).


Copyright © 2014 IDG Communications, Inc.

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