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BIG FIVE AGREE TO DO AWAY WITH MAP
Against Wives' Complaints Companies Also Agree Not To Ask For Directions, They KNOW How To Get There
The Federal Trade Commission said a settlement of an antitrust case against the nation's five largest music companies had been reached and it should result in significant price cuts for compact discs.

Officials said the settlement completed a two-year investigation that found the companies used illegal marketing agreements to end a price war, inflate the prices of compact discs and sharply restrict the ability of retailers to offer discounts. The officials estimated that consumers were overcharged by $500 million over the last four years.

In the settlement, which levied no fines, the companies agreed not to make any such marketing agreements.

Robert Pitofsky, the chairman of the FTC, said the settlement would enable retailers to advertise deep discounts once again. He estimated that the savings to consumers could be as high as $17 million a month, or roughly $2 to $5 on many popular discs.

So far, no one has linked the $500 million overcharge with the so-called "lost revenues" the labels have complained about in the MP3.com and Napster cases. Anyone who does so should be considered a communist. After all, that would just be crazy talk.

The marketing agreements, which the FTC said violated federal antitrust law, were between many large and small retailers and the five music companies, which control 85 percent of the $15 billion CD market. The companies that settled the case were Time Warner, which announced earlier this year that it had reached an agreement with the FTC; Sony Corporation of America; the Bertelsmann Music Group; EMI Music Distribution; and Universal Music and Video Distribution. All the companies have denied that the marketing agreements violated the law.

The agreements, known as "minimum advertised price" programs, or MAP, were carried out in an effort by the manufacturers to end a price war earlier in the 1990s by such discounters as Circuit City, Wal-Mart, Best Buy and Target.

If you are a regular reader ofHITS magazine or www.hitsdailydouble.com—and god help you if it's true—the FTC's decision should come as no surprise; both pubs have covered the MAP situation extensively for the past month.

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