The U.S. Supreme Court opted on Monday not to review an appeals court decision in an antitrust price-fixing lawsuit against record labels over the sale of digital downloads. In passing on the case, the Supreme Court has opened the door for a review of the way the major labels had set and maintain prices for digital downloads.
A U.S. appeals court in New York had ruled in 2008 that a lower court erred in dismissing the case against the major record labels. The plaintiffs argue that the five major record labels conspired to fix download prices and the terms under which they could be sold over the Internet. In addition, the complaint alleges the majors restrained the availability and distribution of music on the Internet and fix prices at an artificially high level.
The complaint reaches back before the launch of iTunes to MusicNet (launched by Bertelsmann, Warner Music Group and EMI) and pressplay (launched by Sony Corp. and Universal Music Group).
The market has showed little reaction to this news thus far. Warner Music Group's stock was up 0.19% to $5.37 in midday trading on Monday.