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Music Download Pricing Lawsuits Pending? 176

Posted by CowboyNeal
from the trouble-brewing dept.
larry bagina writes "New York Attorney General Eliot Spitzer has subpoenaed Warner Music Group, apparently looking into allegations of price fixing with Sony/BMG, EMI, and Vivendi, and apparently more subpoenas are in the pipeline. 'As part of an industrywide investigation concerning pricing of digital music downloads, we received a subpoena from Atty. Gen. Spitzer's office as disclosed in our public filings. We are cooperating fully with the inquiry.'"
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Music Download Pricing Lawsuits Pending?

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  • by Catamaran (106796) on Saturday December 24, 2005 @11:56AM (#14332314)
    remember downhillbattle [downhillbattle.org] and EFF [eff.org]. They are fighting for your rights.
  • by yagu (721525) * <[moc.liamg] [ta] [ugayay]> on Saturday December 24, 2005 @11:57AM (#14332319) Journal

    Who'd have thunk it, the music industry being crooked? So, who are the pirates now?

    It does seem maybe these (alleged) crooks may be losing their grip on the industry: getting caught with their hand in the pricing cookie jar, and potential other investigations into payola (the other way they control the flow and exposure to music/artists).

    Disclaimer: I know, innocent until proven guilty, but with the propensity and willingness of these (alleged) crooks to string up the customer like so many Christmas (Merry!) lights, publicly indicting/convicting consumers before trial. How's the shoe feel on the other foot? Maybe there really is a Santa Claus(e)!

    • Innocent until proven guilty is a legal construct.

      "Alleged murder" is not a crime. "Murder" is.

      One of the main reasons we (as a society) go along with the fiction of "innocent until proven guilty" is to avoid prejudicing the potential jury pool.

      Anyways, those two linked articles are very light on details.
      • I really don't know what the point of your post is supposed to be. Just seems like a lot of wordplay and stating the obvious to me.

        "Alleged murder" is not a crime. "Murder" is.

        "Alleged murder" isn't exactly a crime, but alleged "murder" certainly is.

        One of the main reasons we (as a society) go along with the fiction of "innocent until proven guilty" is to avoid prejudicing the potential jury pool.

        No, it's because our justice system requires proof to be establish in court, as opposed to being assumed before

    • You really have to wonder is AG Spitzer working on behalf on Apple Computer to stop the RIAA from trying to impose tiered-level pricing of music downloads on the iTunes Music Store....
      • Spitzer is working for himself and his ambitious political future. Using the consumer protection aspect of his office he's attacking big business via a multitude of lawsuits extending outside the state boundries. He could care less about Apple or the rights of music buyers for that mattter, whatever garners his office and name the most press clippings.
    • Everyone of us!

      This is what we have said all along: "Reasonably priced (according to cost, not to traditional prices and unencumbered by nasty DRM schemes, we are willing to pay for music"

      If this indictment goes forward, it might give honest distributors the occasion to prove the point. The cost of downloading a song on the Internet is pennies. Even considering a decent profit, a reasonable pricing will do wonders to discourage pirating. The value is there for the consumer and the business model is simp
    • Innocent until proven guilty only applies in Criminal Lawsuits. This is a Civil lawsuit, and they are only innocent till "sufficiently indicated" guilty :-p

      IANALY (I am not a lawyer yet)
      • IANAL, but I thought Criminal Lawsuits determined whether the defendant was Guilty or Innocent. I thought Civil Lawsuits determined whether someone was Liable or Not Liable. . .
    • The music recording and distribution companies have come to the end of their usefulness. They are like dinosaurs in the space age.

      Because recording and distribution has now been commoditized by the internet, there is no need for a "Recording and Distribution" specialized commercial function between the music artists and their fans and customers.

      Don't you think that the recording industry sees that reality, and when anything is fighting for it's life, like the music Recording Industry is, there are "no hold
    • Warner and the other music majors are attempting a "price squeeze". The major labels control the music rights and also sell music CDs to consumers. iTunes and other online retailers need a music license from the majors to compete, uh, against the majors. So what do the majors do? They charge a high price to the online retailers so that the Internet music prices are high. Therefore, the majors get to hold onto their old-school business. Innovation in the form of Internet delivery is stymied. The fact that th
  • Does he even have jurisdiction for this? Isn't this a federal matter?

