July 10, 1996 in Nation/World

Cd Giants Fixed Prices, Suit For Buyers Contends

Associated Press
 

The nation’s six largest makers of compact discs have been accused of fixing CD prices in a lawsuit that could result in payments to millions of buyers.

Lawyers for two CD buyers sued on Monday and won immediate class-action status, which means other CD consumers can join. The suit does not specify how much it is seeking but limits each individual claim to $5,000.

CDs sell for maybe $12 to $15. The suit alleges the companies propped up retail prices even though refinements in manufacturing and other improvements have cut the cost of making a CD from $3 in 1983 to less than $1 now.

The lawsuit was filed on behalf of anyone who bought CDs from any of the six companies after June 26, 1992.

The companies are EMI Music Distribution; Sony Music Entertainment; Warner Elektra Atlantic Corp.; UNI Distribution Corp., a unit of MCA Music Entertainment Group; Bertelsmann Music Group; and Polygram Group Distributors.

The suit argues the manufacturers strong-armed stores into keeping prices high by suspending some advertising assistance or cutting them off if they sold CDs below certain minimum prices.

© Copyright 1996 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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