U.S. Investigating Online Music Pricing

An anonymous reader writes "Times Online has a story about the U.S. Federal Government investigating whether the music labels are fixing prices for online music sales. 'The antitrust division is looking at the possibility of anti-competitive practices in the music download industry ... Mr Jobs suggested such a move would drive owners of Apple's iPod, the hugely popular digital music player, to piracy, a problem that has cost the music industry billions in revenues in recent years.'"

Comments

Worst quote ever

[mcc]

The full version of the quote, if you fill in the ellipsis, is:

Justice Department has launched an official inquiry into possible price fixing in the online music industry.

It is thought the probe will investigate allegations that music labels have colluded to fix the wholesale prices they charge online retailers such as Apple, which sells digital music through its iTunes website.

"The antitrust division is looking at the possibility of anti-competitive practices in the music download industry," a spokeswoman for the department said.

Last year, Steve Jobs, Apple's chief executive, accused the music industry of being "greedy" for wanting to raise digital download prices.

Mr Jobs suggested such a move would drive owners of Apple's iPod, the hugely popular digital music player, to piracy, a problem that has cost the music industry billions in revenues in recent years.

The way the slashdot article quotes this-- jumping right from talking about the justice department "launching a probe" to talking about Jobs complaining about "such a move"-- makes it sound like Jobs is objecting to the investigation.

In fact Jobs is complaining about the behavior being investigated, I.E., Jobs is objecting to price fixing.

Jobs has been vocal for a long time against attempts by the labels to try to forcibly raise online music sales.

Re:clarify this paragraph:

[VoxCombo]

Heck, if the music companies were found to be colluding by charging $15+ per CD years back (they were), what are the chances they are doing the same now when the per-tune cost remains the same as distribution costs drop?

If I may clarify this......The labels were sued not for the price of CDs, but for their minimum advertised price policy. Basically, when Best-Buy and Wal-Mart were using CDs as loss-leaders to bring consumers into the door, the labels tried to slow this with a MAP policy. The labels didn't tell those stores how much to sell CDs for, they just wanted to forbid advertising prices that low, for fear that it would drive small record stores out of business and hurt the availability of non-hit recordings (best-buy and walmart mostly only stock the "hits".

MAP policies are very common among individual companies in many industries, but the courts found that since the labels were doing it together through an industry association (RIAA), that the practice was illegal.