The FTC has targeted the music industry again for price fixing.
In a unanimous decision, members of the U.S. FTC (Federal Trade Comission) chastised Vivendi Universal and Warner Communications for restricting competition in the sale of “The Three Tenors” – Jose Carreras, Placido Domingo, and Luciano Pavarotti – audio and video products. It seems that PolyGram (a company later bought by Vivendi) conspired with Warner “to curb discounting and advertising to boost sales of recordings that the two companies jointly had distributed based on the tenors’ concert in Paris during the 1998 soccer World Cup.”
Based on these practices, the FTC has arrived at a stunning ruling.
“The Commission’s order bars PolyGram from agreeing with competitors to fix the prices or restrict the advertising of products they produced independently.”
They need an FTC order for that?
The labels deny any wrongdoing, which should not come as a shock. The labels also denied earlier charges from the FTC of a much larger price-fixing scandal that cost consumers an estimated $480 million. The pigopolists agreed to settle that little incident by paying 41 suing states $67.4 million in cash and offering $75.7 million in CDs.
Of course, it makes you wonder, if prices are being fixed at an artificially high level — how much of all those much-lamented losses that the labels are suffering is due to file sharing, and how much is due to folks figuring out that the price is too high for this stuff?
Indeed, the article goes on to look at how big those losses have been — and determines that not only are they much lesser, in this poor economy, than many other industries, but they are largely attributable to drops in cassette and vinyl sales — and come on the heels of (and thus contrast with) spectacular growth in the 90s (sales doubled between 1993 and 2002).
The RIAA’s vendetta against file sharing keeps seeming less defensible as time goes on.