“The Division’s substantial investigation of pressplay and MusicNet has uncovered no evidence that the major record labels’ joint ventures have harmed competition or consumers of digital music. Consumers now have available to them an increasing variety of authorized outlets from which they can purchase digital music, and consumers are using those services in growing numbers.
“None of the several theories of competitive harm that the Division considered were ultimately supported by the facts. The Division found no impermissible coordination among the record labels as to the terms on which they would individually license their music to third-party services. The development of the digital music marketplace similarly belies any concerns that the record labels used their joint ventures to stifle the development of the Internet music marketplace and to protect their present positions in the promotion and distribution of prerecorded music in physical form.”
From the Background information from the DoJ we get this summary:
The Division considered in its investigation whether the major record labels used their joint ventures to suppress the growth of the Internet as a means of promoting and distributing music, in order to protect their present positions in the distribution of music on physical media, such as CDs. Proceeding collectively could have allowed the major record labels to explore the use of the Internet to promote and distribute their music, without relinquishing control over the pace and direction of those activities.
The poor quality and restrictive nature of pressplay’s and MusicNet’s services at launch in December 2001 provided some support for this theory. As time passed, however, both joint ventures released improved and more consumer-friendly versions of their services, and the major labels licensed their music to a broader array of third-party music services that compete on price and features. Consumers can now download individual songs from broad music collections offered by at least five such services, and might soon be able to choose among a dozen suppliers. The Division concluded from those developments that the major labels are not impeding the promotion and distribution of music over the Internet.
So, think about the recent reviews of the e-music services and see if you can reconcile them with the DoJ’s conclusions. And let’s not even go into the question of what the record companies were up to in the days before pressplay and MusicNet even existed (Napster, MP3.com and others — see John Alderman’s Sonic Boom) Or, for that matter, the ruinous business models that the emusic retailers operate under.
Then, ask yourself the following question: how do we reconcile the desire to achieve competitive markets through the application of conventional processes and investigative techniques in an era where things happen on Internet time? Particularly when our justice system lately seems to be organized around the idea that, as long as an earlier crime can be rectified with actions that yield no apparent net economic damage, then there’s nothing to prosecute (c.f., Halliburton’s gasoline price-gouging being resolved by asking for the difference between the charged price and the fair market price, rather than seeking some kind of deterring punishment?)
Bah! Humbug! Be interesting to see how much of the record of this investigation becomes public.
Update, Dec 25: the Slashdot discussion, interestingly enough, is about exactly the same issues I snarled about here — DOJ Drops Online Music Antitrust Investigation