Major labels must face internet price fixing case

February 2011

Record labels

This is a case that has been bubbling under for a while now and one I have kept my eye on. Did the record labels set up MusicNet and PressPlay (remember them?) to try and enforce their control over the distribution of music on the internet and fix prices  ….. well, the US Supreme Court has rejected an move by the major record labels’ to block a lawsuit lodged by consumers who claim the majors colluded to fix prices on music sold on the Internet. Universal Music Group, Sony Music, Warner Music and EMI had asked the Supreme Court to block the lawsuit, after a federal appellate court in New York agreed with a lower court’s ruling that sufficient evidence existed for the lawsuit to proceed. The now five year old lawsuit (Starr v Sony) alleges the labels charged unreasonable rates for songs, and unreasonably imposed restrictions on consumers transferring songs to portable players. It also alleges the labels colluded to set a base price of 70 cents per song for selling their songs. In 2008, a federal judge dismissed the original lawsuit, ruling the plaintiffs had not presented enough evidence for a anti-trust hearing  but on appeal this was overturned  by the US Appeals Court in New York and the appeals court ordered the original judge to reconsider the case which resulted in this most recent appeal to the Supreme Court.

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