December 24, 2005

Eliot Spitzer On A Rampage [11:34 am]

Pricing of Downloaded Songs Prompts Antitrust Subpoenas

The New York attorney general, Eliot Spitzer, is investigating whether the four record companies that dominate the industry have violated antitrust laws in the pricing of songs that are sold by Internet music services, according to people involved in the inquiry.

[...] Warner Music disclosed yesterday in a regulatory filing that it had received a subpoena on Tuesday in connection with “an industrywide investigation” into whether the companies colluded in the pricing of music downloads.

Representatives for Warner and Sony BMG said their companies would cooperate with the investigation. Representatives for the other major companies could not be reached or declined to comment.

[...] Two major companies - Sony BMG and Warner - hit an impasse with Apple this year in talks about the price of music on the iTunes service in Japan. Apple started its service without music from the two companies, potentially offering a sign of the discord to come as the companies face contract renewal talks with Apple over its United States service.

Steven P. Jobs, the chief executive of Apple, later called the industry greedy for pressing for higher prices. Mr. Jobs’s critics in the music industry, in turn, have complained privately that Mr. Jobs is hoarding cash by holding down song prices to protect sales of Apple’s more lucrative iPod music player. An Apple spokesman declined to comment yesterday.

LATimes’ Pricing of Music Downloads Is Probed [pdf]

Slashdot story: Music Download Pricing Lawsuits Pending?

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