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The Courts Music

Antitrust Case Against RIAA Reinstated 163

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.'"
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Antitrust Case Against RIAA Reinstated

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  • MFN? (Score:4, Interesting)

    by orta ( 786013 ) on Friday January 15, 2010 @09:47AM (#30778150) Homepage Journal
    Its not exactly most favored nation, if there's no advantage to being so.
  • by colin_n ( 50370 ) on Friday January 15, 2010 @09:54AM (#30778230) Homepage Journal

    Who is going to compensate me for my increased stress level from living in fear of being sued by the RIAA? If I had kids and I wanted them to behave, I'd just tell them stories about the RIAA coming to get them and financially ruin them.

    Don't jaywalk kids because the RIAA will come get you.
    Eat your vegetables so you can be strong to fight the riaa.

    Seriously though, I hate those guys.

  • Re:MFN? (Score:5, Interesting)

    by isThisNameAvailable ( 1496341 ) on Friday January 15, 2010 @10:01AM (#30778296)
    The advantage is that you don't get screwed. It's not that you're going to be homecoming queen, it's just that you get to sit at the cool kids' table and no one shoves you in a locker.
  • Thanks again NYCL (Score:5, Interesting)

    by zerocool^ ( 112121 ) on Friday January 15, 2010 @10:09AM (#30778372) Homepage Journal

    Thanks for keeping us in the loop NYCL.

    These seem to be serious allegations. I hope there's action taken this time.

    These deserve to be kept in mind:
    http://archive.salon.com/tech/feature/2000/06/14/love/ [salon.com] (Courtney Love Does the Math, from 2000 - looking at it now, oddly prophetic)
    http://www.negativland.com/albini.html [negativland.com] (The Problem with Music, by Producer Steve Albini - great insight into the process of Major Label music)

    This is why we should care. I know that it's clichéd, but these companies care nothing about you, or about music, or about the well-being of the world in which they operate. They are wholly evil, in a way that almost no other business is.

  • Re:Thanks again NYCL (Score:5, Interesting)

    by Hurricane78 ( 562437 ) <deleted&slashdot,org> on Friday January 15, 2010 @10:26AM (#30778576)

    I remember when I worked with a guy with good connections to all (then five) big music companies (who did all the deals for us, because he was an insider). He usually was on the phone with these big music managers, loudly joking, and setting up meetings of talking about deals.

    In the industry, it’s all about connections. A small group of people who know each other.

    And this was, how he once described the typical “business meeting” to me: (I think in this example it was the EMI boss.)
    He took the elevator to the top floor. The guy greeted him and offered him lines of coke as thick as your finger, on a mirror.
    Then he ordered some hookers. And then it was time for business.
    According to him, that was rather normal, and in no way an exception.

  • Interesting Points (Score:5, Interesting)

    by Tisha_AH ( 600987 ) on Friday January 15, 2010 @10:27AM (#30778588) Journal

    It is interesting to read the opinion. Conspiracy to fix prices, agreements to not compete against each other, all record companies refusing to do any business with certain companies.

    They are acting like a monopoly. This is what led to the breakup of Standard Oil back in the early part of the 20th century and the breakup of the Bell System into Baby Bells.

    This most favored nation (MFN) deal they have going and how all prices change in lockstep.

    Wow, it reminds me of how they eventually caught Al Capone. Not on running a crime syndicate but on tax evasion.

  • by Snotboble_ ( 13797 ) <aje@sno t b o b l e .net> on Friday January 15, 2010 @10:30AM (#30778618) Homepage Journal
    "This video contains content from Vevo, who has decided to block it in your country.". FYI, I live in a pinko commie 3rd world country called "Denmark" :P Gotta love the "rights protecton" - whose rights..?
  • by DragonTHC ( 208439 ) <Dragon@gamersMEN ... com minus author> on Friday January 15, 2010 @10:36AM (#30778706) Homepage Journal

    yet they were all found guilty of price fixing during the height of the CD era.

    Nothing has changed. They should be fined doubly for continuing this behavior.

