Between 1995 and 2000 music companies were found to have used illegal marketing agreements such asminimum advertised pricing to artificially inflate prices ofcompact discs in order to end price wars by discounters such asBest Buy andTarget in the early 1990s. It is estimated customers were overcharged by nearly $500 million and up to $5 per album.[1]
In August 2000, theFederal Trade Commission opened an investigation intoprice fixing leading to decreased competition and reduction of discounting among music distributors and retailers.[2] This was followed by Florida and New York under Attorney GeneralEliot Spitzer leading a lawsuit by 41 states against the music industry. A settlement in 2002 included the music publishers and distributors;Sony Music,Warner Music,Bertelsmann Music Group,EMI Music,Universal Music as well as retailersMusicland,Trans World Entertainment andTower Records. In restitution, they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to the public and non-profit groups but admitted no wrongdoing.[3]