    -jcr
  • by Furd (178066) * on Saturday December 24, 2005 @12:01PM (#14332335) Homepage

    Pricing of Downloaded Songs Prompts Antitrust Subpoenas [nytimes.com]

    The New York attorney general, Eliot Spitzer, is investigating whether the four record companies that dominate the industry have violated antitrust laws in the pricing of songs that are sold by Internet music services, according to people involved in the inquiry.

    Mr. Spitzer's office recently began serving subpoenas on the major record companies - the Universal Music Group, a unit of Vivendi Universal; Sony BMG Music Entertainment, a joint venture of Sony and Bertelsmann; the EMI Group; and the Warner Music Group, according to people involved.

    Warner Music disclosed yesterday in a regulatory filing that it had received a subpoena on Tuesday in connection with "an industrywide investigation" into whether the companies colluded in the pricing of music downloads.

    Representatives for Warner and Sony BMG said their companies would cooperate with the investigation. Representatives for the other major companies could not be reached or declined to comment.

    • by TubeSteak (669689) on Saturday December 24, 2005 @12:27PM (#14332440) Journal
      Well... the part you quoted brings no new information to the table.

      I'm not sure why both the nytimes and the latimes bring up Apple & iTunes unless they're trying to suggest that the music companies are being investigated for colluding on the (future) wholesale prices of tracks they'd like Apple to sell.
      The "industry-wide" investigation likely centers on whether the four major record labels colluded to set the pricing of song downloads on iTunes and other online music stores. Currently, songs are usually priced at a flat 99-cent rate, but the industry has pushed for higher prices.
      A Different Article [betanews.com]

      I wonder if those music studios have industrial strength paper shredders or full fledged burn rooms at their corporate headquarters?
  • by hkmwbz (531650) on Saturday December 24, 2005 @12:03PM (#14332346) Journal
    ...so I'll take a chance and say this:

    Dear recording industry: Ha! Merry Fucking Christmas, motherfuckers!

  • by crimguy (563504) on Saturday December 24, 2005 @12:06PM (#14332360) Homepage
    at the online music stores. My thought is that the music companies want this investigation, because they in fact want to sell music for more money, but are being prevented from doing so by yahoo, itms, etc. So, Spitzer might be working for them this time.
    • by Shoten (260439) on Saturday December 24, 2005 @01:09PM (#14332573)
      I think you don't understand what "price fixing" means, in terms of the Sherman Anti-Trust act. It doesn't mean that a vendor can't set their OWN price for something...how else would they operate? It means that multiple companies in an industry (that are competitors with each other) can't collude to agree on prices. The point is that if all of these companies get together and say, "Yeah, I won't give iTunes access to our music if you don't give them access to your music, and he doesn't either, except if they agree to our pricing model" then the competition between them is reduced to a cartel. As a result, a de facto monopoly results, which is bad for consumers.
      • As a result, a de facto monopoly results, which is bad for consumers.

        Ah yes, bad for consumers. What's funny, I think, is that in places where there are no price fixing laws, the whole thing goes out the window.

        Anyone ever wonder why Japan's no longer the leader in CPU manufacture? They all price fixed in the late 80's/early 90's and dumped their chips on the market in an effort to kill the American competition.

        What ended up happening is they ran out of money, raised the prices expecting high returns, and w
        • I disagree (somewhat) with your comparison. CPUs are not unique, while any particular song is (or should be in theory!) unique.

          However, I suspect that you have a good point about price fixing ultimately driving the colluding businesses out of business. The recording industry has been in a slump that predates the p2p phenomenon. They've been under increasing pressure not so much from p2p but from competing forms of entertainment (and thus disposable income). Video games comes to mind. I suspect that the grow
      • I'm a consistent supporter of Apple, so let's just get that out in the open.

