Audio Video News

Have the major labels colluded to fix the price of downloads at a minimum of 70 cents per track? That's what plaintiffs are alleging in a federal lawsuit. The suit had been thrown out by one court but another has ruled that it may proceed.

Starr vs. Sony BMG started as a bunch of related suits back in the quaint era of 2005 and relates to the label-favored MusicNet and pressplay services. The complaint describes their undesirable practices in detail. Here's a small sample: "Music purchased from MusicNet and pressplay would often 'expire' unless repurchased: A MusicNet consumer would need to repurchase music each year and a pressplay consumer who unsubscribed would immediately lose access to all of the music he or she had purchased. MusicNet and pressplay also did not allow consumers to transfer songs from their computers to portable digital music players like the iPod."

But the heart of the suit relates to the "most favored nation" clause which dictated that no label could get a better deal than another, resulting in a minimum price for all labels--that 70 cents per track alluded to above. The question is, did the labels actually get together in meetings and fix the price, or did it just happen as a response to market conditions?

The case may seem irrelevant today, with DRM-free downloads offered by many services mostly not controlled by the labels. But there is plenty of evidence of uniform pricing even today. If the court rules that price fixing exists even without proving direct collusion, the labels and today's music services may have reason to feel nervous.

See story in the always excellent ArsTechnica.