WASHINGTON – Checks are in the mail to 59,000 Maryland residents who were part of a national class-action price-fixing suit against some major record labels.
Each resident’s share of the $67 million: $13.86.
But state officials hailed the settlement, which also requires the record companies to donate 5.5 million music CDs to public libraries, schools and colleges across the country. Public institutions in Maryland are expected to receive more than 100,000 of the compact discs.
Maryland was one of 40 states and three territories that sued music distributors BMG, EMI Music Distribution, Warner-Elektra-Atlantic Corp., Sony Music Entertainment and Universal Music Group, along with retailers Tower Records, Musicland and Transworld Entertainment Corp.
The suit, filed in a New York federal court in 2000, accused the companies of violating antitrust laws, saying the distributors and retailers “illegally conspired” with one another to fix CD prices.
The price-fixing grew out of an industry practice known as Minimum Advertised Price, or MAP. Under that policy, distributors paid for retailers’ advertising, but only if the stores advertised CDs at or above a minimum price set by the distributor.
The case was settled in July, but distribution of the money was delayed until this month.
The settlement calls on the companies to make cash payments of just under $67.4 million to consumers who bought music CDs between January 1995 and December 2000, and who filed claims on time. The deadline for filing a claim under the settlement was March 3, 2003.
Maryland Attorney General J. Joseph Curran Jr. said the settlement sign-up was advertised widely, which accounts for the 59,000 Maryland resident who signed on to the suit and will now receive checks.
“I am pleased to be able to return value to Maryland consumers who paid higher prices for CDs as the result of the defendants’ wrongful Minimum Advertised Price policies,” Curran said last week. “It was unfair and illegal.”
But some consumer advocates note that the settlement allows the companies to deny all allegations of wrongdoing, and wonder if the settlement is worth it.
“It’s hard say,” said James Plummer, a policy analyst at Consumer Alert. “I’m not convinced the entire suit was in the best interest of the consumer.”
The music CDs that will be distributed under the settlement will be “a mix of classical, jazz, gospel, country (and) rap,” Curran said. They could begin arriving as early as April.
“They’re going to go to public libraries and public schools throughout the state,” Curran said. “When you get these many CD’s it’s about getting it back to the public.”
-30- CNS 02-27-04