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DOJ Drops Online Music Antitrust Investigation 102

Posted by michael
from the see-no-evil dept.
JOstrow writes "On Tuesday, the Justice Department ended a two year long antitrust investigation into the online ventures of the music industry. The assistant attorney general for the antitrust division, R. Hewitt Pate, was quoted, 'Consumers now have available to them an increasing variety of authorized outlets from which they can purchase digital music and consumers are using those services in growing numbers.' What took off a lot of the heat was pressplay (now Napster!) and MusicNet changing their services to allow songs to be transferred from machine to machine."
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DOJ Drops Online Music Antitrust Investigation

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  • Antitrust (Score:5, Insightful)

    by danknight (570145) on Thursday December 25, 2003 @03:35PM (#7809008)
    The Irritating thing is that large businesses can get away with anticompetitive behavior and then, at the last minute get off scott free. why don't the file sharing or P2P crowd have the same Deal?
    • by TypoNAM (695420)
      Didn't you know? Large businesses run this country.
    • The Irritating thing is that large businesses can get away with anticompetitive behavior and then, at the last minute get off scott free. why don't the file sharing or P2P crowd have the same Deal?


      Because we're too busy talking about evil companies and poor us using filesharing, when we should think about 'companies', us and the true people using the filesharing-software to commit crimes, like downloading commercial software, movies etc.
      • Re:Antitrust (Score:3, Interesting)

        by Alsee (515537)
        Are you aware that for the last several decades all (US) copyright laws have been written by the publishing industry and passed by congress essentially unrevised? Copyright law has gone far astray from its original function and purpose.

        -
        • Re:Antitrust (Score:2, Interesting)

          by svanstrom (734343)

          Are you aware that for the last several decades all (US) copyright laws have been written by the publishing industry and passed by congress essentially unrevised?

          In a democracy [hyperdictionary.com] the people rule, but "the people" doesn't mean that we've got a small army running around trying to force everyone to take part of the democratic process regarding things they don't even care about.

          That has resulted in us today having people that complain about others having what they think is too much power; but most people compl

          • Re:Antitrust (Score:4, Informative)

            by Alsee (515537) on Friday December 26, 2003 @01:22PM (#7813114) Homepage
            In a democracy the people rule

            Actually the US is a Republic, rule by elected representitives. Yes, "Democracy" is also used to cover Republics, but I want to highlight that distinction for a moment...

            [some people have] too much power; but most people complaining don't even try to do anything about it.

            Actually it is a genuine problem. There is an inhernet flaw or bias in the system. A flaw recognized by the courts, a flaw that the courts in some areas have stepped in to correct. There is an imbalance between small highly focused intrests and large but diffuse public intrests.

            Our elected representitives generally try to do the "right thing", but they are busy and they can't be experts on every subject they face. Small highly focused interests, like the publishing industry, can invest a lot of money and work in drafting and lobbying for a law. In 1976 we had a massive overhaul of our copyright system. That law was written by "experts" - copyright lawyers. But those copyright lawyers paid by and were working for the publishing industry. There was some input from other focused intrests such as the American Library Association, but there was no one involved working to represent the public's intrests.

            The public domain benefits everyone, but just a little bit. Fair use benefits everyone, but just a little bit. The public intrest is a diffuse intrest. There is no one at the "bargaining table" to even mention the public's intrests, much less argue for them.

            Remember, the 600-odd legislators are not copyright experts. They are taking advice from experts. The legislators even aware of the public's intrests because no one involved mentioned them.

            The Digital Millenum Copyright Act was also almost entirely written by the publishing industry's lawyers, but they did have to negotiate with lawyers representing. While the ISP lawyers did fight some of what the publishing industry wanted, they only did so to the extent of covering the ISP's collective butts. The publishing industry was able to get pretty much anything they wanted once they allowed ISP's a way to get immunity from lawsuits. There was no one at the bargaining table to argue that the system was severly broken, there was no one at the bargaining table to argue the public's intrests. The issues were never raised. The legislators just took the advice of the "experts" who were at the bargaining table.

            There is an inherent bias in our legislative system that strongly favors small focused intrests at the expense of large diffuse intrests. The large diffuse intrest goes completely overlooked.

