Justice Dep't Steps Up Musicnet, Pressplay Probe

The Justice Department (DOJ) last week sent subpoenas to U.S. music companies, the Recording Industry Association of America (RIAA), and MusicNet and Pressplay in its continuing investigation into possible anti-competitive aspects of the yet-to-launch online subscription services. The subpoenas ask for documents concerning licensing terms, rates, and negotiation conditions for online music services.

In a statement, the RIAA says, "We will, of course, cooperate fully with the Department of Justice's investigation. We are confident that, once it has gathered the relevant facts, the Department will conclude that our actions have been fully compliant with all applicable laws. Indeed, the steps we have taken to facilitate the legitimate online marketplace have been pro-competitive and beneficial to consumers."

The Federal Trade Commission and DOJ have already interviewed Webcasters and retailers. A DOJ spokeswoman says the agency does not comment on ongoing investigations.

The investigation follows a probe by European regulators in June, after independent music producers complained that MusicNet and Pressplay could potentially exclude them from online distribution deals. The European Commission's investigation is still at an early stage, a spokesperson said yesterday (Oct. 15).

The spokesperson denied as "gross speculation" a published report in the British Sunday press that the commission was prepared to ban MusicNet and Pressplay before their planned launches later this year. "It is too early to come to any conclusions," said the spokesperson. However, it was noted that the services raised "potentially a number of issues" that merit close attention.