US High Court Won't Hear Music, Airline Antitrust Cases
January 10 2011 - 10:49AM
Dow Jones News
The U.S. Supreme Court on Monday declined to consider a pair of
antitrust lawsuits against music labels and airlines.
In the music case, a group of digital-music purchasers alleged
that major record labels conspired to fix prices on Internet-music
downloads. A federal appeals court in New York reinstated the
lawsuit last year, deciding the plaintiffs stated enough of a
factual claim to be allowed to proceed against the music
industry.
The high court, without comment, refused to consider the
industry's bid to overturn that ruling.
In the airline case, a group of travel agents alleged that major
air carriers conspired to reduce and then eliminate the base
commission rates paid to agents. But that case wasn't allowed to go
forward.
A Cincinnati-based federal appeals court, in a divided ruling,
said the travel agents didn't allege facts that plausibly suggested
the airlines engaged in an illegal antitrust conspiracy. The court
said the airlines' actions were more likely explained by lawful,
free-market behavior.
The Supreme Court, again without comment, refused to consider
the travel agents' challenge.
In both cases, the losing parties argued that lower courts
misinterpreted a key 2007 Supreme Court ruling that set new
standards for plaintiffs to move forward in court with antitrust
claims.
The defendant companies in the music case include EMI Music
North America, Sony Corp. (SNE, 6758.TO) and its Sony Music
Entertainment unit, Vivendi SA's (VIV.FR, VIVDY, VIVEF) Universal
Music Group and Warner Music Group Corp. (WMG).
The case, which consolidated a variety of state and federal
lawsuits first filed in 2005 and in 2006, alleged the major record
labels in the U.S. conspired to inflate and maintain the price of
digital music, in part by fixing a high price and restraining the
availability of Internet downloads.
The price-fixing allegedly occurred when record labels
controlling more than 80% of the market created two joint ventures
to distribute music over the Internet and through their business
dealings with third-party licensees.
The defendants in the airline case included American Airlines,
United Air Lines and Continental Airlines.
The travel agents, who filed the lawsuit in 2003, alleged the
airlines began a conspiracy to cut commissions in 1995, which
eventually led major U.S. airlines to eliminate the commissions
entirely.
The cases are Sony Music Entertainment v. Starr, 10-263, and Tam
Travel v. American Airlines, 09-1138.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222;
brent.kendall@dowjones.com