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Music Industry Pays $67M Fine For Price Fixing
Krelnik writes "Reuters is reporting that the music industry is paying a $67.4 Million settlement to end a lawsuit where they were accused of artificially inflating CD prices at retail. Yeah, P2P is causing their problems. Sure, sure it is. Here's the story at Reuters UK."
where does it say Reuters UK ? someone needs to RTFA i think
anyway karma fans here's the story
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NEW YORK (Reuters) - The five largest music companies and the three largest music retailers will pay $67.4 million in cash to settle a CD price fixing case launched by New York and Florida two years ago, State Attorney General Eliot Spitzer said on Monday.
In August 2000, 43 U.S. states and commonwealths said an industry practice called "minimum advertised pricing" (MAP), under which the labels subsidized advertising for retailers that agreed not to sell CD's below a minimum price determined by the labels, artificially inflated the price of CDs between 1995 and 2000, violating federal and state anti-trust laws.
The five record labels -- Vivendi Universal's Universal Music Group, Sony Music, Bertelsmann AG's BMG Music Group, AOL Time Warner Inc.'s Warner Music Group and EMI Group PLC -- and the three retailers, Musicland Stores Corp., Trans World Entertainment Corp. and Tower Records, agreed to stop using MAP policies as part of the settlement.
Brad Maione, Spitzer's spokesman, said the companies would not admit any wrongdoing.
The cash settlement will be paid to the 43 states. The companies also agreed to distribute $75.7 million worth of CDs to public entities and nonprofit organizations in all 50 states.
"This is a landmark settlement to address years of illegal price-fixing," Spitzer said in a statement. "Our agreement will provide consumers with substantial refunds and result in the distribution of a wide variety of recordings for use in our schools and communities."
I don't know about you, but if you are SO concerned about not being able to play your own cd's if you move computers and/or reformat, here is the solution (at least with Windows Media Player): 1) Open up media player 2) Go to the tools menu, License Management 3) Click on "Browse", choose a location then click "Backup" 4) Follow the instructions Voila! To play your content in another computer, repeat the procedure, but instead use "restore".
The lawsuit that the recording companies settled is only not the whole story. The Attorneys General of a bunch of states sued them in civil court because they violated anti-trust law (allegedly). The Attorneys General, or the Federal Government could also have filed criminal charges against the record companies but they chose to file a civil lawsuit, presumably because it is much easier to win. In criminal proceedings, the defendant has to be proven guilty 'beyond a reasonable doubt.' To prevail in civil court, the standard is 'more likely than not.' It is the difference between being 51% sure they are guilty and being 99% sure.
While the record companies refused to admit fault with words, they did it with dollars. You don't settle a lawsuit for that much money unless you are pretty sure that you will be found liable at trial. If they were really settling for the 'nuisance value' of the lawsuits, the amount would have been much lower. Think of this settlement as plea bargaining for guilty corporations--"We won't fight the the punishment as long as we don't have to say 'we're guilty' out loud."
The other shoe, or boot, that is waiting to fall is private class action litigation. If someone robs you, the government can prosecute or sue them. But as a victim, you also have a right to sue. (Alas, you don't have a right to start a criminal prosecution--under US law--but you can, like the family of O.J.'s wife, sue in civil court.)
There was at least one private class action lawsuit filed against these record companies for price fixing in 1996. The last I saw (1997), it was still kicking around the courts. In dollar terms, private class action suits can easily exceed the damages they'll pay to settle the government's case.
The other damage the industry faces is that this settlement, while not technically an admission of guilt, is tantamount to it in the court of public opinion. The industry has been shown to be bigger pirates than Napster--they've been ripping off ALL of their customers.
This is called "gray pricing" and its intent is to balance the two dollars. It also simplifies accounting and sales for the selling firm.
You wouldn't have much luck trying to make any money off of exporting them - the duty will kill you.
Cheque in Canada. One thing bugging me, what happens to those not in the states who have equally been screwed by RIAA price-fixing?
The cash settlement will be paid to the 43 states. The companies also agreed to distribute $75.7 million worth of CDs to public entities and nonprofit organizations in all 50 states.
From this it sounds like they're giving out CD's instead of cash. Shitty deal, 'cause they'll probably just give out worthless CD's anyhow. We can have RIAA coasters to go along with the AOL ones.
Regardless, sounds like a good arguement against the "P2P is the reason nobody buys CD's"
The RIAA made me do it - phorm
wholesale prices were not affected by the MAP program
If you believe that a retail price war wouldn't have put any pressure on wholesale prices you're smoking crack.
Lower retail prices would mean higher retail sales. Can't make a retail sale without buying it wholesale first. If retail prices don't put any pressure on wholesale prices then the RIAA should have ENCOURAGED a pricewar.
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- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
According to this, there is also $75M in CDs to be given away to non-profits.
Do you have any applicable laws?
There is nothing so silly as other peoples traditions, and nothing so sacred as our own.