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DOJ Expands Price Fixing Probe
March 3, 2006
Thomas Mennecke
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If you think the news has been flat out terrible for P2P and file-sharing for the last two weeks; rest assured there’s enough bad news to go around. Reuters is reporting the United States Department of Justice has subpoenaed all four major music labels – Sony BMG, Vivendi Universal, EMI and Warner Music.

The DOJ’s reported investigation is an expansion of New York State Attorney General Eliot Spitzer’s current inquiry. At question is whether the four major labels have conspired to set music download prices at 99 cents. If evidence exists the four worked together to fix prices, the State of New York could bring antitrust lawsuits against the companies.

Currently, no one from any of the music companies or the Department of Justice is offering comment. However Reuters has reported that sources close to the investigation stated that Sony-BMG has already received their subpoena. In addition to the DOJ remaining quiet on the issue, no press release has currently been issued.

The widespread implications beyond the state of New York could justify the DOJ’s role in this new round of subpoenas.

Perhaps the most immediate impact of this expanded investigation is the future price of authorized downloads. The major labels and Apple Computers were scheduled to renegotiate the current price of music tracks this year. One of the most pressing contentions is the music labels desire to implement variable pricing, while Apple continues to be adamantly opposed. The major labels might have been able to wiggle their way into variable pricing with only Spitzer on their case, however this appear less likely with the DOJ now involved.

This story is filed in these Slyck News categories
Entertainment Industry :: RIAA

Reuters Article

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