Elderly Women Sue Music Industry over Price-Fixing

Several class-action lawsuits have been thrown against the music industry in the wake of its admission that it engaged in a price-fixing scheme known as Minimum Advertised Pricing, or MAP. The policy arose as a response to widespread CD price wars in the early 1990s that drove prices of some CDs below $10 each, and was intended to prevent mass-market merchandisers from offering CDs below cost as lures to pull customers into stores. The MAP policy was officially discontinued after the Federal Trade Commission reached a settlement with the industry in May of this year.

One of the more interesting suits is a little-noted case filed in Las Vegas this June. Two residents of that city, Norma Filhaber and Beverly Berganzo, filed a complaint seeking class-action status the first week of June in Clark County District Court, naming as defendants BMG Music Inc., Sony Music Entertainment Inc., Time Warner Inc., Capitol Records Inc., and Universal Music & Video Distribution Corp. Their complaint alleges violations of the Nevada Antitrust and Deceptive Trade Practices Act by instituting a "minimum advertised pricing" policy beginning January 1, 1997. The plaintiffs maintain that the MAP policy caused CD prices to remain at "artificially inflated and non-competitive levels" and "unreasonably restrained, suppressed, and eliminated" price competition throughout Nevada, according to Grace Leong of the Las Vegas Sun.

Both of the plaintiffs are over 70 years of age, and Berganzo's mobility is limited by her use of a wheelchair. Their suit claims not only that they overpaid for the music they bought, but that the music industry discriminated against them because of their age and disabilities. Calling his clients' case "unique," attorney Noel Gage said, "We're championing the cause of the elderly in our case. . . . We have statutes that specifically prohibit discrimination against the elderly and disabled. . . . We have a sizable number of retirees in Nevada. Most of them are in the golden years of their lives and don't have a whole lot of money. So $5 or $10 means a lot to them."

How much money any individual Nevada retiree might see as a result of a settlement isn't known, but the potential return for Mr. Gage and colleagues pursuing similar cases in other states is in the millions. The five distributors named as defendants in the Nevada case account for about 85% of the approximately $14 billion in prerecorded music sold annually in the US. FTC officials have estimated that the buying public overpaid by as much as $480 million collectively on CD purchases nationwide during the five years the policy was in force. Between 15 and 20 class-action suits are believed to be in process nationwide against the music industry, the Sun stated.