Supreme Court Says Major Label Price Fixing Lawsuit Can Move Forward
The U.S. Supreme Court has made the decision to allow a lawsuit accusing the four major labels of conspiring to fix music prices to move forward. The labels appealed to prevent this from happening, but the Supreme Court has chosen not to stop the lawsuit. "The case is Sony Music Entertainment v. Kevin Starr, though it involves all of the Big Four labels: Sony, Warner Music, EMI, and a unit of Vivendi SA (the company behind Universal Music Group)," Jacqui Cheng writes at Ars.
In the initial complaint, consumers accused "the record labels of colluding to set a minimum price of 70¢ per song when they began selling music online, in addition to the high subscription fees they imposed when starting music services MusicNet and Pressplay back in 2001." They also imposed needless restrictions.
In 2008, the lawsuit was thrown out by a federal judge, but the ruling was later reversed by an appeals court. They determined that the plaintiffs had presented enough facts to justify the case moving forward. This is the ruling that the record labels appealed. While the case is unlikely to go to trial before the end of 2011, Cheng notes, a loss "could prove expensive to the record labels." If the record labels do get nailed with conspiring to fix Internet song prices, it won't be good.
Combined, MusicNet and Pressplay, charged $240 per year in subscription fees. Is that an unreasonably high rate? These consumers certainly think so.