Major Record Labels Brought Down To Earth By The Courts

A couple of recent developments in the U.S. are putting a crimp in the style of the major record labels.

A couple of years back Universal Music tried to use a legal truncheon against a lowly eBay re-seller who was trying to make a few bucks re-selling promotional copies of CDs he got ahold of that were never intended for sale. The court ruled against the record company and an Appeals Court has just upheld that ruling, kiboshing the argument that simply slapping something on a copyrighted work like “For Promotional Use Only, Not For Sale”, which is the kind of wording you often see on promo copies, is legal grounds for prohibiting resale. The Court had some interesting reasons for its decision, which I don’t have room to go into here (click here for the full ruling), but this is a win for music lovers, used record stores, flea market venders and so forth who obviously don’t want to be under constant threat of a lawsuit over something so patently trivial in the larger scheme of things.

But, another news story with greater implications caught my attention the other day.

The U.S. Supreme Court is allowing an unusual price fixing suit initiated by consumers against the major labels and the Recording Industry Association of America (RIAA) to go ahead. It revolves around the setting of prices for music sold on the Internet some years back via two digital music services the majors set up called MusicNet and Pressplay.

The claim is that the labels colluded in order to charge buyers unreasonably high fees for songs and set in place unjustified restrictions on the use of the music and the transferring of the songs to portable players. If the plaintiffs win the case, I see a couple of possible consequences that could affect Joe consumer.

The Court could require that consumers be reimbursed for what they were overcharged and perhaps compensated as well for their loss of ability to enjoy fair use of what they had bought because of unreasonable purchase terms and inhibiting digital rights management (DRM) tools embedded in the tracks. Just how the Court would arrive at a formula for compensation and the dispersal of the money boggles the mind, but as we all know there’s never a shortage of high-priced lawyers eager to answer such call of duty.

The other more significant consequence is the moderating effect it could have on the behaviour of these lumbering industry behemoths going forward. It might be too much to expect, but we can only hope.

This entry was posted in Industry Stories & News. Bookmark the permalink.

Leave a Comment [Email me if it fails to appear within 3 days]

Your email address will not be published. Required fields are marked *


+ 5 = ten

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>