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N.Y. Investigates Download Prices

Spitzer subpoenas three music giants for digital music info

December 27, 2005 12:00 AM ET

New York Attorney General Eliot Spitzer has subpoenaed three major labels in an antitrust investigation into digital music download prices, according to reports.

Warner Music Group stated on Friday that it was subpoenaed for information "concerning pricing of digital music downloads" last week, while the Wall Street Journal reported that Vivendi Universal and Sony BMG Music Entertainment have also been subpoenaed. "We are cooperating fully with the inquiry," stated a Warner spokesperson.

The investigation seems to point to the music companies' upcoming licensing renegotiations with Apple for its iTunes online music store.

In September, Apple Chief Executive Steve Jobs called the music industry "greedy" for considering raising digital download prices. The major music companies continue to discuss the possibility of more varied pricing of downloads at the iTunes music store, which since its inception has universally charged 99 cents per track. Warner CEO Edgar Bronfman, speaking before an investor conference that month, stated, "There are some songs for which consumers would be willing to pay more and some we'd be willing to sell for less."

In November, Warner and Sony BMG agreed to pay a settlement -- Warner $5 million and Sony $10 million -- in a New York State payola probe that proved gifts from music giants had frequently been exchanged for radio play.

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