COMPACT DISC MINIMUM-ADVERTISED PRICE ANTITRUST LITIGATION
by Susan M. Palmatier
N. H. State Library

In October, 2000, after years of investigation, the attorneys general of 43 states and territories brought suit against five recorded-music distributors and three retailers for price fixing. When the court decided in favor of the plaintiffs (the states) in May 2003, the judge imposed fines of various amounts. The firms will pay $67.4 million to individuals (which works out to $13.86 per person), and $75.7 million to all 50 states (based on population) for distribution - in the form of CDs - to public agencies and non-profit organizations. The 17 distributors charged with price fixing were doing business as Sony, BMG, EMI, WEA (Time-Warner, et al), and Universal; the retailers were Musicland Stores, Trans World Entertainment, and Tower Records. Despite denying any wrongdoing, the defendants have not engaged in the practice of minimum-advertised pricing (MAP) since 2000; at that time they agreed to refrain from doing it for seven years, thereby settling a complaint brought against them earlier by the Federal Trade Commission.

Because New Hampshire had not been a party to the original antitrust suit, Sue Palmatier checked with David Rienzo, an Assistant Attorney General for New Hampshire to see what our standing was. He said New Hampshire libraries and other non-profit organizations will indeed receive CDs. He checked with the law firm that's handling the distribution and found that they're hoping to send out the CDs in late spring or early summer 2004. However, he emphasized that this is far from a define timeline; one of the defendants has yet to tell the law firm when they will deliver their allocated share.

Mr. Rienzo said New Hampshire will be receiving approximately 24,259 CDs; the lion's share will go to public schools and libraries. It was estimated that each library would receive about 50, but that figure may have been overly optimistic. Originally, the N.H. Library Association was to distribute the CDs. Sine they'll be going to both public and school libraries, the State Library - which has both public and school consultants - will work out a distribution formula and handle delivery via the van system; libraries without van service will receive their CDs in the mail.

We have no idea what titles will be available; however, Massachusetts libraries have already received CDs representing eleven genres - everything from hip-hop to Horowitz. So watch for similar free discs to arrive at your library next summer!

In the meantime, if you had signed up to participate in the settlement as an individual, and were expecting a check for $13.86, you should have already received it; mailing began on February 20, 2004 and continued for two weeks thereafter. Sue Palmatier received hers the first week of March.

If you's like more details about the case or the settlement, please get in touch with Sue Palmatier at the State Library's North Country Office: spalmatier@library.state.nh.us or 1-800-462-1726. You may also go to the following website, where you'll find a fink to the judge's order:
http://www.musiccdsettlement.com/english/default.htm. (Actually, just entering the URL up through ".com" will get you there.)