Major record labels in the USA are to be prosecuted on price fixing charges after the US Supreme Court gave the green light to a landmark lawsuit against Sony, Vivendi-Universal, Warner Music and EMI. The original ruling by US Federal Court has been upheld by the US Supreme Court, which found that there was enough evidence for a trial against the records labels on charges of artificially inflating the prices they charged for downloads.
The suit stretches back for almost a decade, to when labels launched download services such as MusicNet and Pressplay in 2001, before iTunes came along and wiped out the competition. The suit argues that the labels “restrained the availability and distribution” of music on the internet, while at the same time “fixing and maintaining … artificially high [prices]”.
It’s quite funny in retrospect, because both these download services were so restrictive that they didn’t even allow you to transfer mp3s to iPods or mp3 players, and subscribers were often prevented from transferring songs to CD. Unsurprisingly, these services were voted ninth in PC World’s ‘Worst tech products of all time’ poll.
The nitty gritty of the case involves the major labels setting an ‘artificial price floor’, meaning that although all labels had digitised their back catalogues, they colluded to raise the cost per song to between 65 and 75 cents, when independent labels having done the same to their back catalogues, were able to offer their massive bank of songs for about 25 cents a pop. Watch this space for a case that could result in a multi million dollar payout, but most likely will continue in the maze-like US court system for donkey’s years.
