Between 1995 and 2000 music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of

compact disc The compact disc (CD) is a Digital media, digital optical disc data storage format co-developed by Philips and Sony to store and play digital audio recordings. It employs the Compact Disc Digital Audio (CD-DA) standard and was capable of hol ...

s in order to end price wars by discounters such as

Best Buy Best Buy Co., Inc. is an American multinational consumer electronics retailer headquartered in Richfield, Minnesota. Originally founded by Richard M. Schulze and James Wheeler in 1966 as an audio specialty store called Sound of Music, it was r ...

and Target in the early 1990s. It is estimated customers were overcharged by nearly $500 million and up to $5 per album. In August 2000, the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) United States antitrust law, antitrust law and the promotion of consumer protection. It ...

opened an investigation into

price fixing Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...

leading to decreased competition and reduction of discounting among music distributors and retailers. This was followed by Florida and New York under Attorney General Eliot Spitzer leading a lawsuit by 41 states against the music industry. A settlement in 2002 included the music publishers and distributors;

Sony Music Sony Music Entertainment (SME), commonly known as Sony Music, is an American multinational music company owned by Japanese conglomerate Sony Group Corporation. It is the recording division of Sony Music Group, with the other half being the ...

Warner Music Warner Music Group Corp., commonly abbreviated as WMG, is an American multinational entertainment and record label conglomerate headquartered in New York City. It is one of the " big three" recording companies and the third-largest in the gl ...

Bertelsmann Music Group Bertelsmann Music Group (BMG) was a division of a German media company Bertelsmann before its completion of sale of the majority of its assets to Sony Corporation of America on 1 October 2008. Although it was established in 1987, the music c ...

EMI Music EMI Group Limited (formerly EMI Group plc until 2007; originally an initialism for Electric and Musical Industries, also referred to as EMI Records or simply EMI) was a British Transnational corporation, transnational Conglomerate (company), c ...

Universal Music Universal Music Group N.V. (often abbreviated as UMG and referred to as Universal Music Group or Universal Music) is a Dutch– American multinational music corporation under Dutch law. UMG's corporate headquarters are located in Hilversum ...

as well as retailers

Musicland The Musicland Group, Inc. was an entertainment company that ran Musicland, Sam Goody, Discount Records, Suncoast Motion Picture Company, On Cue, and the Media Play Superstore Chains. The Musicland Group was purchased by Best Buy in 2001 at the ...

Trans World Entertainment Kaspien Holdings, Inc. (formerly Trans World Entertainment) was an American company that provided software and services for ecommerce. Kaspien Holdings operates on Amazon in the United States, Canada, United Kingdom, Spain, France, Italy, German ...

and

Tower Records Tower Records is an international retail franchising, franchise and online music store that was formerly based in Sacramento, California, United States. From 1960 until 2006, Tower operated retail stores in the United States, which closed when ...

. In restitution, for

they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to public and non-profit groups but admitted no wrongdoing.

References

{{reflist Anti-competitive practices Corporate scandals

See also

References