Music Companies In Korea Guilty Of Price Fixing, Collusion For Boycotting DRM-Free Music Retailers

from the is-that-a-surprise? dept

Fri, Mar 4th 2011 5:10am — Mike Masnick

For many years, we've wondered why there hasn't been a serious lawsuit brought against various companies in the music industry (and possibly the tech industry) for price fixing around digital music. The fact that the labels are dictating prices to retailers as well as all agreeing on identical prices certainly hints pretty strongly at price fixing or some form of collusion. But it seems that most folks just don't care. However, over in Korea, a bunch of digital music players -- including services, labels and telcos -- have been fined for price fixing (thanks to Bas for pointing this out). The details are a bit confusing in the link above, but other reports highlight that a part of the problem was the labels pulling music from services that didn't offer DRM. They also used this as an opportunity to fix prices:

"In order to block competition coming from smaller businesses, the companies listed above rigged their own prices. By rigging the prices in compliance with one another, they placed great harm on the consumers and other businesses in the industry. Indeed, by equalizing the prices of their products, they've made the music industry believe that such a phenomenon was permanent. They have completely set up a blockade against the production of products that fit in different price categories. This is a violation of the consumer's right of choice."

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Filed Under: drm, korea, music, price fixing

18 Comments

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Boost, 4 Mar 2011 @ 6:29am

first
Think we can get a little of this in America?
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Anonymous Coward, 4 Mar 2011 @ 6:51am

The entertainment industry is full of convicted criminals as CEO's.

Solomon Weiss (convicted in 1982, guilty of racketeering, fraud and perjury charges and acquitted him of tax violations)

Ex-Vivendi executives convicted in France in 2011.

Edgar Bronfman Jr. (Convicted of insider trading, 5 million euros fines, 15 month prison suspended sentence)
Jean-Marie Messier (Convicted of misusing company funds, 150 thousand euro fines, 3 years prison suspended sentence)
Eric Licoys (suspended prison sentence)
Guillaume Hannezo (suspended prison sentence, 850 thousand euros fine)
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Mike42 (profile), 4 Mar 2011 @ 7:07am

Re:
Don' mess wit da music. He who messes wit da music, sleeps wit da fishes.

I'ma gonna sen soma da boyz down to dat Korea place, have a little talk with the local constable, if ya know what I mean here.
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Anonymous Coward, 4 Mar 2011 @ 7:14am

Re: Re:
Kickback?

Quote:

Approximately one month later the agreement was modified because WPT was unable to produce an additional $50,000 in cash, the amount owed under the original agreement. Weiss agreed to issue $50,000 in Warner checks to Horowitz in exchange for $20,000 in cash. Weiss directed Horowitz to prepare a false, back-dated invoice, purportedly from Dennis Konner ("Konner"), an attorney, to make it appear that legal services had been performed.

Source:
752 F.2d 777; UNITED STATES of America, Appellee, v. Solomon WEISS, Defendant-Appellant.; No. 1481, Docket 84-1103.; United States Court of Appeals, Second Circuit.; Submitted July 17, 1984.; Decided Jan. 7, 1985.
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Chris Rhodes (profile), 4 Mar 2011 @ 7:15am

Ugh
IP-maximalism sucks, but anti-trust laws suck worse. As I saw someone put it recently:

If you sell for more than your competition, you're "gouging".
If you sell for less than your competition, you're "dumping".
If you sell for the same as your compmetition, you're "price fixing".
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Deirdre (profile), 4 Mar 2011 @ 7:17am

EU authorities this week raided a bunch of publishers-- the ones who have admitted it were in France-- looking for evidence of price fixing with digital books. There's a separate investigation going on in the UK.

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/8357983/EU-raid s-publishers-in-ebook-price-fixing-probe.html
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Anonymous Coward, 4 Mar 2011 @ 7:37am

Why is Warner always involved in such things?

Vivendi and Warner Guilty of Price Fixing
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Capitalist Lion Tamer (profile), 4 Mar 2011 @ 7:45am

Well, I guess you've got to price fix...
when you're dealing with an infinite supply and a limited demand. Otherwise the price heads swiftly towards $FREE.

This is where "competitive pricing" simply means staying within a few cents of your competitors. The only thing stopping it from being near or at zero is the introduction of an artificial floor. Over here in the US, we have lots of senators and Congressmen who do a little floor carpentry on the side.
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Anonymous Coward, 4 Mar 2011 @ 7:48am

The Smoking Gun - Insane Sheen: "I'm more famous then Obama"

I think the industry is full of crazy people who just lost it. There can be no explanation for all the dumb things they have been doing lately.
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ltlw0lf (profile), 4 Mar 2011 @ 8:25am

Re: first
Think we can get a little of this in America?

We did (Strike One, Strike Two). You didn't get your check from the music industry when they were convicted of price fixing?

There is still an outstanding case against the big four for price-fixing in the US based on PressPlay and MusicNet. But that got set back in 2008 when the courts ruled that there wasn't enough evidence to move forward. However, the decision was appealed and the big four lost on appeal, so the case was back before the courts. The labels appealed to the Supreme Court, but the Supreme Court rejected it, so we might see some additional results from this case.
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The eejit (profile), 4 Mar 2011 @ 8:34am

Re:
Well, it looks like they're aiming for 50 Sheens in insanity, where one Sheen is equivalent to 10 Glenn Becks.
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ltlw0lf (profile), 4 Mar 2011 @ 8:42am

Re: Ugh
IP-maximalism sucks, but anti-trust laws suck worse.

While I'd certainly agree in other industries...I have a hard time believing that anti-trust laws are evil here. Especially when there is plenty of evidence that shows that the industry was fixing the prices of CDs and downloads.

The companies colluded to create artificial price floors and to remove vendors who dropped their prices below the floor. They subsidized advertising costs in exchange for promises from vendors to not allow their CDs to go for a price lower than a set price. Even looking at laws of supply and demand (even though in this case, supply is nearly infinite with downloads,) things didn't make sense when CDs from artists in low demand were being sold for the same price as those of high demand artists.
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PaulT (profile), 4 Mar 2011 @ 10:08am

Re: Well, I guess you've got to price fix...
If you have no imagination and are stuck with physical market strategies, I suppose. Price fixing isn't necessary when you compete using something other than price.
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crade (profile), 4 Mar 2011 @ 10:17am

Re: Re: first
Maybe they should actually ask them to stop doing it as part of the sentence.
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crade (profile), 4 Mar 2011 @ 10:23am

Re: Ugh
Maybe you should complain to the RIAA and get them to change the law.
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Lawrence D'Oliveiro, 4 Mar 2011 @ 5:11pm

Re: Ugh
What a load of anti-capitalist bullshit.
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Chris Rhodes (profile), 6 Mar 2011 @ 1:02am

Re: Re: Ugh
Especially when there is plenty of evidence that shows that the industry was fixing the prices of CDs and downloads.

And my point is: So?
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Chris Rhodes (profile), 6 Mar 2011 @ 1:04am

Re: Re: Ugh
I guess I'll assume this is sarcasm, or addressed to someone else. How is government intervention regarding the prices offered in the market "pro-capitalism"?
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