Evil Music Labels Make For Easy Lawsuit
from the it's-for-the-victims dept
A class action suit on behalf of 11 plaintiffs accuses the major record labels of colluding to fix the wholesale price of music that they sell to online retailers like iTunes. The collusion isn’t the smoke-filled room variety, but based on a contractual agreement, oddly known as Most Favored Nation status, that requires the retailer to give all the labels the same deal as whoever has the best. It’s no surprise that labels want to aggressively influence retail pricing, but is a class action lawsuit the best way to solve a murky legal issue that the DOJ and Eliot Spitzer are already working on? Class action lawsuits have a tendency to not actually help the affected class, while the prosecuting firm can make out with a sizable cut of the settlement (this particular firm is well known for shareholder lawsuits, resulting in million-dollar out-of-court settlements). Independent of the legal action the labels are hurting themselves more than enough by making stupid choices with respect to online music. A lawsuit against an easy and unpopular enemy feels like piling on, just for the lawyers’ sake.