Music industry to pay $67.4M in CD price-fixing case

NEW YORK (Reuters) — The five largest music companies and the three largest music retailers will pay $67.4 million in cash to settle a CD price-fixing case launched by New York and Florida two years ago, State Attorney General Eliot Spitzer said Monday.

In August 2000, 43 U.S. states and commonwealths said an industry practice called "minimum advertised pricing" (MAP), under which the labels subsidized advertising for retailers that agreed not to sell CDs below a price determined by the labels, artificially inflated the price of CDs between 1995 and 2000, violating federal and state antitrust laws.

The five record labels — Vivendi Universal's Universal Music Group, Sony Music, Bertelsmann's BMG Music Group, AOL Time Warner's Warner Music Group and EMI Group — and the three retailers, Musicland Stores, Trans World Entertainment and Tower Records, agreed to stop using MAP policies as part of the settlement.

Brad Maione, Spitzer's spokesman, said the companies would not admit any wrongdoing.

The cash settlement will be paid to the 43 states. The companies also agreed to distribute $75.7 million worth of CDs to public entities and nonprofit organizations in all 50 states.

"This is a landmark settlement to address years of illegal price-fixing," Spitzer said in a statement. "Our agreement will provide consumers with substantial refunds and result in the distribution of a wide variety of recordings for use in our schools and communities."