p2pnet - rss feed: Record labels scammed DoJ
p2p news / p2pnet: Two of the Big Four Organized Music cartel members deliberately misled US investigators, US district judge Marilyn Hall Patel has decided.
In a case involving the original Napster, the Department of Justice was looking for possible anti-competitive conduct, says Recording Industry vs The People.
Patel’s ruling came from a dispute over which documents, “Vivendi Universal’s Universal Music Group and EMI Group Plc should be forced to release in a lengthy copyright battle over Bertelsmann’s investment in music-swapping service Napster,” says Reuters. “Prosecutors in 2001 began investigating whether music labels secretly worked together to use two joint ventures, MusicNet and Pressplay, to discourage digital downloading and protect CD sales by fixing digital music distribution terms.
“During the investigation, the joint ventures and their record label parents each submitted a ‘white paper’ to the DOJ summarizing their arguments. They also provided documents that included redacted, or blacked out, sections to remove privileged material.”
‘Redacted, or blacked out’
In 2001 the DoJ was investigating whether or not music labels, “secretly worked together to use two joint ventures, MusicNet and Pressplay, to discourage digital downloading and protect CD sales by fixing digital music distribution terms,” the Reuters story continues.
“During the investigation, the joint ventures and their record label parents each submitted a ‘white paper’ to the DOJ summarizing their arguments. They also provided documents that included redacted, or blacked out, sections to remove privileged material. The U.S. Justice Department abandoned the probe in December 2003, citing no evidence of wrongdoing.”
Napster investor Hummer Winblad Venture Partners, Bertelsmann’s co-defendant in the lawsuit, said arguments offered in the white papers were known to be false or misleading, says the story.
At the time, Napster was still trying to work with the labels, says Don Dodge, Napster’s former vp of product development.
‘One last effort ‘
“We made one last effort to convince the labels that they should do a deal with us,” he says. “A little known underground product called Gnutella had just surfaced. It was a P2P file sharing program that required no central server and no company to operate it. Gnutella was an open source program and we were already seeing new variants of it emerge. We told the record labels that we (Napster) had a loyal audience of over 50M users. We had servers that could control distribution. If they didn’t do a deal with us and put us out of business then Gnutella and its derivatives would become unstoppable. There would be no company to sue and no server to shut down. If we worked together now we could convert the market to a paying subscription or per download model. If we didn’t do a deal chaos would ensue. They didn’t believe us and didn’t really understand what this Gnutella threat was. The record labels lost billions of dollars in lost revenue over the next several years, and may never squash the free file trading movement.
“The RIAA prevailed and the courts shut down Napster. Roxio bought the Napster name and logo in a bankruptcy auction. They later changed their corporate name to Napster and sell music online as we had once planned to do. The founders of Napster have gone off in many different directions. Shawn Fanning and Ali Aydar started a company called Snocap, ironically to identify copyrighted music for the record labels. Jordan Ritter founded CloudMark a spam protection and security company. Sean Parker was president of Plaxo and is now president of FaceBook. Hank went back to being a VC at Hummer Winblad. Eddie Kessler, the VP of engineering is now doing consulting work in the bay area. Liz Brooks, our VP of Marketing went back to the music business. Milt Olin, our COO started a private law practice in Los Angeles. I went on to two more start-ups; Bowstreet and Groove Networks, and am now working with the Emerging Business Team at Microsoft.”
Currently being investigated
Meanwhile, the DoJ dropped its investigation in 2003, “citing no evidence of wrongdoing,” says Reuters.
However, Patel described the Vivendi and EMI efforts as an “ongoing unlawful scheme”.
Vivendi and EMI, together with the other two Organized Music cartel members, Warner Music and Sony BMG, are currently being investigated at US federal and state levels for alleged price fixing and bribery.
Ironically, they’re trying to sue customers into buying low-fidelity, high-priced digital downloads using fake charges of criminal file sharing as their excuse.
Also See:
Recording Industry vs The People - Court Finds Reasonable Cause to Believe that UMG and Capitol Deceived United States Dept of Justice, April 21, 2006
federal and state levels - Spitzer, FCC, Big Music row, April 5, 2006
Reuters - U.S. Judge orders record labels to turn over documents, April 23, 2006
fake charges - Don Dodge on Napster,October 22, 2005
April 24th, 2006 at 10:08 pm
The copyright holders have a monopoly on what they have. It is a shame that they aren’t required to bargain in good faith with p2p’s over it. However to date they have stonewalled any requests for licensing for them to become legal. There is no method or oppurtunity to become legal short of doing it their way and no other. If they aren’t getting the lions share of money and if money isn’t made, then they aren’t interested in any sort of deal.
Because of this and their methods, most folks aren’t wanting to deal with them. I won’t support those that use financial terrorism as a method of cohercing business. I quit buying music quite some time ago and also stopped buying dvds and movies when the sue em all became the thing that the majors would use to attempt to force customers into subpar offerings.
Since I can’t use the data my way, to fit my lifestyle with DRM it is of no use to me. I can’t resell it, I can’t give it to someone else as a gift, and I can’t transfer it to some other platform, the reason for ownership by buying no longer exists. It’s a rental with the name of ownership and the prices set are far too high for the value recieved.
When you couple that with these sort of shinagians, it isn’t worth doing business with those that won’t do business as a respected corporation should do. These blood suckers have no respect for the customer and I have none for them.
Let them keep their crap, I’ll keep my money. It sure isn’t going to go to those with these sort of ideas.
April 25th, 2006 at 1:14 am
You can’t touch these guys, they’re too powerful in Washington. If they were convicted of the worse imaginable crime, the BIG BOY’s CLUB will make it right. The RIAA is the Microsoft of music. They’re the Al Capone of booze, oh wait…