|Labels and Retailers Settle CD Price Fixing Suit For $143,100,000|
|Home Theater News Music - Software News|
|Written by Jerry Del Colliano|
|Tuesday, 01 October 2002|
A suit brought against the big five music conglomerates and a handful of the largest music retailers over price fixing has been settled for a groundbreaking $143,100,000. The judge ruling over the case has yet to approve the deal. The crux of the argument against the labels and retailers was that the media conglomerates and retailers agreed to illegally inflate the cost of CDs from 1995 to 2000 resulting in serious claims of anti-trust and price fixing.
The terms of the deal split the settlement with $67.3 million for cash to pay back consumers and 5.5 million Compact Discs valued at $75.7 million which will be distributed to state music schools and educational programs.
The labels involved in the suit include Bertelsmann Music Group, Warner-Elektra-Atlantic Corporation, Sony Music Entertainment, EMI Music Distribution and Universal Music Group and music retailers Musicland, Trans World Entertainment and Tower Records. All have agreed to settle.
This news is another blow to the music industry during a prolonged U.S. economic recession where industry groups and media companies blame piracy and every other possible factor other than their own actions for their second year of slumping sales. Perhaps if CDs were sold at lower prices, some of the 50 plus million people who downloaded Napster would have been buying records instead of downloading files.
Source: CNN.com, eonline.com