Music related newsgroups report that a New York court today reinstated an antitrust lawsuit against music giants EMI, Sony, Universal and Warder for illegal price fixing on digital music. The same newsgroups report that the judge said there was evidence that “plausibly suggest” that the labels keep the prices artificially high through collusion.
Newsgroups point out that the case was filed on behalf of people who download music online. The court case accused the music label defendants of conspiring to fix prices and limit the availability of downloaded music in violation of the Sherman Act; a federal antitrust law.
The case was originally put aside for dismissal in October 2008. With evidence supplied by a still forming class action lawsuit, it provides proof that the labels conspired to fix prices by creating joint ventures for distributing songs — MusicNet, launched by Bertelsmann, EMI and Warner Music; and pressplay, launched by Sony and Vivendi’s Universal Music Group — and the entering of restrictive license agreements.
Originally, the lawsuit raised concern and accusations that these major record labels were using early deals and licensing agreements to artificially create an inflated raw cost of 70 cents per track that was then enforced at deals with other stores. Labels defend themselves stating that the shift was necessary to spur demand for their back catalog and to generate more profit from their most recent music.
With the current ruling, the original plaintiffs have more time to organize a larger class action lawsuit against the labels and further raising funding to afford the inevitable long drawn out legal fees that this involves. Many on music newsgroups find this to be a victory for online music store subscribers after a long history of suspicion has hung over the labels for various types of price fixings.