Digital Music Price Fixing Class Action Lawsuit Against Major Labels Moves Forward
A consolidated class action lawsuit claiming that the major labels fixed prices on digital music will move forward, U.S. District Judge Loretta Preska ruled on Monday. The suit contends that the major labels signed agreements with joint-venture entities MusicNet and Pressplay containing a hidden Favored Nation clause guaranteeing that each recieved equal terms.
According to the filing, digital retailers, like eMusic, that originally agree to the Favored Nation terms were shut out by the major labels.
Defendants include labels that allegedly control 80% of digital music sales in the U.S.: Bertelsmann, Sony BMG Music Entertainment, Sony Corporation of America, Capitol Records/EMI, Virgin Records America, Time Warner, UMG Recordings and Warner Music Group.
The judge did not allow a related CD purchase claim to move forward.