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Record labels accused of price fixing

updated 10:25 am EST, Fri March 10, 2006

Music labels, price fixing

A major name in class-action lawsuits has filed a complaint in the federal court, accusing major record labels of fixing prices for internet music downloads as well as CDs. San Diego attorney William Lerach's lawsuit claims that Sony BMG, Universal Music, Time Warner, Bertelsmann, and EMI fought together to keep the online music market from emerging, and then "conspired to fix and maintain" music prices once services like Apple's iTunes Music Store became inevitable, according to a report from the Red Herring. The class-action suit follows hot on the heels of a U.S. Department of Justice investigation into online music pricing, and New York Attorney General Eliot Spitzer has initiated a similar probe. The suit alleges that the music labels "use their market power to coerce online music retailers to sign 'most favored nation' agreements that specify that the retailers must pay each of the defendant labels the same amount. By setting a wholesale price floor at $0.70 per song, defendants have fixed and maintained the price of online music at supracompetitive levels," the suit reads.




by MacNN Staff

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  1. JoeE

    Joined: Dec 1969

    0

    $$$-hungry

    The major record labels whined about online file-sharing services such as Napster, KaZaA, and everyone else. And now that legitimate online businesses such as iTMS are SELLING the music and video files, these record label companies are STILL complaining!!! They use musical artists and film producers are their scapegoat - every decision they make is based on one question only: "Will this result in increased profits?" This is without any regard to others who can potentially help to increase their profits as well.

    In all fairness, all businesses make their decisions based on potential profits, but many businesses also take into consideration their relationships with customers and vendors alike. I wish I could say the same for the major record label companies.

    I wouldn't be surprised if they attempted to overturn laws that prohibit them from dissolving any businesses that sell music online, or at least prevent these businesses from selling music online. This would set up Sony BMG and the rest of the Record Label Mafia to monopolize online music sales. Yes, I know, this is just a conspiracy theory on my part...but, really, how far is this from becoming a reality?

    Enough is enough.

  1. SierraDragon

    Joined: Dec 1969

    0

    Thieves

    The record industry oligopoly has been (IMO illegally) influencing markets to keep music prices artificially high for years. The current example is good because it seems fairly clear. Also, right now the Bush administration is probably too distracted by its other screwups to expend the political chits to protect them like they did Microsoft when MS lost its anti-trust suit, including at the Supreme Court.

  1. sdf

    Joined: Dec 1969

    0

    I can only imagine...

    I can only imagine how the conversation went. "Ha ha ha. Of course we're price-fixing. Ha ha ha. Sue us? Ha ha ha. Oh, wait. You're actually serious?"

  1. bigpoppa206

    Joined: Dec 1969

    0

    while...

    the music industry is probably guilty of price-fixing, there is no way that online sales have come close to what joee thinks they might be. The Internet is still not the greatest resource for selling music, but it is the best resource for promoting it.

    PS: the artists and producers are in it for the money too, don't kid yourself.

  1. JoeE

    Joined: Dec 1969

    0

    certainly...

    PS: the artists and producers are in it for the money too, don't kid yourself.

    And I have no doubt about that either.

    This is especially true for artists who are actively promoting themselves with or without an agent, booking gigs that pay and producing CDs for retail sales. These are the artists who also put much emphasis on their musical career, even if they have or had a professional career in a much different field. And, the bigger they become, the more it is possible for them to simply drop their professional career to devote all their efforts into a career as a musical artist. It would be difficult for me to believe that this type of musical artist is in it JUST for the music, and not the money.

    Besides, anyone who is truly in it for the music will voluntarily play for the masses without any care to being paid for the gig.

  1. macusersneedtogetalife

    Joined: Dec 1969

    0

    Of course...

    "Besides, anyone who is truly in it for the music will voluntarily play for the masses without any care to being paid for the gig."

    Exactly. And they will continue to do that until they drop dead from starvation, at which point the value of their CDs will go through the roof and the Foundation that bears their name will be worth million$.

    There is no one who is in it just for the music. Even the most die-hard hippy dreams of making money by strumming three chords and screeching like a cat in the night. If one can make that money, more power to them. The record companies, however, have to go. They are what makes the music industry as slimey as it has become.

    "The music business is uglier than most things. It can accurately be described as a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free and good men die like dogs." - Hunter S. Thompson

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