Antitrust Suit on Music Downloads Back in the Spotlight

The lawsuit accusing influential record labels of conspiring to set preferential prices for a large segment of people who download their music via the Internet was announced to be reinstated by a federal appeals court. The defendants summoned to court include names such as Bertelsmann AG, EMI Group, Sony Corp, Vivendi SA and Warner Music Group Corp, as well as various affiliates.

The U.S. Second Circuit Court of Appeals in New York stated that the decision to dismiss the case back in October 2008 was erroneous, and that the trial should proceed until proper resolution. According to the aforementioned appeals court, the plaintiff’s allegations were pertinent and could lead to the idea of a price-fixing conspiracy.

Filed on behalf of people who download music online, the case accused the defendants of establishing preferential prices and limiting the availability of downloaded music, completely disregarding the terms of specific legislation such as the Sherman Act.

According to the plaintiffs, the aforementioned record labels allegedly worked hand in hand to fix prices by establishing joint ventures for song distribution and restrictive license agreements.

Christopher Lovell, a partner at Lovell Stewart Halebian LLP representing the plaintiffs explains that the initial decision of dismissing the case was based on several flaws in the Sherman Act, which ambiguously covers aspects such as the ones brought for debate in court. According to Lovell, sending the case back to trial was the right thing to do, as it will allow the clarification of existing legal standards.

Circuit Judge Robert Katzmann points out that if the allegations regarding the price-fixing conspiracy are true, then there is a solid base to build the case upon and the trial should be allowed to continue.

(via Reuters)