Office of the Attorney General News Release Archive
Monday, Sept. 30, 2002
ATTORNEY GENERAL WINS ANTITRUST SETTLEMENT IN MUSIC CD PRICE-FIXING CONSPIRACY
Distributors and Retailers Agree to Provide Millions of Free CDs
AUSTIN - Texas Attorney General John Cornyn announced today that five of the largest national distributors of prerecorded music CDs and three large retailers have agreed to pay approximately $67.4 million in cash and provide $75.7 million worth of music CDs for public benefit. The distributors and retailers also agreed to no longer engage in the sales practices that allegedly led to artificially high retail prices for music CDs.
Texas, along with 40 other states and three territories, filed an antitrust lawsuit in federal court in August 2000. The lawsuit alleged that the five music distributors, including their affiliated labels, and three large music retailers, entered into illegal conspiracies to raise the price of prerecorded music to consumers.
The plaintiffs also alleged that price competition among music CD retailers was reduced as a direct result of the conspiracy. The defendants in the lawsuit are music distributors Bertelsmann Music Group, Inc., EMI Music Distribution, Warner-Elektra-Atlantic Corporation, Sony Music Entertainment, Inc. and Universal Music Group. The national retail chains are Transworld Entertainment Corporation, Tower Records, and Musicland Stores Corporation. The defendants deny these allegations.
Today's settlement has three major components:
In August, 2000 the FTC resolved an investigation involving defendant music distributors minimum advertised pricing policies by obtaining injunctive relief. Unlike the present case, no monetary relief was obtained by the FTC.
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