February 19, 2004
DISC SETTLEMENT YIELDS CHECKS FOR CONSUMERS, CDs FOR LIBRARIES
General J. Joseph Curran, Jr. announced today that beginning
tomorrow, checks in the amount of $13.86 will be sent to approximately
59,000 Maryland residents who filed claims under the settlement
of an antitrust suit concerning alleged price-fixing by distributors
and retailers of music compact discs.
and more than 40 other states and territories sued the distributors
Bertlesmann Music Group, Inc., EMI Music Distribution,
Warner-Elektra-Atlantic Corporation, Sony Music Entertainment,
Inc., and Universal Music Group, and the retailers Transworld Entertainment
Corporation, Tower Records and Musicland Stores Corporation for
violating antitrust laws.
settlement has three major components. The defendants are making
cash payments totaling $67,375,000 nationwide, to be used primarily
to compensate consumers who purchased pre-recorded music CDs from
January 1995 to December 2000, and who filed valid and timely claims.
The defendants are also providing approximately five and one-half
million music CDs nationwide for distribution by State Attorneys
General to charities, schools and public libraries. In addition,
the defendants have agreed to an injunction which prevents them
from making advertising funds to retailers conditional on advertising
products for sale at a minimum price.
suit, which was filed in federal court in New York in August
2000, alleged that the defendant distributors and retailers illegally
conspired with one another to fix prices at which CDs could be
sold to consumers. The illegal conspiracies allegedly grew out
of the practice in the recorded music industry known as Minimum
Advertised Price, or M.A.P., in which the distributors would pay
for retailers’ advertising in local media, provided the retailers
did not advertise CDs at a sale price below a minimum established
by the distributor. The defendants denied the allegations in the
I am pleased to be able to return value to Maryland consumers who
paid higher prices for CDs as the result of the defendants’ wrongful
Minimum Advertised Price policies,” Attorney General Curran
the court approved the settlement agreement in July 2003, distribution
under the settlement agreement could not begin until
the favorable resolution of a number of appeals. Preparations are
being made to distribute more than 100,000 CD’s to public
libraries, public schools, public colleges and universities, and
community colleges throughout Maryland as early as April 2004.