        What's going to be interesting is how the logic plays out on this. Initially, the labels don't appear to have colluded - Apple went to them. Apple can state what wholesale price they will accept will be - retailers do this all the time - especially WalMart. Since there effectively was no wholesale price for music - yes, some smaller labels, etc. then the iTMS price wasn't so much collusion as reaction to the only standard put forwar
        • That could be an intent to price fix - especially if they are pressuring other labels to join or boycott Apple or other retailers.

          You've hit the nail on the head. I believe Bronfman, head of Warner, has already intimated that Apple would have to submit or risk the big players in the recording industry shutting them out.

          The other place is ringtone pricing which I understand labels have a different unified wholesale price for. Since these are essentially the same product in slightly different contexts, it cou
    • If by price fixing you mean the iTMS negotiated a price that everyone else copied, then no, that's called market economics. If you mean price fixing when the different organizations collude and say, "The iTMS has too much power, let's all hold out on Apple until they agree to raise prices", then yes, they would be guilty of price fixing.

      Apple's success is not called price fixing, any more than the iPod's success SET the price for all competitive mp3 players; too expensive, and you aren't competitive. Too ch
    • by twitter (104583) on Saturday December 24, 2005 @01:20PM (#14332612) Homepage Journal
      the music companies want this investigation, because they in fact want to sell music for more money

      If they get together, say so, agree on a price structure and then find ways to exclude competitors, they have committed a crime. This is what price fixing and anti-competitive practices are all about. Everyone pays so a select few can profit. Artists and others who would make a living in the industry pay more than anyone else.

      It's obvious that such a crime has been and continues to be committed. The cost of an electronic copy of costs more than the same with delivered by physical media. In a free market music can be had for a song. Those that would compete are locked out of traditional broadcast and physical distribution. They are also harassed at every point possible by lawsuits and bogus laws which make operations difficult and expensive. The world's three big music publishers seek to impose all the restrictions of physical media and 100 year old broadcast technology law onto the internet because they won't exist without them. The ultimate crime are laws seeking to "close the analog hole". It's nice to see some of the smaller crimes looked into, but a review of "price fixing" misses the big picture.

      Spitzer might be working for them this time.

      That depends on how deep he goes.

  • by izx (460892) on Saturday December 24, 2005 @12:07PM (#14332362)
    Arguably he's done it to boost the public's impression of him, but at least he's done something real good to do it unlike latching on to divisive issues. He's punished so many crooked corps: Wall Street, insurance, payola, and now the music companies again. Here's a profile: Wikipedia Profile [wikipedia.org] The consumers will lose a great public advocate when he goes on to become Governor (although one hopes he'll use his clout there to do even more reform.)
    • by Anonymous Coward on Saturday December 24, 2005 @12:42PM (#14332489)
      It's difficult to not admire the tenacity and inginuity with which he pursues these people. But it's also difficult to make the case that they are punished in proportion to their transgressions. Steal hundreds of millions, but you'll have to give millions back. Where is the disincentive? Collude to steal billions, and be forced to offer rebates that customers won't take wide spread advantage of because we've got to make it convienent for the criminals. These people who do economic harm on this scale, they need to lose everything and spend everyday of the rest of their lives in a very deep, dark, lonely, empty hole. That's disincentive. But to think, we live in an age when half-measures from politicians are genuinly deserving of praise. It's sad.
    • by Starker_Kull (896770) on Saturday December 24, 2005 @01:01PM (#14332546)
      While I like some of the things he has done, he also can be a grade-A asshole. He decided that AIG, the Starr Foundation, Hank Greenburg, and a few others responsible for building up AIG over the last 40 years were criminals, and so prosecuted them to get evidence for his suspicions.... and he is still looking for that pesky evidence, and gosh darnit, he hasn't found it yet. AIG has restated their earnings for the last 5 years (which is a massively big deal, for those of you who don't know), and in doing so, changed their estimated net worth from about 81 billion to 79 billion. Whooo-fucking-hooo. He is now trying to investigate transactions made between AIG and the Starr Foundation going back to 1967 in order to find something to justify the ruining of the lives of lots of people at those companies.

