The US Supreme Court today declined to review a ruling that reinstated an antitrust lawsuit alleging major record labels conspired to fix prices and terms under which music would be sold over the Internet.
The justices rejected without comment an appeal by a number of companies that included Sony, a unit of Vivendi, Warner Music Group and EMI of the ruling by a US appeals Court in New York.
The appeals court ruled that a federal judge had erred in 2008 in dismissing the lawsuit filed on behalf of people who downloaded music over the Internet. They had sued record labels that control more than 80 per cent of US digital music sales.
The lawsuit accused the record companies of agreeing to the wholesale price floor of about 70 cents a song when rivals began offering music on the Internet at a much cheaper rate.
The appeals court ruled the plaintiffs had described enough facts to suggest an antitrust price-fixing conspiracy and sent the case back for further proceedings before the judge.
Attorneys for the companies appealed and said the case raised important, recurring issues that required the Supreme Court's resolution.
They said the appeals court erred in ruling that a lawsuit can state a claim without alleging sufficient facts under the legal standard that will apply in considering the claim at the summary judgment stage or at trial.
Attorneys for the plaintiffs opposed the appeal and said the appeals court correctly applied the legal standard from recent Supreme Court decisions in considering the facts alleged in the lawsuit.
Chief Justice John Roberts and Justice Sonia Sotomayor recused themselves and did not consider the case.
The Supreme Court case is Sony Music Entertainment v. Kevin Starr, No. 10-263.
Reuters