Wednesday, January 28, 2004

Music and Copyright Related

Dec 4, 2003, 4:06 pm ET

By Sue Zeidler

LOS ANGELES (Reuters) - A federal judge has approved a settlement that gives discount vouchers to more than 8 million members of various music clubs who had accused record groups of conspiring to fix CD prices.

The settlement, approved by U.S. District Judge D. Brock Hornby in Portland, Maine, on Wednesday, calls for immediate mailing of vouchers providing for 75 percent discounts on regular CD club prices.

The class action lawsuit was filed several years ago against Bertelsmann AG's BMG Music Club, Columbia House and several other CD manufacturers and distributors, alleging they conspired to set prices of CDs sold to music club members.

BMG declined comment, while officials of Columbia House were not immediately available.

Under the settlement, class members will receive up to three discount vouchers, said Michael Jaffe, an attorney for the plaintiffs.

Anyone with a voucher will pay about $4.50 per CD, based on the normal music club price of about $18. Individuals buying CDs with the vouchers will not have to pay the usual extra shipping and handling charges of $2.80.

The lawsuit was filed in the same court as another CD price-fixing suit that was signed by the attorneys general of 43 states and territories and consolidated in Portland in October 2000. Hornby approved a $143 million settlement of that case in June 2003.

That settlement involved a class action suit in which consumers accused major record labels and large music retailers of conspiring to set minimum music prices.

Defendants in both suits included Sony Music Entertainment, EMI Group Plc's EMI Music Distribution, Warner-Elektra-Atlantic Corp., Vivendi Universal's Universal Music Group and Bertelsmann Music Group.

By agreeing to the settlement on Wednesday, the music clubs and distributors denied any wrongdoing.

Venture capital firm Blackstone Group last year bought an 85 percent stake in Columbia House for $410 million from owners Sony Corp and Time Warner Inc .

"This is a reasonable settlement for an extremely complex and difficult case. We encourage all class members to take advantage of the voucher program, which will be in place for the next six months," said Jaffe.