Department of Justice opens probe into online music pricing

March 3, 2006

DamnedIfIknow used our news submit to tell us "Colluded"? Impossible! Will be interesting to see their books, but one wonders how long it will take before the record labels get their "schills" in Congress to intervene and make their behavior legal."

This story is a good one and it always is interesting to see those that accuse others of criminal acts, thrown under the spotlight. This time around, we are going to get to follow an investigation by the Justice Department, that will investigate price fixing of online music among the labels. It is interesting to note, that subpoenas have been issued in light of the new pricing probe and it's already reported that Sony/BMG have received theirs.

One music industry source said some subpoenas may have been issued already in connection with the probe, while other labels had been tipped off that subpoenas would likely be coming in the next few days.

It appeared that Sony BMG had already received a subpoena, the second industry source said.

The major record labels are Warner Music Group, EMI Group Plc, Vivendi Universal's Universal Music Group and Sony BMG, a joint venture of Sony Corp. and Bertelsmann Ag.

Executives from the labels were not available or declined to comment. A spokeswoman for the DOJ was not immediately available for comment.

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In late December 2005, Warner Music Group disclosed in a U.S. Securities and Exchange Commission filing it had been subpoenaed by Spitzer in connection with an antitrust investigation into the pricing of digital music downloads. The two music industry sources on Thursday said the DOJ's probe appeared to be focused on the same issues, which included whether the labels colluded to set wholesale pricing for song downloads.

Another scandal is the last thing Sony needs and no amount of PR spin, that the music division is separate from the whole, will help the already damaged Sony image. It's the same pair of pants, the money is just in another pocket! The mere mention of being named in the probe is bad enough, if however, they or any of the labels are found guilty, it is going to get ugly. Those of you interested, may wish to visit this Reuters link to read the article in it's entirety at it's source.

Source: Reuters