Refund Checks Going Out to Music Buyers

Millions of music fans will soon begin receiving refund checks as part of a $143-million settlement of a price-fixing lawsuit against five distributors and three retailers.

Checks for $13.86 each were mailed Friday to the 3.5 million consumers who bought CDs, vinyl records or cassettes between 1995 and 2000 and filed refund claims by last March.

Attorneys general for 43 states and territories filed the antitrust lawsuit in 2000, alleging that the companies conspired to illegally raise the prices of their products by imposing minimum pricing policies. All the companies denied wrongdoing.

“The refunds provide a measure of much-deserved justice to consumers in California and across the nation who were gouged because of the defendants’ deals to stifle competition and artificially inflate music CD prices,” said California Atty. Gen. Bill Lockyer, adding that 385,637 Californians were slated to receive checks.

About $47 million was being paid in refunds. The companies also were giving 5.6 million music CDs, worth about $77 million, to libraries and schools across the country. About $20 million of the settlement was used to pay attorneys’ fees and other costs.

Starting in May, California’s public schools and libraries are to receive about 665,000 CDs valued at about $9 million, Lockyer said.

A federal judge in Portland, Maine, approved the settlement in December. Defendants included Sony Music Entertainment Inc., EMI Music Distribution, Warner-Elektra-Atlantic Corp., Universal Music Group and Bertelsmann Music Group, as well as retailers Tower Records, Musicland Stores Inc. and Trans World Entertainment Corp.

The settlement barred the companies from entering into any agreements to control the prices at which retailers sell their CDs. The companies also can’t refuse to deal with retailers that opt to sell CDs below the suggested prices.