DOJ Investigating Online Music Pricing

The U.S. Department of Justice says its Antitrust Division has launched an investigation of major music labels into possible anti-competitive practices in digital music pricing. Although few details have been released, the investigation would seem to follow in the steps of a similar probe being conducted by New York attorney general Eliot Spitzer. Although no details have been released and sources describe the investigation as been in “early stages,” the investigation appears to be focussed on whether the major music labels colluded to set wholesale price points for music downloads.

According to reports, subpoenas may have already been issued to the top five record labels (Warner Music, EMI, Sony BMG, Vivendi Universal, and Bertelsmann Ag). Warner Music Group disclosed that it had been subpoenaed by Spitzer in December 2005 regarding an antitrust investigation of music download pricing.

The investigation may be related to renegotiations between the labels and Apple Computer regarding the iTunes Music Store. Most tracks for sale via iTunes (in the U.S., at least) are priced at $0.99. Music labels have argued in favor of differentiated pricing on iTunes, with selected popular new music carrying higher prices while some back catalog and promoted released might carry lower prices.