A $143.1 million price tag has been set for conspiring to rip off CD buyers.
And the world's five largest music companies and three largest music retailers have agreed to pay up.
The music moguls have decided to settle a CD price-fixing lawsuit brought against them by 41 states and commonwealths. States' attorneys say the music companies and retailers conspired to inflate the cost of CDs from 1995 to 2000, thus violating both federal and state antitrust laws and bilking consumers out of millions of dollars.
(And they wonder why fans resort to MP3-swapping? Yeesh.)
The suit says the companies illegally banded together to set price minimums for CDs, eliminating the possibility of discounts and sales, and virtually destroying price competition among music retailers, a no-no in the land of free trade and lawsuit-happy consumers.
So record label execs from Bertelsmann Music Group, EMI Music Distribution, Warner-Elektra-Atlantic Corporation, Sony Music Entertainment and Universal Music Group and the heads of retailers Musicland, Trans World Entertainment and Tower Records have agreed to settle.
The deal, which still has yet to be approved by a judge, includes $67.3 million in cash to pay back consumers and 5.5 million CDs, valued at $75.7 million, earmarked for music programs though distribution to public entities and nonprofit organizations in each state.
New York State Attorney General Eliot Spitzer said the settlement is a a victory for consumer rights and a huge step in busting future price-fixing schemes.
"This is a landmark settlement to address years of illegal price-fixing," he said in a statement. "Our agreement will provide consumers with substantial refunds and result in the distribution of a wide variety of recordings for use in our schools and communities."
The record labels and distributors, however, disagree. They claim they wanted to put the case behind them to end the pricey legal costs of keeping it in court and say they haven't done anything illegal. Statements of several of the defendants "deny any wrongdoing."
"We were wrongly accused and nobody admitted any wrongdoing," Trans World Entertainment spokesman John Sullivan told the Associated Press.
"We have made a business decision to settle these matters and avoid continuing with expensive and protracted litigation," said Warner-Elektra-Atlantic in a statement. "The settlement made sense to us from a business perspective and enables WEA to put this matter behind us."
This latest legal battle is yet another blow to the ailing recording industry. Recently, several record companies and industry groups have banded together and enlisted the help of music stars to end the loss of sales they've incurred at the hands of Web music pirates.
A host of TV spots starring the likes of Britney Spears, Nelly, Sheryl Crow and others are hoping to help staunch the multimillion-dollar flow of money loss the recording industry is feeling, due in part, music companies say, to illegal downloading.