Feb 15, 2006 • 1 min read

More Spitzer subpoenas issued

New York Attorney General Eliot Spitzer has issued a second subpoena to Warner Music over download contracts, which may breach US competition law.

Our good friend Eliot Spitzer - New York's Attorney General - has issued a new round of subpoenas against the major record companies in his ongoing investigations into the contracts that exist between the labels and the main download platforms (not to be confused with his ongoing investigations into payola).

As previously reported, Spitzer is investigating allegations that the contracts violate US competition laws - most probably because of the alleged use of so called "most favoured nation" clauses which means a record company can demand they enjoy any benefits offered to their rivals in unrelated contract negotiations.

Spitzer's office subpoenaed documents relating to the labels' download deals at the end of last year, but Warner Music revealed earlier this week that they had received a second subpoena on 3 Feb this year. Warner revealed that fact in its latest filing with the Securities And Exchange Commission, noting that the subpoena is part of an "industry-wide investigation as to whether the practices of industry participants concerning the pricing of digital music downloads violate Section 1 of the [antitrust] Sherman Act"

In the same SEC filing Warner also revealed that the major label faced a civil lawsuit on the same issue. The case - Richard Feferman et al. v. Universal et al - was filed on 29 Dec in the Superior Court Of California. The Warner documents say that they have been "named in a class action lawsuit brought by consumers based on the same subject matter as the Attorney General's request for information alleging conspiracy among record companies to fix prices for downloads".

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