After years of being preyed upon by the music industry, through the legal machinations of the RIAA, the hunted struck back with a lawsuit against the hunters alleging violations of U.S. antitrust law. In October 2008 the lawsuit was dismissed by a federal district court, but upon review the U.S. Second Circuit Court of Appeals has reinstated the lawsuit, and has returned it to the district court for further action.
The lawsuit against the music industry, including Bertelsmann AG, EMI Group, Sony Corp, Vivendi SA, and Warner Music Group Corp, alleged that they conspired to fix the wholesale price of downloaded music at 70 cents, and enforced their agreement through restrictive licensing arrangements. The suit was dismissed due to lack of evidence; a finding the Appeals Court reversed.
According to the Second Circuit Court, plaintiffs’ allegations were “sufficient to plausibly suggest” a price-fixing conspiracy existed, and there was “enough factual matter” to allow the case to go forward. The Circuit Court appears to believe that the music industry’s efforts to sell downloaded music, for example MusicNet and pressplay, were so lame the only way they could continue to exist is if something behind the scenes was propping them up. The Court concluded that “some form of agreement among defendants would have been needed to render the enterprises profitable.”
Christopher Lovell, an attorney for the plaintiffs, said “There was uncertainty in the law over the standards for pleading a price-fixing conspiracy. This decision goes a long way toward clarifying what the standard requires in a way that helps people who paid allegedly conspiratorial prices for digital music.” Lovell plans to seek class action status for the case, which Lovell says could affect millions of consumers.
The FTC was investigating the world’s four largest manufacturers of NAND flash memory: two in South Korea, one in Japan, and one in the United States. The four companies investigated are unnamed in the report, leaving us to wonder who they are. The report, however, does tell us the world’s four largest NAND flash memory manufacturers are Samsung and Hynix (in South Korea), Toshiba (in Japan), and SanDisk (in the United States). Perhaps it’s not such a mystery after all.
NAND flash memory, which is cheap to produce, is used in digital music players, digital campers, USB memory sticks, and the like. An over-production in the latter part of the decade lead to a downward spiral in prices, which some manufacturers are alleged to have perpetrated to gain market share. Manufacturers claim that pricing was more a factor of oversupply and technological advances, which the FTC seems to agree with, finding no evidence of price-fixing on the international level, and limited evidence of price-fixing on the domestic level.