Thursday, December 29, 2005


Last time the record labels were investigated in the US for illegally fixing prices artificially high, they were found guilty and came to a deal to get out of trouble; the deal involved paying back some of the cash but was mainly designed around the labels donating music to public libraries. Trouble is, the labels took the opportunity to dump unsaleable product on the public sector - presumably they took the view that all they had to do was keep to the letter, if not the spirit, as it was unlikely they'd ever find themselves in the same position.

Their decision to have played the scofflaw that time, though, might be about to bounce back on them: Elliot Spitzer, New York's Attorney General, has launched an investigation into the wholesale prices major labels charge when they sell to download services such as iTunes.

Spitzer stresses that he is only doing preliminary investigations at the moment, but he was responsible this year for unearthing the label's involvement in a criminal payola scheme so his decision to root about in this field will be causing alarm at many label offices over the New Year. It comes at a time when Warners head Edgar Bronfman has been leading a charge to try and force iTunes to abandon its one-price-fits-all structure. There's a battle developing between the labels and Apple over the issue, but it seems that the only way the record industry could force Steve Jobs and Apple to abandon the 99cent model would be by acting in concert - not, presumably, something they'd want to be seen to be doing while being investigated to see if they force prices in the market by acting in concert.