New York Attorney General Investigates ‘Payola’ Charges Against Majors
Competition , Record Labels / December 2004

COMPETITION LAW Record Labels The New York Attorney General, Eliot Spitzer, has targeted the major labels in the US (Warners, Universal, EMI, BMG-Sony) in an anti corruption investigation into payola – securing radio airplay for acts. Mr Spitzer has issued subpoenas to EMI and the other majors to seek details of any links between record companies and independent pluggers who are used to promote artistes to radio stations. Mr Spizer is investigating whether the use of ‘go-betweens’ violates anti-payola laws in the US – enforced by the Federal Communications Commission which prevent labels buying airtime. In 2002 the RIAA called on the US Government to bolster the laws and investigate questionable practices in the radio industry. Source: The Times 23 October 2004 and see :,3604,1334252,00.html

US Antitrust Settlement ‘Censored’ By State Lawyers
Artists , Censorship , Competition , Record Labels / September 2004

COMPETITION LAW/CENSORSHIP Record Labels, Artists In 2002 US District Judge D Brock Hornby sitting in the federal court approved the settlement of a lawsuit filed on behalf of millions of record club members who alleged they had been overcharged in a price-fixing conspiracy. The sum of US $143 million was agreed by the five major record companies (Sony, BMG, EMI, Universal and Warners) and three large music retailers in settlement of the anti-trust claims – the claims were that they had been conspiring to set minimum prices for music CDs in the United States. Under that settlement, 3.5 million people received cheques for $12.60 and libraries and schools across the country will due to get $75.7 million worth of music CDs. The lawsuit was signed by the attorney generals of 43 states and territories. However, all is not well with the settlement. In Kansas City, Missouri the Attorney General Phil Kline has withheld 1,600 of the state’s allotted 51,000 discs, because they are contrary to his “concept of decency”. He will not allow any albums that “promote violence or illegal activity” to go into public libraries or schools. The 25 offending artists include Outkast, Notorious B.I.G., Rage Against The Machine,…

EU Commission to Investigate ‘One Stop’ Licensing Schemes in Europe

COMPETITION/COPYRIGHT Record Labels, Music Publishers The European Commission has announced that it has warned 16 EU collection societies that an agreement between them to create a “one-stop shop” music licence may be in breach of EU competition rules. The agreement, known as the Santiago Agreement, was signed in October 2000 by five organisations – including the UK’s Performing Right Society (PRS) and Broadcast Music Inc (BMI) from the US. The Santiago Agreement is designed to tackle the problems that traditional copyright licensing schemes have faced in light of the growth of new technologies and Internet use, in particular the impossibility of limiting digital services by the notion of territoriality; once uploaded to the Internet, copyrighted music is accessible from almost anywhere in the world so the concept of ‘German’ or ‘British’ rights is inapplicable. The traditional licensing framework requires a commercial user wishing to offer such music to obtain a copyright license from every single relevant national society. The Santiago Agreement sought to adapt the traditional framework to the online world by allowing each of the participating societies to grant “one-stop shop” copyright licences which included the music repertoires of all member societies and which were valid in all their…

European Commission Seeks to Regulate Collection Societies

COMPETITION/COPYRIGHT Record Labels, Music Publishers The European Commission has launched consultations with a view to regulate collection societies which manage the marketing of copyrighted products such as CDs and DVDs. Collection societies act as trustees for rights holders, but the way they function may vary considerably within the EU and is an obstacle for businesses, the Commission said. This view is supported by the European ICT industry association (EICTA) which says many collection societies are actually slowing down businesses that distribute content online because they have to negotiate with one or more collecting societies in each country to obtain the rights to use content in that territory. EICTA is advocating official recognition and large-scale adoption of Digital Rights Management (DRM) systems. DRMs are used to protect and secure payments of online material such as music. They are based on direct licensing agreements which means that collecting houses could end up being bypassed because the products’ copyright would be managed directly by software. But the Commission paper says that those technologies have not yet been developed to a satisfactory level. It states that “a necessary pre-condition for their development is their interoperability and acceptance by all stakeholders, including consumers”. The EICTA…

Microsoft To Settle Class Actions, Record Labels Face Scrutiny
Competition , Record Labels / December 2003

COMPETITION Computer Software, Telecommunications, Record Labels Microsoft has agreed to settle class action lawsuits from a number of US states which alleged that the software giant abused its dominant market position. Microsoft are handing out discounts worth approximately USD $200 million to consumers and schools in several US states including Kansas, North Dakota, South Dakota and Tennessee. The Times(29/10/03) estimate that Microsoft has paid out more than $1.5 billion over the last ten years in anti-trust and competition payments. Microsoft is now facing further actions from the US Government and state justice departments who have raised concerns the world’s largest software maker is trying to use its dominant Windows operating system to influence where customers buy their music online. If action is brought, it will be the first test of Microsoft’s unique and federal Court approved anti-trust settlement. The Justice Department and 19 state attorneys general have formally complained to a federal judge about a design feature of Windows that compels consumers who buy music online to use only Microsoft’s Internet Explorer browser and steers them to a web site operated by the company. Microsoft is also now facing competition investigations from the European Commission. In another anti-trust action, the five…

Granada and Carlton Free to merge
Competition / November 2003

COMPETITION LAW Television In a move which surprised many industry commentators, ITV giants Granada and Carlton are to merge to form a single ITV in England and Wales. The companies were given outline permission by the Trade and Industry Secretary, Patricia Hewitt, with only limited restrictions. The Competition Commission had advised the minister that the merger would not breach competition laws provided there are conditions attached to the way advertising is sold. At one point it seemed likely that the merged group would not be able to sell its own advertising as the new entity would control 52% of all UK television advertising as the new entity would control 52% of all UK television advertising (worth more than £3 billion). The Competition Commission have recommended a series of rules to prevent market abuse. As well as restrictions on advertising sales, the merged ITV group must agree to a package of safeguards to protect the protect the remaining three independent channel 3 broadcasters – The Scottish Media Group (Scotland), Ulster (Northern Ireland) and Channel TV (Channel Islands). In response ITV’s main commercial rivals in the UK (Channel 4, Five, BSkyB and Flextech’s ‘UK’ channels) are considering a joint advertising sales house….

Competition , Live Events / February 2003

COMPETITION Radio, Live Concert Industry Democrat Senator Russ Feingold has reintroduced his Competition in Radio and Concert Industries Act on January 28th 2003 which he says will help consumers, small and independent radio station owners, and independent concert promoters by prohibiting anti-competitive practices in the radio and concert industries. The Bill’s introduction comes as the Senate Commerce Committee holds a hearing on the problems of radio consolidation. Insiders say committee chairman, Republican Senator John McCain, is expected to sign on as a co-sponsor of the bill soon. The Committee expects to hear from representatives of leading radio station owner and concert promoter Clear Channel Communications, the National Association of Broadcasters, the Recording Artists Coalition and the Future of Music Coalition. Says Feingold: “Since originally introducing this legislation in June 2002, I have seen a groundswell of interest both in Congress and among artists, consumers, independent radio stations, and local promoters in restoring fairness to radio. My legislation will reduce concentration and crack down on anti-competitive practices, such as the new ‘pay to play’ system.” Feingold says the latter practice allows radio giants to “shake down the music industry.” See See