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Antitrust Case Against RIAA Reinstated

Posted by kdawson on from the collusion-and-restraint dept.

NewYorkCountryLawyer writes "After Starr v. SONY BMG Music Entertainment was dismissed at the District Court level, the antitrust class action against the RIAA has been reinstated by the US Court of Appeals for the Second Circuit. In its 25-page opinion (PDF), the Appeals court held the following allegations sufficiently allege antitrust violations: 'First, defendants agreed to launch MusicNet and pressplay, both of which charged unreasonably high prices and contained similar DRMs. Second, none of the defendants dramatically reduced their prices for Internet Music (as compared to CDs), despite the fact that all defendants experienced dramatic cost reductions in producing Internet Music. Third, when defendants began to sell Internet Music through entities they did not own or control, they maintained the same unreasonably high prices and DRMs as MusicNet itself. Fourth, defendants used MFNs [most favored nation clauses] in their licenses that had the effect of guaranteeing that the licensor who signed the MFN received terms no less favorable than terms offered to other licensors. For example, both EMI and UMG used MFN clauses in their licensing agreements with MusicNet. Fifth, defendants used the MFNs to enforce a wholesale price floor of about 70 cents per song. Sixth, all defendants refuse to do business with eMusic, the #2 Internet Music retailer. Seventh, in or about May 2005, all defendants raised wholesale prices from about $0.65 per song to $0.70 per song. This price increase was enforced by MFNs.'"

1 of 163 comments (clear)

  1. RIAA has stopped Sueing by rwv · · Score: 0, Troll

    Don't jaywalk kids because the RIAA will come get you.

    The RIAA announced that they were terminating their practices of filing hundreds of civil lawsuits so your jaywalking children should be okay.

    Is this article the evolved version of the RIAA's anti-consumer tactics? It's not clear from the summary, but the way I read this is that the RIAA is evil because mimimium song prices are being raised from $0.65 to $0.70. Can't this increase (approximately 7%) be explained by typical inflation and justifiably be expected every two years? I'm not sure why this story is so evil.