  • Re:Thanks again NYCL (Score:3, Interesting)

    by DJRumpy ( 1345787 ) on Friday January 15, 2010 @10:41AM (#30778768)

    I wasn't aware of the Courtney Love letter. That was an amazing read (many thanks). That begs the second question. Why haven't I heard of this letter before? The RIAA is an evil beyond typical corporate scams and money making. They have fingers in world wide political pies, and money to literally burn. The fact that a single group can exert so much power in political circles should be a huge wake up call to everyone, yet year by year goes by and only the 'geeks' and those affected voice their concerns. I think what's even more frightening is that they now do these things opening for the most part, and again no one pays attention.

    Slavery was abolished in the US, yet I don't see how these contracts differ in any significant way from slavery and servitude.

    Why is this allowed to go on?

  • by tepples ( 727027 ) <tepples.gmail@com> on Friday January 15, 2010 @11:04AM (#30779000) Homepage Journal

    You little thieves just need to stop stealing our music!

    Your labels also own music publishers, the companies that own copyright in the music and lyrics apart from the recording. If you provide us indie songwriters with an automated way to check any song we've written against these music publishers' catalogs to make sure we didn't screw up like George Harrison ("My Sweet Lord") or Michael Bolton ("Love Is a Wonderful Thing"), we might take you up on this offer.

  • Re:Thanks again NYCL (Score:3, Interesting)

    by DJRumpy ( 1345787 ) on Friday January 15, 2010 @11:04AM (#30779006)

    And when the organization being sued is writing the very legislation that allows their actions? What then?

  • What will I get? (Score:2, Interesting)

    by Anonymous Coward on Friday January 15, 2010 @11:11AM (#30779084)

    I've bought hundreds of dollars in music (mostly online) over the last 5 years. If in fact the court rules that they have been fixing prices will I get any of that money back?

  • by T Murphy ( 1054674 ) on Friday January 15, 2010 @11:18AM (#30779144) Journal
    Is there any means for artists to claim the companies colluded on contracts, royalties, etc.? I don't know any information there so it may be they were competitive enough to avoid any claims being able to stick, but knowing how bad it is for the artist I'm more concerned about fixing that before we make things better for the consumer.
  • by JSBiff ( 87824 ) on Friday January 15, 2010 @11:19AM (#30779152) Journal

    It occurs to me that all it takes to break up a 'cartel' like this is one or two successful publishers who are not owned or controlled in any way by the existing publishers, and that such independent publishers are willing to really compete with the other labels to sign talent and publish music. The question is, are there any independent labels right now? I remember seeing a chart sometime ago which showed how a lot of 'independent labels' are really owned by the big music publishers, who just use those other labels to either serve niche markets, or create the illusion of having alternatives to dealing with them.

    Anyone know of any labels which really, truly, are independent, with which bands and music lovers might do business?

  • by Sockatume ( 732728 ) on Friday January 15, 2010 @11:34AM (#30779310)

    They don't need Hollywood Accounting. Ask any musician how much money a record release actually makes them these days. It's clearly not a profitable business!

  • by Anonymous Coward on Friday January 15, 2010 @11:45AM (#30779438)

    The whole process of watching the internet route around content protection in a matter of minutes, in an article about the RIAA getting sued.

    It's like my birthday suddenly was Christmas, and then suddenly both were today.

    I love you slashdot.

  • by icannotthinkofaname ( 1480543 ) on Friday January 15, 2010 @11:58AM (#30779598) Journal

    When you're 5: "Sharing is a nice thing to do, kids. Don't be selfish! Hoarding your stuff makes you look like a huge jerk."

    When you're 25: "Sharing is an evil thing to do, citizen. It's not selfish! Letting other people use your stuff is illegal because it means I make less money. Pay no attention to the fact that my salary is an order of magnitude higher than yours!"

    WTF world! If sharing is evil, don't tell me when I'm 5 that it's nice!

    If I ever manage to have kids, I want to raise them to believe that sharing is evil. I will then note other people's reactions to the idea. If people are generally shocked and appalled that people could actually believe this, then I will use that as an argument to show why this BS that the RIAA believes in must be outlawed.

  • by Anonymous Coward on Friday January 15, 2010 @12:12PM (#30779744)

    It's interesting to note the different trends here.

