Supreme Court Allows Class Action Against Labels

The U.S. Supreme Court has allowed a class action lawsuit against the four major record labels that accuses the labels of price fixing digital music to proceed. The court was considering an appeal by the labels of an earlier decision by a federal appeals court that allowed the case to continue and chose not to change that decision, allowing the case to proceed.

The lawsuit was begun over the subscription prices charged by label run services MusicNet and PressPlay, with customers alleging that the $240-per year fees were artificially high, and that songs from the service were crippled with DRM that prevented them from being loaded onto iPods.

The Daily Online Examiner reported that the suit also said the labels conspired to set another artificially high price for digital tracks sold to online retailers (Apple, Amazon, etc.) of US$0.70 per single. The plaintiffs argued that eMusic, a service offering music from independent labels and artists, charged just $0.25 per song.

According to Bloomberg, the labels had argued in the Supreme Court that there wasn’t enough evidence to suggest that the labels engaged in any misconduct, but the Supreme Court did not reverse the appellate decision to allow the case to proceed.