Music Labels To Face Price-Fixing Lawsuit

The U.S. Supreme Court cleared the way today for a class-action price-fixing lawsuit against the four major record labels to proceed to trial.

The lawsuit, originally brought by consumers five years ago, alleges that the labels conspired to set artificially high prices for digital music. Specifically, the consumers complained about the label-run subscription services MusicNet and Pressplay, which not only cost $240 a year but also allegedly offered tracks bundled with digital rights management software that prevented users from transferring music to iPods. The consumers also alleged that the labels conspired to sell tracks to retailers at 70 cents per song, noting that eMusic (which sells music owned by independents) charged consumers just 25 cents per track.

In 2008, the record labels convinced a trial judge to dismiss the case before trial, but the 2nd Circuit revived the matter last year. In today's ruling, the Supreme Court let that decision stand.

If the antitrust allegations are true, it's yet another example of the record industry's notoriously poor strategic response to the Web. And, while the issues might not be legally related, it's certainly ironic that the major labels might have been violating antitrust law at the same time that they were aggressively pursuing copyright infringement cases against tens of thousands of music fans who allegedly shared tracks on peer-to-peer networks.



Meantime, the fact that this lawsuit can now proceed should make all other content owners -- including newspapers and TV studios -- think very carefully before forging joint ventures that could involve charging consumers for content.

2 comments about "Music Labels To Face Price-Fixing Lawsuit".
Check to receive email when comments are posted.
  1. Chuck Lantz from, network, January 10, 2011 at 9:39 p.m.

    If they're found guilty, may I suggest a fine comparable to the fines demanded by the RIAA of file-sharers who were also convicted?

    Something along the lines of 500 billion dollars would suffice, give or take a billion or two.

    Fair's fair, right?

  2. Gabrielle Jackson from Conversis, January 11, 2011 at 3:23 a.m.

    There's no doubt the music industry needs to collaborate in order to find a viable business model for the future, but this is surely not the way. We all love music and recognise that artists needs to be paid for their creativity but these artists are not being served well by the music industry as it stands today. It's time we saw some real leadership and brave decisions instead of scaremongering and hypocrisy.

Next story loading loading..