Sony Opposes Class Cert. in Music Download Price-Fixing MDL

Sony BMG Music is opposing a bid to certify a nationwide class of consumers who allege the music corporation, along with other music distributors, allegedly plotted to inflate the price of digital music downloads, calling the plaintiffs’ claims meritless and too varied.

Last week, Sony asked a New York federal court to dismiss a class certification bid, stating that plaintiffs’ claims are fundamentally flawed.

Sony argues that because the allegations of a price-fixing conspiracy between Sony BMG Music Entertainment, Warner Music Group, Universal Music Group Recordings Inc., and Capitol Records Inc. have been rebutted by multiple government investigations, the motion should be denied.

Additionally, Sony says the plaintiffs’ motion fails to establish whether putative Class Members in fact paid more for the music downloads they purchased as well as for damages on a class-wide basis.

“While Plaintiffs’ motion seeks to show that proof of liability and damages will be a one-size-fits-all exercise, the reality is that class treatment is precluded by numerous individualized issues that vary across the millions of consumers packed into Plaintiffs’ proposed classes,” the music labels said in their motion opposing the plaintiffs’ request for class certification.

Since 2014, the plaintiffs have been trying to certify one nationwide Class for injunctive relief on the alleged federal antitrust claims and nine Classes for damages under the laws of the District of Columbia, Arizona, California, Florida, Iowa, Michigan, Minnesota, Nevada and South Dakota.

At the center of the plaintiffs’ complaint is that the major music labels all conspired to fix wholesale prices of music downloads at $0.70, and that buyers paid inflated retail prices for digital music downloads for more than 10 years.

The proposed antitrust class action was brought forth in 2005 on the heels of new reports that the New York Attorney General was investigating the music industry’s pricing on music downloads.

The NY Attorney General’s investigation was not the first instance of the Government’s scrutiny of the Defendants’ pricing of music downloads. Over the past 15 years, five separate investigations have looked at these and other related issues involving digital service providers. Not one has found the Defendants engaged in anticompetitive conduct, let alone an alleged price-fixing conspiracy, Sony claims.

“The investigating agencies requested and received tens of thousands of pages of documents from Defendants that Defendants in turn have produced to Plaintiffs here. After reviewing those documents, the NYAG and the DOJ closed their investigations without any findings of wrongdoing,” the music labels argue.

Furthermore, the music labels assert that “if this case were to proceed to the merits, defendants would show not only that the record is devoid of evidence of the claimed conspiracy, but that substantial evidence testifies to the absence of any such conspiracy.”

Still, even in the absence of these investigations, the record labels contend that the buyers fail to show, as required by law, that the “millions of putative class members are ascertainable.”

According to Sony’s argument for denying class certification, the plaintiffs cannot show that common questions predominate. Essentially, in order to be granted certification, injury and damages from the alleged price-fixing conspiracy must be established for every putative Class Member by reviewing each individual’s track to ensure they were legitimately purchased and not illegally downloaded.

“In other words, the only way to know whether any particular class member was injured by the alleged conspiracy — and if so, what damages resulted — would be to examine on a purchase-by-purchase basis all the music that each such class member bought,” the music labels argue. “Without objective evidence, there is no feasible way to determine class membership. It is unreasonable to expect that potential class members will remember the details of the music download purchases made over a 15-year period.”

Judge Preska, who is overseeing the multidistrict litigation, ordered the plaintiffs in 2014 to disclose if they illegally pirated the Defendants’ music.

The plaintiffs are represented by Christopher Lovell, Craig Essenmacher, Gary Jacobson and Merrick Rayle of Lovell Stewart Halebian Jacobson LLP and Alexandra S. Bernay of Robbins Geller Rudman & Dowd LLP.

The Sony, UMG Digital Music Download Class Action Lawsuit is In Re Digital Music Antitrust Litigation, MDL No. 1:06-md-01780, in the U.S. District Court for the Southern District of New York.