      Don't get me wrong - I hate abuses by large corporations, and I think he has done many good things to protect consumers. But he has a large ego, and doesn't know when to quit. I think he was hoping AIG was the next Enron, and when it turned out it wasn't even close, he got vicious and couldn't let it go, despite the fact he is hurting a lot of innocent people in the process. Of course, I am a bit biased, since I personally know some of the people whose careers he has ruined and finances he has messed up.

      He's better than many, but he ain't no saint.
      • AIG has restated their earnings for the last 5 years (which is a massively big deal, for those of you who don't know), and in doing so, changed their estimated net worth from about 81 billion to 79 billion. Whooo-fucking-hooo.

        Hey dumbass, that's TWO BILLION DOLLARS.

        I know if I was a shareholder of AIG I would be rightfully pissed.

        Lying about the worth of the company is one step away from actually stealing two billion dollars.

        I think he was hoping AIG was the next Enron, and when it turned out it wasn't e
    • Drunk on the power of his office, and vindictive. Here's a nice little interaction he had with a former chairman of Goldman Sachs:

      Last April, The Wall Street Journal published an op-ed piece by me titled "Mr. Spitzer Has Gone Too Far." In it I expressed my belief that in America, everyone -- including Hank Greenberg -- is innocent until proven guilty. "Something has gone seriously awry," I wrote, "when a state attorney general can go on television and charge one of America's best CEOs and most generous phil
    • It interesting, he's one of the few AG's to go after white collar criminals with any vigor. The stock research stuff was so obvious, they kept on hyping it, but it was basically sales literature. His point (correct I think), was that you can hype stuff, just don't dress it as independent research.

      The music companies claim they are trying to help the consumers. Forced to pick between them and itunes (who released an honestly useful app with reasonable DRM) I'd pick apple in a heartbeat.
  • price fixing? (Score:3, Informative)

    by pintomp3 (882811) on Saturday December 24, 2005 @12:14PM (#14332392)
    wouldn't be the first time http://www.usatoday.com/life/music/news/2002-09-30 -cd-settlement_x.htm [usatoday.com] I remember a case back in the late 90's where I got a small check.
  • by DocStoner (236199) on Saturday December 24, 2005 @12:17PM (#14332404)
    Maybe he really doesn't care about the little guy. Maybe he spent too much on the family this year for Xmas, owes his bookie or maybe he's just looking for some extra cash. He could just be doing this to get a secret payoff. The case will suddenly disappear. He won't find anything worth charges, just some suspicious/questionable items,enough for some hush money.

    BTW, I got to open one of my Xmas presents early. The wife and kids made me a brand new tin-foil hat.
  • by Anonymous Coward on Saturday December 24, 2005 @12:19PM (#14332419)
    there's no mention of this in the bible, music downloads are just a theory of atheist scientists
  • FTC Site (Score:2, Interesting)

    by earthstar (748263)
    Snapshot:
    According to the FTC complaint detailing the charges, in 1997, Warner and PolyGram (predecessor to Vivendi Universal), two of the largest music distribution companies in the world, formed a joint venture to distribute compact discs, cassettes, videocassettes, and videodiscs to be derived from the next public performance of The Three Tenors. Warner would distribute the 1998 releases in the United States, and PolyGram would distribute the 1998 releases outside of the United States. As the concert da
  • by Anonymous Coward on Saturday December 24, 2005 @12:29PM (#14332448)
    You know, the one where they got fined and then CDs still cost the exact fucking same?
    • Not at all ... they all just happened to set the exact same prices at the same time. Purely coincidental, you know.
    • Right; that judgement was a win for Wal-Mart and Best Buy. Wal-Mart and Best Buy went to the government when Universal was handing out program money (funds for newspaper advertisements and the like) to Tower Records and TWE in return for setting MAPs (minimum advertised prices). The only result was that the record companies ended their MAP programs. You only theoretically saved money if you'd bought CDs at Tower Records.

