Author Topic: Record Labels Settle Antitrust Lawsuit With U.S  (Read 427 times)

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Record Labels Settle Antitrust Lawsuit With U.S
« on: September 30, 2002, 09:42:02 PM »
The five top United States distributors of compact discs and three large music stores have agreed to pay $143 million in cash and CD's to settle charges of price fixing authorities announced yesterday (September 30.)

Bertelsmann Music Group, EMI Music Distribution, Warner-Elektra-Atlantic Corporation, Sony Music Entertainment, Universal Music Group, Trans World Entertainment, Tower Records, and Musicland Stores, a division of Best Buy Co. Inc. each agreed to the terms of the settlement, which was filed by Attorney General's of 41 states in the U.S. who said that the record companies conspired with distributors of music to boost prices of CD's between 1995 and 2000.

The lawsuit claimed that the majors, who were upset with the low prices charged by some retail stores, acted together with major chain stores to set CD prices at a minimum level, thus raising the prices consumers paid for CD's.

The lawsuit said that the labels broke state and federal antitrust laws, which cost consumers millions of dollars. Consumers who bought CD's between the time from of 1995 to 2000 can file claims to be compensated prosecutors said. Public Service Announcements will be produced to inform consumers on how to file the claims.

5.5 million CD's valued at almost $80 million dollars must also be distributed to public companies and nonprofit organizations in each state to promote music programs.

"This is a landmark settlement to address years of illegal price-fixing,'' New York State Attorney General Eliot Spitzer said. "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.''

Despite settling, the major labels completely denied any wrong doing. "We have made a business decision to settle these matters and avoid continuing with expensive and protracted litigation," Warner-Elektra-Atlantic said. "The settlement made sense to us from a business perspective, and enables WEA to put this matter behind us.''

Trans World Entertainment spokesman John Sullivan added, "We were wrongly accused and nobody admitted any wrongdoing.''



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