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« Podcasts Opening New Ad Markets in Japan | Main | Potion Factory Updates Mac Podcast Maker »Justice Dept Investigating Major-Label Price-Fixing of Online DownloadsMarch 05, 2006The Department of Justice has launched an investigation into the online music industry, looking into possible price-fixing in the growing online download business. Universal Music Group, EMI Music, Warner Music Group Corp., and Sony BMG are thought to be subject to investigation in this matter. Currently, most online downloads are sold for $.99/song. Labels would like to use a variable-pricing model where new and popular songs would have higher prices. Online stores, such as iTunes, have resisted raising their prices. For a $.99 iTunes download, about 72 cents goes to the label, 8 cents to the publisher, and 20 cents are kept by Apple. The Justice Department's investigation could be a replay of an earlier government investigation. In 2000, major music labels settled an antitrust case with the Federal Trade Commission, which found the five largest distributors guilty of forging marketing agreements that set artificially high prices for compact discs. That price-fixing arrangement may have cost consumers nearly $500 million over three years. Source: The Washington Post CommentsPost a comment |
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