Record Label Price fixing?

Friday, March 3, 2006
DOJ Investigating Online Music Price Fixing

Vivendi Universal, Sony BMG, Universal Music Group and Warner Music Group are being investigated by the Department of Justice for possible collusion in setting prices for online music, the Wall Street Journal reports today.
DOJ spokeswoman Gina Talamona tells the WSJ that antitrust agents are "looking into the possibility of anticompetitive practices in the music-download industry." All four label groups have reportedly received or will soon receive "civil investigative demands" from the DOJ seeking information; the matter does not appear to be a criminal investigation.
New York Attorney General Eliot Spitzer launched a similar probe in December of last year, sending subpoenas to all four major label groups in an attempt to find out if they colluded on setting wholesale prices for digital music. Most digital music — including songs sold on Apple's wildly popular iTunes service — sells for 99 cents a song, and online music retailers are believed to pay wholesale prices of 60 to 70 cents per song.
An EMI representative told R&R that the company had not received a subpoena as of this morning and declined to otherwise comment on the matter. R&R's calls to Sony BMG, Universal and Warner Music Group were not immediately returned.