PRESS RELEASE FOR IMMEDIATE RELEASE
Contact: Lori Sitler
Phone: (302) 577-8314
Pager: (302) 247-1132
Date: September 30, 2002
ATTORNEY GENERAL WINS ANTITRUST SETTLEMENT IN LAWSUIT ALLEGING PRICING CONSPIRACY ON MUSIC CDs
(Wilmington, DE): Delaware Attorney General, M. Jane Brady, announced today that five of the largest U.S. distributors of prerecorded music CDs and three large retailers have agreed to settle an antitrust lawsuit alleging that the five music distributors and affiliates, and three large music retailers, entered into illegal conspiracies to raise the price of prerecorded music, harming consumers. Delaware, along with 41 other states and 3 territories, filed an antitrust lawsuit in federal court in August, 2000. In addition to agreeing to a legal injunction banning sales practices that allegedly led to artificially high retail prices for music CDs, the companies will pay $67,375,000 in cash, and provide 5.5 million CDs valued at $75,500,000.
The lawsuit alleged that the conspiracy reduced competition among music CD retailers. The defendants are music distributors: Bertelsmann Music Group, Inc., EMI Music Distribution, WarnerElektraAtlantic Corporation, Sony Music Entertainment, Inc., Universal Music Group and national retail chains Transworld Entertainment Corporation, Tower Records, and Musicland Stores Corporation. The agreements were part of a settlement of the suit, and the defendants deny allegations of price fixing.
Defendants agree to be enjoined from controlling retail prices in the future. Funds in the amount of $67,375,000 will be used for consumer compensation and for charitable purposes. Approximately 5.5 million music CDs will be distributed nationally. Attorney General Brady will designate how Delaware's cash portion of the settlement will be distributed. It is expected that she will direct donations, including approximately 16,000 CDs valued at $137,000, to be made to schools, libraries and other institutions. Brady commented, "This lawsuit and settlement demonstrate our commitment to halting corporate misconduct which causes our citizens to pay higher prices for goods, and distorts our free market economy."
Consumers will be able to claim single rebate payments, by telephone, mail or on-line, in a process to be announced in major publications at a later date. It is estimated that some 76 million Americans were impacted by this price fixing scheme.