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Anti-Trust Lawsuit Against Major Labels For Price-Fixing Music Downloads Reinstated…

Wall Street Journal:
U.S. federal appeals court on Wednesday reinstated an antitrust lawsuit against the major record labels over alleged price-fixing of Internet music downloads….In an order Wednesday, the U.S. Second Circuit Court of Appeals overturned a lower court’s decision dismissing the case, saying an amended consolidated lawsuit in the case stated enough of a factual claim to be allowed to proceed….Defendants in the suit include EMI Music North America, Sony BMG, Bertelsmann, Universal and Warner The case, which consolidated a variety of state and federal lawsuits first filed in 2005 and in 2006, alleged the major record labels in the U.S. conspired to inflate and maintain the price of digital music, in part by fixing a high price and restraining the availability of Internet downloads….The price-fixing allegedly occurred when record labels controlling more than 80% of the market created two joint ventures to distribute music over the Internet and through their business dealings with third-party licensees.
The plaintiffs contended that record labels entered into joint ventures and licenses that had the effect of creating artificial price floors for downloaded music….They also said that when competitors started to distribute the labels’ music, the defendants “agreed” to a wholesale floor of about 70 cents per song, which were enforced in part through restrictive license agreements. Writing for a three-judge panel, Circuit Judge Robert Katzmann said the plaintiffs’ allegations are “sufficient to plausibly suggest” a conspiracy to fix prices.