Price-Fixing Charges Upheld

The Federal Trade Commission on Monday upheld charges that three subsidiaries of Vivendi Universal conspired to fix the price of a 1998 recording by the Three Tenors, the agency said.

The FTC’s five commissioners voted unanimously to back an earlier finding that Vivendi’s PolyGram unit had improperly agreed with an AOL Time Warner Inc. subsidiary to halt discounting and advertising to boost sales of recordings based on the tenors’ concert in Paris during the 1998 soccer World Cup.

The Three Tenors -- Jose Carreras, Placido Domingo and Luciano Pavarotti -- have performed together every four years since 1990 at the site of the World Cup soccer finals for a combination live concert and recording session.

The FTC had charged that PolyGram agreed not to discount or advertise the 1990 Three Tenors album and video from Aug. 1, to Oct. 15, 1998. In return, Warner would not discount or advertise the 1994 Three Tenors album and video during this period.

As part of Monday’s order, the FTC barred PolyGram from agreeing with competitors to fix the prices or restrict the advertising of products they have produced independently.

In an opinion ratified by all of the commissioners, FTC Chairman Timothy Muris wrote that the agreement was “antithetical to the fundamental policies of our antitrust laws and will not be countenanced.”

Vivendi executives responded with a statement saying that they “strongly disagree with the decision of the FTC and we intend to vigorously pursue this matter through appeal.”

Monday’s vote upholds a ruling last year by a U.S. administrative law judge, who also concluded that the companies had engaged in anti-competitive tactics.

The FTC first filed the case in 2001. Agency officials accused Warner and PolyGram of forming a joint venture to distribute the 1998 performance of the three renowned singers and agreed not to discount or advertise certain catalog products for a limited time.

Vivendi unit Universal Music Group has said that the “alleged activities” occurred before Universal acquired PolyGram in December 1998 and that they took place for only a brief period.

AOL unit Warner Communications settled the previous year by agreeing to refrain from similar agreements in the future. But Universal Music Group vowed to defend its position in court.