RealTime IT News

Recording Industry Part of Online Music Antitrust Probe

By @NY Staff

A federal antitrust probe into the recording industry's distribution plans for online music ventures is said to be widening.

The Wall Street Journal reported that a Justice Department antitrust investigation of some online music ventures had progressed to civil subpoenas.

The Journal said the probe is looking into whether any collusion or illegal coordination is present among the record labels joining the online music ventures that are about to launch or have launched.

The subpoenas are said to be looking for information on whether the alleged use of copyright rules and licensing practices might illegally control music distribution on the Internet.

Among those the DOJ wants information from is the Recording Industry Association of America, which said it would cooperate fully with the subpoenas.

"We are confident that, once it has gathered the relevant facts, the Department will conclude that our actions have been fully compliant with all applicable laws. Indeed, the steps we have taken to facilitate the legitimate on-line marketplace have been pro-competitive and beneficial to consumers," said Amy Weiss, senior vice president of communications for the RIAA.

"Our actions in the courts, the Congress, the Copyright Office and in licensing negotiations have sped the availability of music to consumers online and spurred the development of legitimate business models."

The five major recording companies that are part of the RIAA have been working with a number of online music ventures, including Pressplay, which includes Microsoft Corp. and joint ownership by Sony Corp. and Vivendi Universal SA.

MusicNet, an online music venture partly funded by AOL Time Warner Inc., music label EMI Group PLC, media company Bertelsmann AG and RealNetworks, also it would cooperate with the investigation.

A spokesperson for EMI had no comment on the probe. Earlier this month, EMI Recorded Music signed licensing deals for pressplay's online music offerings, which it plans to launch sometime this fall.

The company said the non-exclusive license would cover current and catalogue music and would not affect its relationship with MusicNet. EMI is the third-largest record company and its EMI Music Publishing division is the largest music publisher.

The report said the DOJ demands for information include documents on terms and conditions on licensing deals the recording industry struck with the ventures, such as rates.

The developments come as European antitrust officials have already begun looking into the deals the recording industry has struck with online music ventures.

Even the federal judge hearing the industry's case against Napster, the free file-sharing program that spurred the online ventures in the first place, has questioned how the recording industry can avoid collusion as it tries to thwart Napster and other free file-sharing programs.