MSNBC: FTC settlement is expected to bring lower CD prices

“Under pressure from federal antitrust enforcers, major music
companies are expected to agree to end a pricing practice that
discourages discounting by retailers and forces consumers to pay
higher prices for most compact disks, lawyers and industry
executives said.”

“The Federal Trade Commission is expected to charge that
retail CD prices have been illegally inflated for the past five
years by the practice, which denies cooperative advertising
payments to retailers that undercut minimum prices imposed by
manufacturers.”

“The move is expected to bring lower consumer prices for CDs,
which often cost $16 or more for new releases. It could also spark
new competition from major discounters, such as Circuit City Inc.
or Wal-Mart Stores Inc., putting new pressure on smaller
full-service music retailers.”

“The FTC Thursday is expected to file a formal complaint
outlining the charges and a simultaneous settlement agreement in
which the companies will agree to end the practice without
admitting or denying the charges… Time Warner Inc. had already
agreed to settle the FTC’s charges; Sony Corp., Bertelsmann AG’s
BMG Entertainment, EMI Group PLC and Universal Music, a unit of
Seagram Co., have now agreed to join the settlement as well,
lawyers and industry executives said late Tuesday.”

Complete
Story