            So yes, now publishers have unduly benefited at the expence of the majority you now wind up with that majority complaining. It still only has a small impact of each individual so it's difficult to hire an army of lawyers and lobbyists to go fight at the barganing table in Washington. Some some efforst are being made, and some legislators are beginning to hear the complaints.

            ------------

            I don't know what [copyright] really should be.

            Much of the "common knowledge" about what copyright is or should be has come from the publishing industry itself.

            If you turn to the Founders of the Constitution, and to the Constitution, and to the Supreme Court, then you get a very very different picture of the actual legal basis and purpose of US patent and copyright law...

            copyright is about limiting the control of what you have created... making sure that you lose control of your own work, to the benefit of the people.

            No, that is the exact opposite of what copyright is.

            According to the Founders of the Constitution, and the Constitution, and the Supreme Court, all such creations are "owned" by the public. Authors have absolutely no inherent right to any control. You probably think those are radical statements, but I can provide links and quotes from the Supreme Court and the Founding Fathers to if you doubt m
            • Your post is just way too, IMHO, US-centric; and even if we ignore that nothing says that the "Founding Fathers" were correct when they came up with what they thought to be fair regarding copyright.
              Even if they were correct they were so at a time when it wasn't easy to copy and distribute material; it's impossible for them to create a system that deals with people being able to download DVD-quality movies in under 15 minutes... not to mention that they probably would have laughed if you'd told them about mu
              • Your post is just way too, IMHO, US-centric

                I usually do make an effort to avoid being US-centric. It is challenging enough debating copyright issues in refference to a single system. Trying to phrase it globally and in refference to countries with different laws that I'm not familiar with would be hard.

                I would say the purpose of of copyright law is or should be the same globally. The US situation also has a huge impact globally. Countries all over the world are imposing DMCA-type laws because the US is d
    • Because George W. Bush likes big companies.

      See also: Microsoft, Enron
  • by JoeShmoe (90109) <askjoeshmoe@hotmail.com> on Thursday December 25, 2003 @03:39PM (#7809018)
    Why the hell is a ruling on antitrust action being made based on the current market, not when the action was first filed? This is the most idiotic thing I've ever heard. If I get arrested for a crime, which is later repealed, I'm still under arrest and guilty of the crime.

    When this case was filed, RIAA et al were suing anyone who had anything to do with online music distribution...at one point Napster was arguing that the lawsuits were less about copyright violations and more about forcing consumers to use RIAA's own crappy services.

    Now two years later, because everyone had no choice but to go along with the insane pricing and restrictions RIAA wanted to begin with, we suddenly have plenty of options and competition? Bull! We consumers have already been harmed. the lion's share of online music cost is RIAA royalties. We now have to choose between the Microsoft/WMA world or the Apple/AAC world, with no way to move purchases from one to the other. This is exactly what RIAA wanted all along, and by forcing early adopters to choke to death on the crappy v1 PressPlay and MusicNet, everyone else thinks iTunes Music Store and Wal-Mart are wonderful.

    F that. Yet another case of our Republican administration yanking the leash back to reward their favorite corporate donors.

    The only thing about this whole mess that is true is that P2P applications are so far staying well ahead of the piracy police...so, yes, I guess it is true that consumers have plenty of choices and options...Kazaa, eDonkey/Overnet, iMesh, BitTorrent.

    - JoeShmoe
    .
    • by Anonymous Coward on Thursday December 25, 2003 @03:41PM (#7809026)
      Yet another case of our Republican administration yanking the leash back to reward their favorite corporate donors.

      Proof? This investigation began during the same administration, so unless I see some actual coorelation between donation and administrative action, I call BS on you.
      • by Anonymous Coward
        See you in court five years from now.

        I love Republican idiology. Women who willingly, even enthusiastically give the president blow jobs should be part of the public record, because the people have the right to know, but powerful industrial representatives who meet with the administration in secret should have both the meetings, the attendees, and the topics and effects of those meetings should all be kept secret, because that would interfer with the ability to the government to conduct the people's busin
        • by Anonymous Coward
          If there is one thing this administration doesn't deserve, it's the benefit of any doubt.

