This section doesn’t ring true to me, perhaps because the situation is even more bizarre than is described here (though perhaps less relevant to the DMCA).

In short, Real and Apple are both selling other people’s music. Those people demand(-ed) DRM protection. Apple’s DRM stops you playing the songs on anything but their platforms (Quicktime, iPod, Apple TV etc.). Real and Microsoft’s DRM stops you from playing on anything but their platforms. Crucially this means Real and Microsoft’s own digital locks prevent them from selling to owners of the most popular portable music player.

From my understanding of how DRM systems work, wrapping your own DRM around files in a compatible way shouldn’t really be possible. Which suggests that the Harmony system was an impressive ‘hack’ (in the best sense of the word). It’s hard to find commentary about how the Harmony system works and most commentators seem to assume that there’s no technical issue with a third party suppling DRM’d content, and seem happy to bash either Real or Apple as both companies have their detractors and fans for mostly unrelated reasons.

I would guess that Harmony is doing 99% of the work needed to break Apple’s DRM and then using the results (I’m thinking in particular about keys used to sign content) to do the opposite, and wrap new content in DRM. Hence Apple’s warning of the DMCA. This is speculation though, you’d need to get an encryption or DRM(-breaking) expert to comment.

But to return to this not ringing true: this entire section is framed as Apple fighting competition with the DMCA, when eMusic (and not at the time but now Amazon) as well as many smaller music stores are competing fine by simply providing non-DRM’d files. At several points awkward sentences are used to avoid actually saying this though, e.g.:

“Real’s actions meant that consumers had two sources of copy-protected music for their iPods”

The phrase “copy-protected” makes this sentence true, but also somewhat meaningless. What about CDs? eMusic? Or various other legal sources.

The final irony is that Apple has publicly stated that it wanted to remove DRM because it was afraid of unfair competition from *illegal* music, which was easier to use and better for consumers because of it’s lack of DRM.

The reference to Apple’s “Rip, Mix and Burn” campaign and cost to fill a iPod with songs bought from iTunes both skirt the interesting issue of whether or not it is legal to rip your purchased CDs to mp3s, to play on your PC, your iPod or to burn to a mix CD.

Apple’s iTunes software allows you to do so, while it doesn’t let you rip DVDs even though iTunes and iPods can play the video they contain . However music industry statements have claimed even CD ripping is illegal so the legal situation seems unclear (and changes depending on your location):

http://en.wikipedia.org/wiki/Ripping#Legality