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Record Labels Settle Antitrust Lawsuit With U.S.

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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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