          I disagree. When they send the lower classes off to die in a war they'd never let their own kids get involved in, they're doing it for your freedom to bitch and complain about the system. Don't be bothered by the fact that they make it impossible for you to change the system. Freedom of speech alone is double-plus good. Big brother loves you.
      • Well, if I were to subscribe to that sort of conspiracy theory, I'd just point out that starting an investigation you don't want carried out is the best way to make sure that the outcome is favourable.
    • by Azure Khan (201396) on Thursday December 25, 2003 @03:44PM (#7809036)
      Actually, your analogy is slightly flawed.

      It's like getting arrested for a crime, but getting released without punishment because, hey, you're not doing it right now.
    • Actually, it isn't a "crock of crap".

      The thrust of an anti-trust action is that it has or will harm consumers. If you get down the road and it can be demonstrated that consumers aren't harmed, then there is little need to seek a remedy.

      Remember that unlike theft - the grounds on which Napster, et al have been pursued - anti-trust is a civil, not crimanl action.

      The goal of our anti-trust laws are to insure that consumers are not harmed by anti-competitive behavior on the part of businesses. If there is no
      • by belmolis (702863) <billposer@@@alum...mit...edu> on Thursday December 25, 2003 @04:35PM (#7809194) Homepage
        Remember that unlike theft - the grounds on which Napster, et al have been pursued - anti-trust is a civil, not crimanl action.

        Not so. In the United States, although antitrust action is usually civil, unlike most other countries it is also a criminal matter. Check out the American Antitrust Institute's Primer on US Criminal Antitrust [antitrustinstitute.org]. The Sherman Act of 1890 provides criminal penalties for antitrust violations. In addition to fines, prison sentences of up to three years are possible.
        • By the way, this is mostly because the US antitrust law was mainly designed to bust labor unions.
          • That is not true. The law was used that way because the Supreme Court interpreted it that way until Congress actually passed an amendment clarifying their intent and specifically exempting unions from antitrust law. So you're right that it was used to bust labor unions, but it was designed to bust monopolies. This was a time of severe public discontent with the arrogance of the "robber barons"; the public was clamoring for legislation like the antitrust act.
            • This was a time of severe public discontent with the arrogance of the "robber barons"; the public was clamoring for legislation like the antitrust act.

              It is fascinating to watch history repeat itself in different ways. Today, a majority of us on /. are one faction of public discontent with what I suppose should be called "idea barons". At the same time, we're confronting the disconnect between the immediacy of communications afforded by the Internet and the communications processes to which our electe

        • You are correct. I should have said "largely a civil action".

          Yes, but US criminal anti-trust is more often than not pursued. It is the civil actions that are largerly what is pursued.

          Why you might ask? Because it is easier to complete a civil action vs. a criminal action.

          A civil action is held to the "preponderence of evidence" standard, while a criminal action faces the much stiffer "beyond a reasonable doubt."

          This is the same reason why Law Enforcement prefers the drug seizure laws, a civil action, vs
    • Nay, we are but CITIZENS!!
    • by Kjella (173770) on Thursday December 25, 2003 @04:58PM (#7809319) Homepage
      There are two aspects to it - one is becoming a monopoly itself (which isn't illegal by itself, as long as it happens in a legal way), and abusing said monopoly. The problem from a legal point of view is that it is very difficult to give a clear definition of when exactly it is abusing the power. Yes, it might seem "obvious" to you that this is an abuse of market power, but it's hardly specified anywhere in a law that "under market conditions X, with a market power Y, it is illegal to do Z".

      After all, there's no doubt that Microsoft, RIAA has a lot of power, in whatever they do, simply because they're monopolies (no, that does not mean 100% market share. Look it up). The question is, where exactly is the border between use and abuse? It's a fundamental right, for companies as well as individuals to know what is illegal. Not "we'll decide that this is illegal" after the fact.

      Since it's mostly a gray area decided on a case-by-case basis, they do not want it to be self-limiting out of fear. That's why most penalties are designed to be corrective rather than punitative, or in more normal terms, their goal is to end the reason for the anti-trust suit, nothing more. Think of it an anti-trust ruling almost like a specific instantiation of the law "It is illegal for a company with Microsoft's market power, under the current market conditions, to integrate IE the way they do." After that it is "law", and you can punish them bigtime if they don't comply with that.

