Court Reinstates Music Antitrust Suit

An appeals court on Wednesday reinstated a lawsuit that accused major record labels of price fixing. The suit had been previously dismissed by a federal judge.

The U.S. Second Circuit Court of Appeals decision to reinstate the antitrust case could affect millions who download music over the Internet.

Filed on behalf of people who download music over the Internet, the plaintiffs accused the record labels of violating federal antitrust laws in violation of the Sherman Antitrust Act. The defendants include Bertelsmann AG, EMI Group, Sony, Vivendi SA, and Warner Music Group, as well as some of their affiliated units.

"There was uncertainty in the law over the standards for pleading a price-fixing conspiracy," Christopher Lovell, a plaintiff's attorney, told the Reuters News service. "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 is a partner at Lovell Steward Halebian LLP, which represents the plaintiffs.

Specifically, the plaintiffs charged that price-fixing had occurred after record label firms created joint ventures to distribute music over the Internet.

"We hold that plaintiffs-appellants' second consolidated amended complaint contains enough factual matter to suggest that an agreement was made," said U.S. Circuit Judge Robert Katzmann in the opinion, which returns the case to district court. The three-judge panel did not rule on the merits the case.