Big Music in price fixing lawsuit. Again.
p2pnet news view Crime | P2P | Music:- The major record labels hotly deny they’re the lying members of a venal price-fixing cartel.
They even deny they’re part of a cartel.
Rather, they say, they’re just simple companies trying to make an honest living while their wicked customers get up every morning determined to rob them blind.
But once again they’re in the public eye for price fixing.
Not guilty
Five years ago 43 attorneys general went after the major labels for price fixing.
The record companies “admitted no wrong-doing” but nonetheless were ordered to supply 3,500,000 music lovers with cash payouts.
And as another part of their settlement for not having done anything wrong, the (not)guilty parties were also to supply public schools and libraries with free CDs .
MDL Docket No. 1361 read:
“The Plaintiffs have alleged in two separate amended complaints that the Defendants conspired to illegally fix and control the pricing of Music Products sold to consumers through Defendant Distributors’ adoption and utilization of Minimum Advertised Price (MAP) programs in violation of the Sherman Act, state antitrust and unfair competition and/or consumer protection laws. The Plaintiffs have further alleged that as a result of the conspiracy residents of the Plaintiff States and members of the Plaintiff Settlement Class have been injured by paying more for Music Products than they would have paid in the absence of the illegal conduct. The Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Plaintiffs and any violation of law. The Court has not made any determination as to the merits of any of the claims or defenses of the parties to this Litigation.”
In the hot seat were:
- LABELS: Capitol Records, Inc d/b/a EMI Music Distribution, Virgin Records America, Inc, and Priority Records LLC; Time Warner, Inc, Warner-Elektra-Atlantic Corp, WEA, Inc, Warner Music Group, Inc, Warner Bros Records, Inc, Atlantic Recording Corporation, Elektra Entertainment Group, Inc, and Rhino Entertainment Company; Universal Music & Video Distribution Corporation, Universal Music Group, Inc, and UMG Recordings, Inc; Bertelsmann Music Group, Inc and BMG Music; and, Sony Music Entertainment Inc.
- RETAILERS: MTS, Inc d/b/a Tower Records, Musicland Stores Corp, and Trans World Entertainment Corp.
Now in “Starr v SONY BMG Music Entertainment, an antitrust class action against the RIAA, a complaint, dismissed at the District Court level,- has been reinstated by the Second Circuit,” says Ray Beckerman in Recording Industry vs The People.
Among other things, he says, the appeals court noted the following allegations >>>
First, defendants agreed to launch MusicNet and pressplay, both of which charged unreasonably high prices and contained similar DRMs.
Second, none of the defendants dramatically reduced their prices for Internet Music (as compared to CDs), despite the fact that all defendants experienced dramatic cost reductions in producing Internet Music.
Third, when defendants began to sell Internet Music through entities they did not own or control, they maintained the same unreasonably high prices and DRMs as MusicNet itself.
Fourth, defendants used MFNs in their licenses that had the effect of guaranteeing that the licensor who signed the MFN received terms no less favorable than terms offered to other licensors. For example, both EMI and UMG used MFN clauses in their licensing agreements with MusicNet.
Fifth, defendants used the MFNs to enforce a wholesale price floor of about 70 cents per song.
Sixth, all defendants refuse to do business with eMusic, the #2 Internet Music retailer.
Seventh, in or about May 2005, all defendants raised wholesale prices from about $0.65 per song to $0.70 per song. This price increase was enforced by MFNs.
Named in the official court document are:
SONY BMG MUSIC ENTERTAINMENT, SONY CORPORATION OF AMERICA, BERTELSMANN, UNIVERSAL MUSIC GROUP, TIME WARNER, formerly known as AOL Time Warner Cable, Inc, WARNER MUSIC GROUP CORP, EMI MUSIC NORTH AMERICA, CAPITOL RECORDS, doing business as EMI Music North America, JOHN DOES 1-100, BERTELSMANN MUSIC GROUP, BMG MUSIC, BMG MUSIC PUBLISHING, doing business as The RCA Record Label, CAPITOL-EMI MUSIC, and VIRGIN RECORDS AMERICA.
The New York action combined 28 lawsuits brought across the country from December 2005 through July 2006, says the Associated Press, continuing >>>
The lawsuits accused the record companies of agreeing to the wholesale price floor of about 70 cents per song when other services began offering Internet music at a cheaper rate.
The 2nd Circuit noted that eMusic, a popular online music service selling songs produced by independent labels, charges 25 cents per song and places no restrictions on how purchasers can upload their music to digital music players. It also noted that the defendants refuse to do business with eMusic, the No. 2 Internet retailer, trailing only the iTunes Store.
The appeals court also noted that the alleged price fixing is being proved by the New York State attorney general and is also subject of two separate investigations by the Department of Justice.
Practice of last resort
This last item is particularly interesting and one wonders if it might present difficulties for Andrew Cuomo, named 64th attorney general of New York State in 2006.
He, and not Vivendi Universal, EMI, Warner Music and Sony BMG, is the author of the RIAA’s new we won’t sue ‘em all ploy, p2pnet revealed last year.
We knew Cuomo was employed as front man for the new RIAA tactic, but we weren’t aware he’d actually originated it, we said, going on >>>
However, “During this past summer, we began discussions with New York Attorney General Andrew Cuomo, who suggested that now was the time to take our practice of last resort – lawsuits – and replace that form of deterrence with productive engagement by the ISP community in the form of graduated response programs,” The Flat Hat, the College of William and Mary’s student newspaper, has RIAA boss Mitch Bainwol flatly stating.
He’s mistaken in calling the RIAA sue ‘em all campaign a practice of last resort, of course. The law suits, launched in 2003, were, and still are, the corporate music industry’s weapons of first resort.
The Flat Hat post refers to the RIAA claim that ISPs are ready and willing to take action against their own customers on behalf of Vivendi Universal, EMI, Warner Music and Sony BMG.
This was probably the first refence to what has become the Three Strikes debacle under which the entertainment cartels — yes, cartels — are attempting to shanghai governments around the world into turning an industry business plan into local law under which administrations are corporate copyright agents, and ISPs enforcers, acting against their own custromers.
Stay tuned.
Jon Newton - p2pnet
..… and identi.ca
First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi
Recording Industry vs The People – Price fixing case against RIAA reinstated by 2nd Circuit, January 13, 2010
we won’t sue ‘em all - RIAA claims of ISP support: equine excreta, January 6, 2009
Associated Press – NY Court OKs Internet Music Sales Lawsuit, January 13, 2010
p2pnet – ‘We won’t sue ‘em all’ ploy Cuomo’s idea: RIAA, Januarfy 30, 2009
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January 14th, 2010 at 1:28 pm
“…were ordered to supply 3,5000,000 music lovers with cash payouts.”
Is that supposed to be 35 million, or 3.5 million?
January 14th, 2010 at 2:57 pm
Preferably the former… with the individual payout of the latter
January 14th, 2010 at 4:47 pm
Once again DA spots p2pnet’s Deliberate Error of the Day (cough, cough ..)
Cehers!
January 14th, 2010 at 6:45 pm
This action does not even include last years price-fixing event at Apple’s iTunes, in which the major labels colluded to force iTunes to raise prices from .99 to 1.29 per song, in return for iTunes being allowed to offer DRM-free downloads like it’s other competitors such as Amazon had been allowed to do for the last two years.
January 14th, 2010 at 11:40 pm
Next, Big Music will take aim at file sharers… for fixing the price at zero!