      The thing is, when conditions change, the "law" goes null and void. Which leads to cases like this, where they basicly say: "Well, the market conditions are no longer the same as at the time of the filing, so even if we went ahead the ruling would have no effect whatsoever."

      If you want an analogy, a dog on a leash gets reined in when it goes too far (corrective), it doesn't get a beating because it went too far (punitative). If you did, it would probably stick very close to you, afraid of getting a beating (self-limiting).

      The whole problem occurs when the legal system is lagging. The leash is an instant feedback "this is the limit". This investigation is like saying "Well, the dog tore the leash, but ran out of the city (where it's supposed to be on a leash) and into the woods, where it usually runs free anyway. So everything is ok, no need to leash it now." The result is the dog can keep running (drag it out in court) until the problem solves itself and nothing happens.

      It sucks, and there really should be punitative penalities for what I mean are blatant and obvious abuses of power. We don't have to list all the possible ways to kill a man in the murder paragraph, then we shouldn't have to list all the ways to stifle competition in the anti-trust paragraph either.

      Kjella
    • by sosegumu (696957) on Thursday December 25, 2003 @05:09PM (#7809378)

      Yet another case of our Republican administration yanking the leash back to reward their favorite corporate donors.

      Ummm...the music industry gives primarily to Democrats. Check it out [opensecrets.org].

    • I think this just means that in the online sales area (particularly MusicMatch and PressPlay), the majors aren't dominating the market.

      In fact, since no one is using their services, it's really hard to thump them too hard over it.

      That doesn't mean they're still not a monopoly, pigopoly or whatever. It just means that in the narrow scope of a particular line of questioning the DOJ started looking at two and a half years ago, they're clean.
    • Why the hell is a ruling on antitrust action being made based on the current market, not when the action was first filed?

      The current administration has trouble differentiating actualities from potentialities. It's just the way they are, one of their weaknesses if you will.

      For another example, Bush has trouble [smh.com.au] seeing a difference between having WMD and not having them but maybe wanting them.

    • by $beirdo (318326)
      Eh, the investigation was concerned with whether or not the future of online digital music distribution was going to be controlled by the five major labels, which have significant equity stakes in pressplay and MusicNet.

      The Justice Dept. was concerned that the five majors would end up with exclusive control of online digital distribution, which would be a Bad Thing and would probably violate antitrust.

      Since Apple is kicking ass in this space, and there's a bunch of other players out there that don't hav
      • Apple is making practically nothing in this space, they have publically stated that they buy their music supply from the RIAA oligopoly (aka Hollywood content cartel) at about what they sell it for.

        No further proof should be necessary of antitrust violations, if Apple had a meaningful choice of vendors, they wouldn't be essentially providing a profit machine for the RIAA labels.

        The only reason Apple can do this is that the download market is essentially subsidized by the iPod.

        This is a competitive marke

    • actually, repubs have typically been good for tech competititon. see republican opposition to the broadcast flag (especially oren hatch and john mccain). i'd like to a paper i wrote, but it links to (c)ed material (westlaw pdfs).
  • Just use irate (Score:5, Informative)

    by treat (84622) on Thursday December 25, 2003 @03:40PM (#7809021)
    Just use irate [sourceforge.net]. All the free (beer) music you can listen to, computer-selected to be music you will like. The user interface could use a great deal of polishing, but I'm sure that is happening. And it's quite usable in its current state. I see no reason to support RIAA music for any reason anymore. (And sharing their music is supporting them, as it builds popularity).
    • Just use irate. All the free (beer) music you can listen to, computer-selected to be music you will like. The user interface could use a great deal of polishing, but I'm sure that is happening. And it's quite usable in its current state. I see no reason to support RIAA music for any reason anymore. (And sharing their music is supporting them, as it builds popularity).

      Lets be honest, the UI is not usable. You cannot search songs, you cant create playlists, you cannot even jump into a part of song, you have
      • Lets be honest, the UI is not usable.

        You cannot search songs,

        Which is the premise of it. It suggests you songs. You don't have to search for them.

        I think your other points are valid, but this one is not.
        • Which is the premise of it. It suggests you songs. You don't have to search for them.

