Universal Music & Video Distribution Corp.and UMG Recordings, Inc.

Last Updated:
In the Matter of Universal Music & Video Distribution Corp.and UMG Recordings, Inc.
FTC Matter/File Number:

9710070

Docket Number:

C-3974

Enforcement Type:

Part 2 Consents

Case Summary

Five distributors of recorded music illegally required retailers to advertise compact discs at or above the minimum advertised price (MAP) set by the distribution company in exchange for substantial advertising payments for various types of media including television, radio, newspaper and signs and banners within the retailers own stores. According to the complaint, large music retailers would lose millions of dollars if they refused to follow the MAP policies. As a result of this policy the retail prices of CD’s increased. Beginning in 1997, distributors increased the wholesale prices for CD’s, and those wholesale prices have continued to rise each year since. Time-Warner Inc. and four other firms, Bertlesmann, Universal Music and Video Distribution Corporation and UMG Recordings, Inc., EMI Music Distribution, and Sony Music Entertainment represent approximately 85 percent of all CD’s purchased in the United States.