Get $5-20 from the Evil Music Industry (1 Viewer)

[MikeAlletto]

There is no such thing as "free money". Funds diverted to this settlement are not available to be spent on other things.

What are they gonna do raise prices even more? I could care less if they divert their funds from one project to another to pay for it because of this. Thats not my problem. If I get a check then great, I'll turn around and put it in the bank or spend it on something non music related just so they don't get the money back. I maybe buy one cd a year because most of its crap and I don't want the whole thing, so for me if I get a check i'll turn out good.

 

[Mark Zimmer]

That 32,000 figure is months out of date. This has since then been widely publicized on the net and in many newspapers. I'd frankly be astonished if anyone got anything considering just the number of emails I've received from people pointing this settlement out. So it's a moot point.

 

[Greg*go]

I hate it when I don't understand some of the lingo in a thread that I started. Some of this legal talk is slightyly tricky, but I think I got an understanding for all of it.

I myself think it's a pretty stupid lawsuit as well, but isn't the fact that the companies are willing to settle out of court sort of admitting to guilt? I'm not very educated in the way lawsuits go, but that has always been my assumption. And if they think they're guilty, then that's not a good mark for their case.

I'm still not sure if this is worth pursuing or not, I'd probably end up throwing out the check just guessing that it's some junk mail. I wouldn't mind not getting any money either, as long as it goes somewhere besides CEOs & VPs pockets.

I'm not overly concerned about that band that I think is under-rated in this case either. Theyv'e done alright so far without a major label representation, so I'm sure they'll manage a way to move on.

And although I must admit I did purchase some way overpriced CDs from these stores, it was my own laziness that caused this. I was too lazy to walk across the street to Circuit City, or Best Buy, or go down to a cd store that is owned by some Joe or Jane.

 

[JayV]

Greg, companies don't always settle because they're guilty. Often, very often, a company calculates that a settlement would be cheaper than taking a chance in court.

Brad, I took a look at the complaint, and, unsurprisingly, it does not boil down to champions of the free market unfairly taking advantage of lazy consumers.

One allegation is that the defendants engaged in price-fixing and the MAP was a tool "the purpose and effect of which was to enforce compliance with, and to punish certain Retailers for deviating from, the minimum retail prices set by the Defendants' conspiracy."

I can't help but think that you have a philosophical difference with how we manage our market and you are arguing that, as opposed to why this is a "dangerous" idea.

Have I missed something or am I inaccurately characterizing your position? I'm not being facetious or flip.

-j

 

[Brad Porter]

Here's why I'm bothered...

The Federal Trade Commission concluded that the MAP policies constituted price fixing and reached a settlement agreement with all of these defendants in May of 2000, thus ending the practice of MAP. I'm not a fan of how MAP was implemented, nor do I dispute the claims made against the defendants. They did institute this policy, and it can be interpreted as price-fixing in violation of Section I of the Sherman Act. Even though MAP did not explicitly fix the price of CDs, it created a retail environment wherein pricing below the MAP amount made little business sense. The FTC did its job and restored the competitive pricing environment (although I suspect the Wal-Mart's of the world could have called their bluff and achieved the same result).

The complaint filed by the attorneys general is dated August of 2000. It seeked to recover damages from these practices. This is what I don't agree with.

Every consumer that bought a CD from 1995 to 2000 got the product they wanted at a price they were willing to pay. They made the concious decision that the price (even if it was artificially high) was a fair one. The complaint alleges that their economic interests were injured by this artificially high pricing and this is their justification for seeking damages.

If we were talking about a basic necessity like food - something that everybody has to buy - then you could argue that people were injured by price fixing because they do not have a choice about whether to pay the inflated price. But we're talking about music - a luxury item. If people felt that the prices were too high then all they had to do was not buy the CDs. Even though the music industry made a few extra bucks on the sales of each of these CDs, they got that money from people who freely chose to pay those few extra bucks.

This is why I don't agree with those who are filing a claim for damages. Since they decided that the price was reasonable when they made the purchase, I don't feel that they should be claiming that they are now entitled to a refund.

So I'm not opposed to the FTC action to halt MAP, but I am opposed to the state's claim for damages on behalf of its citizens.

The counterrargument to my position is that some sort of punishment needs to be enacted to force the defendants to pay for their actions, otherwise they get away with no punishment other than to not do it anymore. I would surmise that reduced sales numbers due to the higher pricing probably offset most of the financial benefits of the MAP policy to the producers and distributors, but I would be willing to believe the opposite were true if someone could produce some statistics. The real beneficiary was the traditional music retailers (Tower Records, Sam Goody, etc.) who were able to compete and stay afloat in this environment. Many of these retailers have been closing stores and laying off workers in recent months. I'd expect this trend to continue as Best Buy and Wal-Mart consume more and more market share.

I think I've now typed wayyyyyyyy too fricking much in this thread.

Brad

 

[JayV]

This is why I don't agree with those who are filing a claim for damages. Since they decided that the price was reasonable when they made the purchase, I don't feel that they should be claiming that they are now entitled to a refund.

Ah, now I understand what you are getting at! With that in mind, I think:

Antitrust damages aren't really designed to make the consumer whole. Any value attached to this claim is, I think, there for the purpose of calculating damages -- not determining the intrinsic value of entertainment. The statutes involved generally are designed to to allow for punishments designed to deter companies from similar behavior in the future.

I couldn't agree with you more about people feeling "entitled" to cash. If I met someone so fired up over CDs and the music biz that they told me they were "entitled" to, what, $5 bucks, I'd have a good laugh.

But most people here -- particularly those posting early in the thread -- haven't expressed a feeling of entitlement. I believe they feel (you guys jump in and correct me if I'm wrong) that if a company is caught breaking the law in its dealings with them, and is required to give money to anyone so treated, then, hey, free cash. Hardly a feeling of entitlement, no?

-j

 

[Chris_Morris]

Update:

A judge approved the settlement.The judge is asking for a final report stating how much the total cost to mail out the rebate checks will cost, and how many are going out.

Unknown is when the checks will be mailed, however the 3.5 million people who registered will receive app. $12.63 a piece.


CNN article on judgement


Chris

 

[Jed M]

Its like Christmas in June. WooHoo!!!

 

[Chris_Morris]

And the checks have begun to show up. $13.86 each, I'm rich!! WooHoo


Chris

 

[Malcolm R]

Almost enough to buy a single CD...but not quite.

 

[Mark Fontana]

This income is also taxable as a legal settlement, isn't it? As I recall, the online claim form required submitting part of your SSN.

 

[Thomas Newton]

The attorneys general claim would be that the collusion between the different content providers to set a minimum advertised price value would constitute anti-competitive behavior. This would be valid if they all sold the same exact product, but they don't. There are hundreds of thousands of different music CD products available for sale to me, the vast majority of which I value at $0.

Virtually all of those products have a single supplier due to artificial, Government-granted monopolies, and supplier interest in extracting the maximum possible monopoly rent. As you point out, they are not interchangeable. A CD of Brittney Spears is NOT a reasonable substitute for one containing "Blonde on Blonde" or "The White Album".

Thus, all it takes to create anti-competitive behavior is for the monopoly wholesale supplier to use legal monopoly at the wholesale level as a tool to eliminate retail-level competition.

Just because a wholesale monopoly might be legal (and might be the major influence on retail prices) does not mean that leveraging that monopoly to control retailers is automatically OK.