Online Music Deals Probed

[SOURCE: Los Angeles Times, AUTHOR: Dawn C. Chmielewski and Charles Duhigg]
Eliot Spitzer's probe of the recording industry's dealings with online retailers is focusing on contract terms that guarantee competing labels get the same prices for their music. Critics of the labels' practices said they threatened the legitimate market for online music just as it was taking off, potentially raising the familiar 99-cent price customers pay for their tunes. The New York attorney general last year issued subpoenas to major record labels as part of an investigation into whether they colluded to set prices for the music they sell online. Several people familiar with the probe said Spitzer was examining "most-favored nation" clauses in the labels' contracts with online music services. The head of the trade group for Internet music retailers said that the labels' insistence on pricing guarantees threatened the legitimate online music market just as consumers were beginning to buy, rather than steal, music online.
http://www.latimes.com/business/printedition/la-fi-labels12jan12,1,2251562.story?coll=la-headlines-pe-business
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