Labels are accused of monopolizing distribution.
Toshiba-EMI announced April 18 that it will comply with an order from the Japanese government's Fair Trade Commission to stop its alleged monopolization of master-ringtone distribution with four other Japanese labels.
The FTC ruled March 24 that Sony Music Entertainment (Japan), Avex, Universal Music K.K., Victor Entertainment and Toshiba-EMI had violated the unfair-trading practices section of the Anti-Monopoly Law by consigning the provision of master ringtones exclusively to Label Mobile, a Tokyo-based company they jointly own.
The FTC gave the labels until April 4 to take the following steps: grant permission to other ringtone vendors to use their masters, state publicly that they will not conspire to refuse access to their masters to other companies, and make independent decisions concerning the licensing of their masters.
To date, all companies refused, except for Toshiba-EMI, which asked for and was granted an additional two weeks to decide what to do.
In a statement, Toshiba-EMI says that while it "does not believe it has committed any wrongdoing, based on a consideration of the financial costs, effort and extended period of time that would be required to appeal these findings in a court of law, TOEMI has determined that it will accept these recommendations.
The label says it will "continue to conduct its operations with a spirit of full compliance with all applicable law and regulations." Label executives were not available for comment.
The other four labels are preparing to present their case to the FTC at the formal hearings that precede lawsuits under Japanese law. If the two sides do not reach an agreement during the hearings -- for which no schedule has been decided -- then the matter could be dealt with by the courts under the provisions of the Anti-Monopoly Law.