      Many Slashdotters are under the impression that the price fixing settlement was a w

  • by segfault_0 (181690) on Saturday December 24, 2005 @12:31PM (#14332458)
    Might want to ask yourself who Spitzer works for, new yorkers or the record companies. Have you noticed a pricing change in CDs since his initial win? I havent - they still cost way too much. A few million bucks is nothing to these people, i say they are getting off way too cheap and then can hide behind these weak settlements if the questions ever come up again. If i was a record company i would be overjoyed to see this guy coming. So what benefit does attention to online music pricing give to record companies; Steve Jobs doesnt want to change itunes prices - be funny if he was ordered to in court wouldnt it...
  • And if they are convicted/found guilty of price fixing the lawyers and gov will get the bulk of any monetary settlement and we as the end consumers will probably end up with a coupon for $5 or $0.50 off the purchase to any of their already over priced CDs, either way they get your money. It's time for some creative sentencing, the price should be lowered by the difference between their fixed price and the market value. 99c has been the market value since the creation of iTunes, they wanted to fix prices at
  • by Stan Vassilev (939229) on Saturday December 24, 2005 @12:47PM (#14332505)
    ... wow. While I'm ok with this partilcular lawsuit, when's the last time you woke up and check the news and didn't see few new gigantic lawsuits happening every damn day?

    Is it just me, or we have waaay too much lawsuits going on here. I mean, lawsuits are supposed to be the exception, and the regulator is supposed to be the law with the help of a possibility for lawsuit.

    Today, we just have a bunch of lawsuits from people raping the system, and no benefits. For how long can the system sustain this?

    You know this is millions of people giving part of their wage for lawyer/lawsuit expenses. You have to work more and get less, so that all those lawsuits can happen. Directly or indirectly.

    God damn it everything is so wrong.

    **head explodes**

    • Ideally, suits should be the exception, not the rule, as you say.

      The problem is, lawsuits are a financially better alternative than following the rules for everyone but the consumer.

      Until penalties for breaking the rules are made worse than the cost of a lawsuit, companies will break the rules - they look at fines as the price of getting to break the law. Engage in any unethical and illegal behavior you want - make a billion dollars, get fined at most a few million.

      And then we have class action lawsuits. Id
  • The future isn't in people charging for things like content, it is for people charging for things like service. For some sectors that offer service value (like Linux) that is good - for other sectors (like music and movies) - that have littlemore than entertainment value, that is bad. And as for those who rely on a content revenue stream now, they are DOA. It's sorta unfair, because everyone crys kneejerk tears for all the "poor" folks in the content industries, but doesn't even give a ratts ass about
    • The future isn't in people charging for things like content, it is for people charging for things like service
      What do you think the music industry is providing? Services of course! They artist write and perform. The studios record. The labels distribute. The point is that there is no product. Entertainment is solely a service. This is why the cost is so low. There are fixed costs, like equipment to buy, and training to be had, but the variables costs tend to be very low

      So the question is how muc

      • Giving a concert to thousands and thousands of people is a service, controlling content distrubition on millions and millions of internet hosts to preserve a media distribution revenue stream - is not offering a service, even though it is technicaly part of the white collar service sector. The content industries are not only overvalued, they are WAY overvalued. In fact, if every one of them were kidnapped by space alians and brought to a different galaxy, our economy probably wouldn't even notice. Our r
    • For some sectors that offer service value (like Linux) that is good - for other sectors (like music and movies) - that have littlemore than entertainment value, that is bad.

      Sociologists have been talking about for a while how how we are/have shifted from the industrial age to the information age, and that we are going away from "goods" to "services". Goods are automated. Services provide the distribution of the goods along with the distribution of information.

      The only strange thing about all of this, is h
      • Money is no longer real. Its simply printed and/or blipped on computers. It is not backed by gold or silver like it used to be. The money holders (banks) hold less and charge people for giving it away (service) and they don't even own anything besides nice buildings (although that is changing). Its pretty much a crime to own a decent amount of cash money for some reason.

        You know, I was reading that just as I was thinking if there was ever a kind of way that I could give a christmas present to people I do

  • by Polarism (736984) on Saturday December 24, 2005 @01:02PM (#14332551)
    Let's stuff a bunch of bullshit into an already bullshit-clogged legal system.

