The US Department of Justice has begun an investigation into allegations that major music labels are price-fixing and monopolising the digital download business. This comes as New York attorney general, Eliot Spitzer, is investigating what the major labels charge Apple to sell their music online.
The Justice Department refused to give specifics identifying the companies being probed, or about how deep would the investigation go. "The antitrust division is looking at the possibility of anticompetitive practices in the music download industry," according to a spokeswoman at the Department of Justice.
Industry experts believe that the four major music labels, Universal Music, Sony BMG, Warner Music and EMI have united out of dissatisfaction with Apple and ITunes. The popularity of the service recently peaked with one customer downloading the billionth legal purchase, but the major labels want to charge more. They allegedly raised the wholesale price of music rights to online retailers such as Apple, who insist on selling single tracks in the US for ninety nine cents.
Legal music downloads have been on the rise within recent years. The profit from digital sales last year reached one billion US dollars.
The four major companies are expected to be issued with subpoenas in the coming weeks.
The Justice Department refused to give specifics identifying the companies being probed, or about how deep would the investigation go. "The antitrust division is looking at the possibility of anticompetitive practices in the music download industry," according to a spokeswoman at the Department of Justice.
Industry experts believe that the four major music labels, Universal Music, Sony BMG, Warner Music and EMI have united out of dissatisfaction with Apple and ITunes. The popularity of the service recently peaked with one customer downloading the billionth legal purchase, but the major labels want to charge more. They allegedly raised the wholesale price of music rights to online retailers such as Apple, who insist on selling single tracks in the US for ninety nine cents.
Legal music downloads have been on the rise within recent years. The profit from digital sales last year reached one billion US dollars.
The four major companies are expected to be issued with subpoenas in the coming weeks.
