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Twenty-eight states file lawsuit against the record industry

On Tuesday, August 8, 2000, 28 states, including New York and Florida, banded together to file a federal lawsuit against five of the largest record companies and three major music retailers, accusing them of fixing the prices of compact discs. The lawsuit charges the music companies Tower Records, Sony, BMG, Warner Music Group, and Universal Music with inflating the price of CDs by as much as $2, according to New York Attorney General Eliot Spitzer. This suit comes on the heels of an investigation by the Federal Trade Commission that concluded that the companies' pricing policies had led to higher CD prices. However, unlike the FTC investigation, which settled for ending the price fixing, the states' suit is asking for damages. According to the FTC, American consumers may have paid as much as $480 million more than they should have for CDs over the past two-and-a-half years. At the center of the lawsuit is the Minimum Advertised Price (MAP) Program, a program in which music producers pay a certain amount of the costs to advertise an album, and record stores agree to sell the album at or above a set price.
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