Free money from music companies

By Gus Bode

Students can stake a claim in Maine lawsuit

Factoid:Consumers can go to www.musiccdsettlement.com to fill out applications. There can only be one claim per person, no matter how much was spent.

Any person who has bought a CD, cassette or vinyl album from January 1995 to December 2000 may be eligible for up to $20 reimbursement.

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Major CD retailers and distributors settled a lawsuit for price fixing in September and agreed to pay more than $67 million in cash payments and about $76 million in CDs.

Illinois was one of 43 states, commonwealths and territories involved in the lawsuit, and was one of the initial investigators into corruption in the music industry. Florida, New York and the Federal Trade Commission were also involved in the initial investigation, and the FTC won a separate lawsuit seeking conduct relief from the distributors’ minimum asking price (map) policy.

Consumers interested in receiving a portion of the money can go to the settlement’s website, www.musiccdsettlement.com, answer three questions that determine if you bought music from a retailer during the specified time period and fill out personal information. Between $5 and $20 will be divided among the eligible applicants as long as the amount per person does not drop below $5.

The cash portion of the settlement, after administrative costs and attorneys’ fees, will be divided among claimants who sign up on the settlement’s website by the deadline.

The defendants in the lawsuit will also have to provide about 7 million music CDs to plaintiff states in the Maine U.S. District Court lawsuit. The music will go to not-for-profit corporations, charitable groups, nursing homes and government groups such as schools and libraries.

Few consumers signed up initially, but Melissa Merz, a spokeswoman for Illinois Attorney General Lisa Madigan, said the rate has picked up considerably in the last few weeks because of advertisements in national publications and national radio programs.

Less than 1.1 million people have signed up nationwide, including about 46,000 Illinoisans. About 8.8 million can register nationwide before the funds dwindle to below $5 per person, at which point it all goes to music-related charities.

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No proof of purchase is necessary to file a claim. Merz said the court could, however, require a random audit to check the claims system.

The FTC’s victory was strictly for conduct relief, but the lawsuit companies settled last year was for monetary relief as well.

Though not all states were involved in the lawsuit, any person in the United States, Puerto Rico, the Northern Mariana Islands, the Virgin Islands, Guam and American Samoa is eligible for reimbursement, even after death.

A person can file on behalf of the deceased on the website and claim back a small portion of a loved one’s purchases.

“The distributors will no longer be able to coerce retailers into raising their prices,” Merz said

Merz said “everyone likes to listen to music” and the goal of the lawsuit was to protect consumers from non-competitive pricing.

According to a court complaint by the plaintiff states, the policy originated as traditional CD retailers responded to the threat of discount retailers, such as Best Buy, Target and Circuit City, by pressuring distributors to implement the minimum price policy to reduce cost competition and help maintain high profit margins. The distributors allegedly levied financial punishments for violations of the policy.

Despite the settlement, the companies have not admitted to participating in any illegal or unethical behavior.

Retailer defendants in the lawsuit include Tower Records, Musicland Stores and Trans World Entertainment. Defendant distributors include Capitol Records, EMI Music Distribution, Virgin Records America, Priority Records, Time Warner, Warner-Elektra-Atlantic, Rhino, Universal, BMG and Sony.

Reporter Greg Cima can be reached at [email protected]

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