About the Warner Bros. & Sony Online Music Lawsuit
Girard Gibbs is currently involved in antitrust litigation on behalf of purchasers of online music, alleging that a number of major media conglomerates conspired to fix and maintain the price of online music in violation of state antitrust and unfair competition statutes. Plaintiffs claim that, if not for the Defendants’ anticompetitive behavior, the cost of online music downloads would be substantially less.
The Defendants, including major media entities Sony and Warner Music Group, Corp., control more than 85% of the music sold to consumers in the United States. The lawsuit alleges that, when Defendants came together in 2001 to form a joint venture for the sale of online music, they also conspired to set the price of online music. After forming this joint venture, the Defendants began selling their music to major online music retailers, such as iTunes. The Defendants required their clients to sign a contract restricting their ability to license music from other companies, thereby preventing independent labels from obtaining access to online retailers.
Defendants sold their music to retailers at a wholesale price of 70 cents per song, regardless of the artist or length of song. Although the development and increasing popularity of the online music industry has allowed music producers to save money for the production and distribution of CDs, this price floor allows Defendants to maintain the price of online music at an artificially high level. By fixing the price of online music, Defendants are also able to protect the sales and pricing of CDs.
Plaintiffs contend that they were deprived of the benefits of free competition in the online music market. They seek reimbursement for the amount by which Defendants were unjustly enriched.
