State joins in lawsuit against music distributors

Tuesday, Aug. 8, 2000 | 11:06 a.m.

CARSON CITY -- Nevada joined with 30 other states today in filing a federal antitrust suit against the nation's largest distributors of recorded music, accusing them of conspiring to fix prices.

Attorney General Frankie Sue Del Papa said the defendants are charged with engaging in an unlawful scheme designed primarily to stop retail outlets, such as Best Buy, Circuit City and Target, from offering music at deep discounts.

The retailers started offering stiff competition in the early 1990s to music stores based in malls.

The suit, filed in federal court in New York City, seeks triple damages for consumers and assessment of civil penalties against the companies.

The music distributors established a minimum price. And those stores that did not comply faced the loss of million of dollars per year in advertising funds, according to the suit.

Named defendants are BMG Music;Bertelsmann Music Group Inc.; Capitol Records Inc.; which does business as EMI Music Distribution; Virgin Records America Inc.; Priority Records, LLC; Sony Music Entertainment Inc.; Universal Music & Video Distribution Corp.;Universal Music Group Inc.; UMG Recording Inc.; and Warner-Elektra-Atlantic Corp.

Other defendants include Warner Music Group Inc., Warner Bros. Records Inc., Atlantic Recording Corp., Elektra Entertainment Group Inc., and Rhino Entertainment Co.

Del Papa said others included in the suit are retail giants Musicland, which operates more than 1,300 retail outlets under the Musicland and Sam Goody trade names; Trans World, which operates more than 900 stores under the names of Camelot, FYE, Music & Movies, Planet Music, Record Town, Saturday Matinee, Spec's Music, Strawberries and the Wall and MTS Inc., which does business as Tower Records.