          I think your other points are valid, but this one is not.


          I didn't want to search new songs, I wanted to search my already downloaded music for that cool song named X.
    • It's a great basic concept, but if you take a look at the bug list [sourceforge.net], you'll see that there are many many basic problems that haven't been fixed in 3 months or so. I hope that the people behind irate get the right message: It's a nice idea, but it could need some more motivation in the bug fixing / optimization / expansions department.
  • by Animats (122034) on Thursday December 25, 2003 @03:54PM (#7809068) Homepage
    From an antitrust perspective, this is right. The labels blew it so badly in online music distribution that they failed to achieve significant market share. They tried, but failed through sheer incompetence.
  • Oh well (Score:4, Insightful)

    by Gary Whittles (735467) on Thursday December 25, 2003 @03:54PM (#7809069) Journal
    But it's not like successful anti-trust lawsuits ever punish infringing companies enough. For example, Microsoft has been found to be an illegal monopoly time after time. But no serious punishment or solution, such as splitting up the company, has even been considered. Meanwhile, Microsoft continues to unfairly exploit it's desktop monopoly and crush any competition.
    • Re:Oh well (Score:1, Troll)

      by stubear (130454)
      "But no serious punishment or solution, such as splitting up the company, has even been considered."

      Actually a split order was considered and the ruling lost on appeal. Just because you personally don't like the way the matter was resolved does not mean the solution was the best arrangement or all involved. I really wish you slashbots would quit thinking the world revolves around yourselves and if things aren't done your way they aren't done right. Get over yourself.
  • Wrong target (Score:4, Insightful)

    by Brahmastra (685988) on Thursday December 25, 2003 @03:54PM (#7809071)
    The real target of anti-trust investigations should be all the large record companies. They get together, form the RIAA, and control the market. If this isn't a target for anti-trust action, I don't know what is.
  • by Anonymous Coward
    When I am President...Dr Howard Dean
  • after apple itunes sold as much as it did this is no wonder.

    now napster is attempting a comeback (yea right) and everyone and their uncle is trying to get in on selling downloadable music..

    personally I like it free...
  • by gsfprez (27403) on Thursday December 25, 2003 @04:08PM (#7809111)
    there are still only less than 5 (how many are there now after the recent buyouts?) companies that own the vast vast majority of music copyrights and all sell their music for the smae prices?

    what part of anti-competitive collusionary tactics between a handful of companies to Standard Oil themselves in charge of a whiole industry am i missing that made the DOJ drop it?

    face it - the DOJ is useless to stop subtle and patently obvious monopolies. So be it.

    We are bigger than they are... we're crushing them with Linux, and we can crush them by not buying CDs any more.

    no problem. We are in charge.. they can't sue all of us.
    • How exactly are you crushing record companies by using Linux? Linux/OSS has nothing to do with this.
      • OSS has nothing to do with this.

        When Microsoft and Apple have incorporated DRM into every aspect of the OS, OSS will have everything to do with protecting Fair Use and preventing both government and corporate censorship.

    • Good one! (Score:1, Flamebait)

      by ZxCv (6138) *
      no problem. We are in charge.. they can't sue all of us.

      Ha! Good one! We are talking about the same RIAA, right?

      Ask that 12yr old girl or that 78yr old grandma if they think the RIAA can't sue all of us.
  • POSTSCRIPT (Score:4, Funny)

    by xintegerx (557455) on Thursday December 25, 2003 @04:08PM (#7809115) Homepage
    Added DEC 25th, 2003 at 3:00 PM.

    "And besides, RIAA representatives could never be reached for comment. The constant busy ring was like they were downloading on the intraweb 24/7....", said a government spokesperson.
  • by Anonymous Coward
    A few years ago, this anti-trust investigation was a favorite retort of music-piracy advocates when confronted with the inherent illegality of their online music copying. "Look," they would say, "the music industry is a monopoly. Therefore we have a moral right to steal their products." Never mind the absurdity of the argument, that somehow some breech of regulation by a business made stealing their property legal, it became a very popular argument among the morally and intellectually bankrupt hypocrites
  • No Big Deal (Score:3, Insightful)

