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.
Fresh-Faced Recruit
Joined: Feb 2006
$$$-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.