DoJ Follows Spitzer Into Digital Music Pricing

Federal Probe Is Said to Focus on Music Pricing [pdf] ( see also DOJ opens probe into online music pricing: sources [pdf] )

The Justice Department has served or is expected to serve the nation’s four major music companies with subpoenas stemming from an investigation of online music pricing, said sources at the companies, who requested anonymity because of the sensitivity of the matter.

The subpoenas mirror a probe launched last year by New York Atty. Gen. Eliot Spitzer.

Spitzer is examining clauses in music label contracts with online music services, such as Apple Computer Inc.’s iTunes Music Store, that guarantee competing labels get the same prices for their music.

Some critics suggest that the clauses threaten the legitimate market for online music just as it is taking off, potentially raising the standard 99-cent price customers pay for tunes.

Music executives believe that they will prevail, citing similar clauses in other industries.