    Seriously, the only way our problems with the recording industry are going to be solved is if they change their business model to reflect the 21st century. Until then, it'll just be the same old shit over and over again. Our legal system is warped beyond belief, so it's not going to help anyone here.
  • by HangingChad (677530) on Saturday December 24, 2005 @01:07PM (#14332566) Homepage
    ...until the Attorney General shows up.

    I wonder why, considering we have more than one state, that it's always New York taking the lead to try and give consumers an even break? He went after the mutual fund timing trades, record company payolla, and now more record company misbehavior. California also went after Edward Jones. California and New York the only states sticking up for consumers instead of standing by and watching consumers get the sticking.

  • is the fucking man. This man should be President.
  • by merc (115854) <slashdot@upt.org> on Saturday December 24, 2005 @01:32PM (#14332648) Homepage
    I've solved the problem on my end.

    I don't buy music anymore.

    I can live without it -- the real question is, can they live without my money? The answer to that one is probably also "yes", but that's okay. I'm not out to destroy them, I just don't want to be a supporter of their industry anymore.
    • For those of us music enthusiasts: Do you still listen to new music? or have you decided that 'what I have is good enough forever'?

      Personally, I can't get enough new music. Most of it is independent (which is great), but many of them end up signing with larger labels that I must purchase from. The music industry is not going to change their ways with a few abstaining "informed citizens" (what a novel idea). The problem is, the music industry needs to shave off the top few layers of the money pyramid. Then
  • by cnerd2025 (903423) on Saturday December 24, 2005 @01:33PM (#14332653)
    So here goes
    For a show called, "10 types of people"

    Start spreading the news.
    I'm leaving today!
    I want to be a part of it,
    New York, New York!
    I want to wake up
    In a city that doesn't sleep!
    I'm a consumer with rights
    I want my fair price!
    And no price fix-iiing!

    No DRM crap
    For me in New York
    I really love that Eliot
    Spitzer, Spitzer!
    Oh Mr. Spitzer,
    Please remove that Sony Rootkit!
    And give my music to ME
    Without some greedy
    Hollywood scheeeeeme!

    In Manhattan and Queens
    And Bronx if I dare
    My iPod has cheap music
    Bought in New York
    We told that Warner
    To stop screwing the litttttle guy!
    "You have to set a fair price!
    No fixing or die,"
    Said Spitzer, Amen!

    Eliot Spitzer
    We love you so much
    New York is fair and balanced
    Because of yooooou!
    We want to thank you
    For protecting consumer rights
    We really love you a lot
    In-a straight kinda way
    We're really not gay!
  • by Lead Butthead (321013) on Saturday December 24, 2005 @01:56PM (#14332734) Journal
    ... we received a subpoena from Atty. Gen. Spitzer's office ... We are cooperating fully with the inquiry.
    Translation: We're busy shredding incriminating documents at the moment.
  • when you can do what the insurance companies do and just report your upcomming rates to everyone. Then everyone can raise their prices at the same time, nice and legal.
  • You must be kidding, they would never do that..

    *yawn*. nothing to see here but the consumer getting screwed yet again.
  • New York Attorney General Eliot Spitzer has subpoenaed Warner Music Group

    I'm really liking this guy!

  • Hypocrisy! (Score:3, Insightful)

    by Nom du Keyboard (633989) on Saturday December 24, 2005 @06:45PM (#14333686)
    Currently, songs are usually priced at a flat 99-cent rate, but the industry has pushed for higher prices.

    And what happens when higher prices cause less people to download from pay sites? The music industry claims that every download is a lost sale. So is this intended to create more lost sales? If you can't get your fully inflated price, then you won't take any price? That kind of thinking only made sense when you actually did mostly control the only source of supply. Then along came the cassette deck recorder and your lives have never been the same since.

    People are obviously stupid in so much as they continue to support the music industry at its present prices (I remember when CDs first came out the promise was that as manufacturing efficiencies increased that prices would actually drop significantly), but even stupid people reach a point where they know they're being ripped off -- and don't like it!

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