Write up to 2 pages: Facts Initial Posting Together, EMI, Sony BmG Music Enterta
ID: 420152 • Letter: W
Question
Write up to 2 pages:
Facts
Initial Posting
Together, EMI, Sony BmG Music Entertainment, Universal Music Group Recordings, Inc., and Warner Music Group Corporation produced, licensed, and distributed 80% of the digital music sold in the United States. The companies formed MusicNet to sell music to online services that sold the songs to consumers. MusicNet required all of the services to sell the songs at the same price and subject to the same restrictions. Digitization of music became cheaper, but MusicNet did not change its prices.
Answer the following questions in your initial posting.
Did MusicNet violate the antitrust laws? Why or why not? Explain using specific legal principles from chapter 46.
Suggest one fact that would alter the outcome of the case. Be creative.
Reply Posting
Address the points raised in a classmate's initial posting. Indicate whether you agree or disagree with your classmate's comments and explain your rationale.
Explain how your classmate's suggested fact would affect the outcome of the case.
Explanation / Answer
Facts of the case:
Law applicable: Antitrust laws that are formed to promote fair competition in the marketplace and protect the consumers from fraudulent and unethical market practices. There are three major antitrust laws including Clayton act, Sherman antitrust act, and the Federal Trade Commission act. Sherman act will be applicable in this case because it governs contracts and conspiracies involving price fixing, rig bids as well as allocation of customers.
Case analysis and decision:
According to Section 1 of Sherman law, “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”
MusicNet has violated the section 1 of Sherman Act. Reasons are specified below:
Conclusion: Hence, it is concluded that MusicNet has violated antitrust laws.
The fact that would alter the outcome of the case would be when MusicNet would have lowered prices than rest of the competitors. In this case, it would be said that competition is working properly.
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