    Over time, the actual cost of making recordings comparable to those made by major recording companies has dropped, and the quality level you can expect has increased. You don't really need that much in the way of specialist hardware these days, since most of it can be done with inexpensive (sometimes free) software. High-end consumer sound cards are probably good enough, when paired with decent microphones, but even professional low-latency sound recording hardware isn't that expensive. The only thing that's even slightly expensive is studio time, but it's not really that difficult or expensive to adequately soundproof a room if you're going to be needing it often.

    You can certainly match the quality of professional recordings from the early '90s without too much trouble or expense.

    On the flip side, "professional" recording has become more expensive, rather than less expensive. They use an insane amount of specialist hardware and software, specially built recording studios, and small armies of people

    The difference is probably something like a 5 or 10% quality improvement, while costing 1000 times as much (note - numbers made up on the spot). The quality improvement hardly matters anyway - it's barely noticeable with CD quality output, it's certainly not noticeable once it's been run through a lossy audio codec, and they tend to wipe out any quality improvement they may have had by mixing everything far too loud, resulting in horrible distortion.

    My guess is that they're just carrying on doing things they way they used to. I don't doubt that, in the '80s, producing a sound recording to go on a CD would have been incredibly difficult, and required a great deal of expensive hardware. Since they've had no real incentive to reduce costs, they've just kept on doing things the same way.

  • by Jah-Wren Ryel ( 80510 ) on Friday January 15, 2010 @12:34PM (#30780002)

    Suppose that the RIAA loses and is ordered to pay restitution, but instead of cash the court allows the RIAA and its members to "pay" by donating a selection of CDs or downloads of their choice (i.e. their choice of the worst selling items)

    Don't bet on it. They can only get away with that shit once. It isn't the court that decided that last time, it was a negotiated settlement between the various state DAs offices and the RIAA. The DAs just didn't realize what sharks they were dealing with. I know this because an ex of mine was a junior DA from one of the smaller states on that case and she even got herself quoted in their local paper saying something to the effect of, "I'm sure the senior DAs from around the country will not allow the RIAA to wiggle out of this settlement." Its about 10 years later and that newspaper interview is still one of the funniest things I have to give her shit about.

  • Thanks for keeping us in the loop NYCL. These seem to be serious allegations. I hope there's action taken this time.

    I don't have the slightest doubt that the allegations

    are true, and
    can easily be proven.

    If I were a betting man, I'd be betting..... settlement.

  • by Anonymous Coward on Friday January 15, 2010 @12:54PM (#30780280)

    I like how this [youtube.com] works in the US (but aparently nowhere else), but the same video by Sony [youtube.com] is blocked in the US. At least, I am assuming that is the same video.

  • The summary was entirely factual, and didn't contain any "anti-RIAA propaganda". Your quote was for a reader comment, not from the original summary. Read the Starr vs Sony decision linked in the summary and you'll discover that the appeals judges found the evidence is strong that RIAA members have been colluding using illegal (under antitrust law) methods such as price fixing [wikipedia.org]. E.g., they ask why RIAA members raised the wholesale price from $0.65/song to $0.70/song while the second largest distributor of music, eMusic, was wholesaling at $0.25/song. In the stereotypical "normal free market", competition as well as decreased production costs would lead to lower prices.

    I love people who actually read the stuff. Thank you.

  • Re:Thanks again NYCL (Score:4, Interesting)

    by 99BottlesOfBeerInMyF ( 813746 ) on Friday January 15, 2010 @02:05PM (#30781364)

    I don't have the slightest doubt that the allegations are true, and can easily be proven. If I were a betting man, I'd be betting..... settlement.

    The question of if the RIAA loses and if they make a settlement and on how favorable of terms probably has less to do with their guilt and the law than it has to do with who is running the show. The justice department is loaded with ex-employees of RIAA at the highest levels. Maybe that means they will know how to deal with these guys or maybe it means their buddies will get off with a slap on the wrist. Much of that may depend upon if Obama keeps his promises about not letting industry insiders provide favoritism to their friends from within his administration.

  • by Gilandune ( 1266114 ) on Friday January 15, 2010 @02:16PM (#30781560) Homepage

    I think all nations except one are "Least Favoured Nations" in their eyes... (Mexico blocked too)

The best defense against logic is ignorance.