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Antitrust Case Against RIAA Reinstated

January 15th, 2010 01:45 admin Leave a comment Go to comments

NewYorkCountryLawyer writes “After Starr v. SONY BMG Music Entertainment was dismissed at the District Court level,
the antitrust class action against the RIAA has been reinstated by the US Court of Appeals for the Second Circuit. In its 25-page opinion (PDF), the Appeals court held the following allegations sufficiently allege antitrust violations: ‘First, defendants agreed to launch MusicNet and pressplay, both of which charged unreasonably high prices and contained similar DRMs. Second, none of the defendants dramatically reduced their prices for Internet Music (as compared to CDs), despite the fact that all defendants experienced dramatic cost reductions in producing Internet Music. Third, when defendants began to sell Internet Music through entities they did not own or control, they maintained the same unreasonably high prices and DRMs as MusicNet itself. Fourth, defendants used MFNs [most favored nation clauses] in their licenses that had the effect of guaranteeing that the licensor who signed the MFN received terms no less favorable than terms offered to other licensors. For example, both EMI and UMG used MFN clauses in their licensing agreements with MusicNet. Fifth, defendants used the MFNs to enforce a wholesale price floor of about 70 cents per song. Sixth, all defendants refuse to do business with eMusic, the #2 Internet Music retailer. Seventh, in or about May 2005, all defendants raised wholesale prices from about $0.65 per song to $0.70 per song. This price increase was enforced by MFNs.’”

Source: Antitrust Case Against RIAA Reinstated

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