    by poofyhairguy82 (635386) on Thursday December 25, 2003 @04:19PM (#7809154) Journal
    The DOJ dropping this is not that big of deal. Even if they would have found the RIAA to be a monopoly the organization would have received something akin to a slap on the wrist in monetary terms (for them). The only positive thing that could have come from it would be that the common man would have learned off CNN to equate the RIAA with a monopoly. Since this is simply a shell organization created to protect the interests of the biggest record industries, if such bad press would have occurred they would have simply disbanded it and make a new organization with a different name but the same job (like the WFRP- warm and fuzzy record producers). Nothing from the DOJ could have really changed the market or change their tactics. The have politicians of both parties in their pocket and they are not scarred to use them.

    The real punishment for their evils is one worse than any gov. agency could give. In a world where name recognition is all important, the refusal to sell music online at first made illegal PSP programs have the biggest name in online music. Now if the common man wants digital music he thinks of kazaa long before pressplay. Reclaiming the Napster name helped them a little, but their was too much time between the Napster of old and its new corporate foil. They are dieing for not growing when they had the chance. The DOJ might have realized that and felt bad enough for them to call off the dogs.

  • Question (Score:4, Interesting)

    by Psychic Burrito (611532) on Thursday December 25, 2003 @04:40PM (#7809208)
    Does anybody know if iTunes (or any of these other stores) now allow the official resale of songs to other parties? There was a story on slashdot a few months back about somebody trying this on eBay and getting stopped by the eBay TOS. Has this changed now?

    Additionaly, am I right that as soon as Apple, Pressplay or any other venture goes bankrupt and I format my hd and reinstall the songs from a backup, I'm out of luck and can't play them ever again?

    Thanks for any clarifications!
    • At least with the iTunes music store, when I make backups I write audio CD's (which the iTunes TOS allows you to do an unlimited number of times). Consequently, if I ever lost the music, I wouldn't have to re-authorize anything, I could just re-rip it.
  • Contact Information (Score:3, Informative)

    by Anonymous Coward on Thursday December 25, 2003 @04:41PM (#7809211)
    If anyone feels the need to contact R. Hewitt Pate over this, here's the division's contact page. [usdoj.gov]
    And for your convenience, Mr. Pate's phone number. [usdoj.gov]
    202-514-2401
  • 'Consumers now have available to them an increasing variety of authorized outlets from which they can purchase digital music and consumers are using those services in growing numbers.'

    Unfortunately (as was hinted at in another comment), The Big 5, acting as one, still control the material; yes, we have more middlemen ('outlets') to sell it to John Q. Public, but the middlemen have no choice in supply. Hence, 'consumers' (the term the DOJ used) still don't have any true choice.

    If one manufacturer had a monopoly on car batteries, yet I can buy said batteries from Target, Wal-Mart, Ace Hardware, and a few other stores, do I really have a choice? Is there any significant change to the monopoly status?

    I think the DOJ is wearing the wrong kind of glasses, metaphorically speaking.

    RD
    • by ZxCv (6138) *
      Unfortunately (as was hinted at in another comment), The Big 5, acting as one, still control the material; yes, we have more middlemen ('outlets') to sell it to John Q. Public, but the middlemen have no choice in supply. Hence, 'consumers' (the term the DOJ used) still don't have any true choice.

      Well, duh? How would it work where is more choice in supply for the middlemen? Another layer of leeches in the music supply chain to drive up the cost of my CD? And while you could say they have no choice for t
      • I believe the OP you were responding to envisions the RIAA as an effective monopoly. That is, there may be 5 Big Record Companies, but because they collude to drive up prices/lobby for outrageous laws/sue downloaders they should be treated as a single entity.

        I agree, of course, but I don't suffer from the delusion the government will do anything about it. Then again, I don't think the music buying populace will actually stop buying RIAA member stuff. Even I find it difficult sometimes...
  • There are still unresolved antitrust issues that are ongoing with online digital music distribution. For one, all of the services besides Apple's iTunes is using the WMA file format, straight from Microsoft. You have the RIAA colluding with convicted monopolist Microsoft and its indirect agents. Microsoft itself will be offering its own music store next year. The only fact keeping this from an antitrust complaint is the fact that Apple's iTunes is the only real successful digital store and Apple uses

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