Music price fixing trial moves one step forward

Four US music studios must face an antitrust lawsuit filed against them after the Supreme Court ruled it wanted the case to move forward as planned. Sony Music Entertainment, Universal Music Group, Warner Music, and the EMI Group hoped an appeal would toss out the lawsuit focused on Pressplay and MusicNet -- but the case will continue in 2011.

In the Sony Music Entertainment v. Kevin Starr case, the record labels are accused of intentionally setting a wholesale music download price near 70 cents -- even though competitors were offering music at lower prices. Furthermore, there was also concern from the Supreme Court because of the lowering cost of digital music, even though prices continued to dramatically increase.

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"Both the joint ventures and the Recording Industry Association of America ("RIAA") provided a forum and means through which defendants could communicate about pricing, terms, and use restrictions," according to the lawsuit.

The court ruled that consumers would have been forced to pay $240 per year to subscribe to both music services -- and DRM was included in both programs.

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A federal judge dismissed the case in 2008, though an appeals court eventually ruled that there was enough evidence and facts to move forward. Not surprisingly, the record labels filed an appeal and wanted the Supreme Court to rule on the controversial matter.

The lawsuit also accuses the four companies of making it harder for music customers to transfer music files to MP3 players. Both MusicNet and Pressplay prevented users from transferring music files (protected under DRM) to MP3 players and portable electronics.

It’s ironic that the same music industry that complains about music piracy and declining revenue is now caught in a legal issue like this one.

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