Report: Judge Dismisses Label Collusion Charges
November 12, 2008 at 11:27 AM (PT)
A federal judge has strongly dismissed claims that major labels conspired on digital music pricing levels, according to court documents obtained by DIGITAL MUSIC NEWS. The decision was issued by U.S. District Judge LORETTA A. PRESKA for the Southern District of NEW YORK in OCTOBER, and recently unsealed.
The charges came from a consolidated group of consumers, all of whom alleged that the majors had unfairly colluded to establish certain price floors on digital content, specifically paid downloads. The group also pointed to collusive agreements designed to artificially raise the price of CDs.
The consumer group alleged that majors SONY MUSIC ENTERTAINMENT, UNIVERSAL MUSIC GROUP, EMI MUSIC and WARNER MUSIC GROUP used joint ventures and third-party agreements to maintain elevated wholesale prices on paid downloads. That floor, 70 cents per a la carte download, is now a widely-known wholesale price point within the industry.
But the charges were firmly denied. The Southern District is among the most influential federal district courts in the UNITED STATES and the decision undoubtedly cools further challenges. "The court did not toss this case out lightly, but with great force," entertainment attorney WILLIAM HOCHBERG told DIGITAL MUSIC NEWS.