by George Ziemann

Once upon a time, long ago, way back in 1994, The U.S. Dept. of Justice thought that perhaps, just maybe, this bunch of foreign record labels was trying to monopolize the market for recorded music.

There were actually six labels then and, between them, they owned about 86 percent of the market, not just here, but globally. Here are the US percentages for 1994, according to the DOJ:

Warner, 21.6 percent
Sony, 16.1 percent
PolyGram, 11.3 percent
EMI Music, 12 percent
BMG, 13.9 percent
MCA, Inc., 11.4

Moreover, the DOJ submitted that the majors had:

(1) created a web of "copyright societies" that collectively negotiate licensing fees and thus may have fixed the price of the intellectual property rights to pre-recorded music and music videos;

(2) formed an international network of digital radio and music video programming joint ventures which may operate to raise the price of music videos supplied to all programmers or tend to eliminate competition in the music programming market; and

(3) entered into collateral agreements supportive of an international price-fixing scheme.

Then they filed with the courts to make the labels cough up documents, they all responded the same -- the US Dept. of Justice had no authority over them. They were foreign companies and our laws did not necessarily apply.

I don't know what happened with this particular investigation, unless it morphed into the MusicMatch/PressPlay inquiry, but it's pretty easy to go back over the DOJ's list and say, yep, they did that, they did that, and, surprise surprise, they did that, too.

And more.

Mysteriously, after the fact, nothing happened. They let the PressPlay thing drop because the labels had done such an inept job of that approach ($2.49 for a song...). Sure the FTC did nail them for price-fixing, and, oh yeh, there are still those "copyright societies" like the RIAA.

But now it's okay.

Ten years ago, the majors didn't have to answer to the DOJ because they were foreign companies. They were above the law.

Today, the DOJ works for them.

And they say crime doesn't pay.

I can practically feel the weight they'll be feeling when this all finally comes down on them...

Are the labels still foreign owned?

If so, then they have no authority to come after US citizens, do they?

Each and every one of them.

Unbelievable. Copyright carpetbaggers have taken over congress.

Good article, gdZ.

This information shouldn't be any surprise to folks who have some idea as to the current state of our copyright laws.
If only we could get enough money together to publicize how ridiculous our copyright laws have become.

Go back to a 14 + 14 yr on copyright life, and the problem of "copyright societies" would be mitigated. Newer creations would be protected, but older ones could enter the public domain and thus serve to 'keep a lid' on the prices of newer creations.

Extremely long copyrights have not allowed for as much price manipulation in, say, literature because there is a lot of good classic literature that was created over 100 years ago. But this is not the case for recorded film and music.
Much of the music may have been CREATED over 100 years ago, but it was not RECORDED over 100 years ago. And recordings are, of course, copyrightable.

I know this doesn't have much to do with the article, but I got my CD Settlement checks in the mail the other day, was wondering if everybody else got theirs too.

The mailbox will be checked today, hopefully. Have to make sure it's checked before 5.

and now arnold and oral hatch want to let foreign born politicians run for president as well. why not just elect the riaa to run the world?

this is too depressing

Download the WordPerfect version

-------------------------------------------------------------------------------- Page 1

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Petitioner,

v.

TIME WARNER, INC., et al.,

Respondents. )
)
)
)
)
)
)
)
)
)

Civil Action No.________


MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF PETITION
TO ENFORCE CIVIL INVESTIGATIVE DEMANDS

INTRODUCTION

The United States has filed a petition to enforce Civil
Investigative Demands (CIDs) issued by the Antitrust Division of
the United States Department of Justice to Time Warner, Inc.
(Warner); Sony Corporation of America (Sony); PolyGram Holding,
Inc. (PolyGram); EMI Music (EMI); Bertelsmann, Inc. (BMG); and
MCA, Inc. (MCA), commonly referred to in the music industry as
the "majors." The CIDs seek information related to an antitrust
investigation of the majors' collective and potentially
anticompetitive conduct in the United States and abroad. The CID
document requests now at issue seek only documents located in the
United States. Although the majors have produced some documents
in response to the CIDs, they claim that the United States lacks
jurisdiction to investigate any activities that occurred abroad;
with minor exceptions, they have refused to produce any
-------------------------------------------------------------------------------- Page 2
information and documents that in their opinion relate only to
foreign activities.
The majors claim that under no set of circumstances
could Sherman Act jurisdiction apply to their foreign conduct.
However, the United States has reason to believe that, acting
through various "copyright societies" and joint ventures--
including music video and "digital radio" ventures formed to
conduct business in the United States--the majors may have
entered into a worldwide series of related agreements designed to
dominate, discipline, eliminate or extract monopoly prices from
companies providing high-technology audio and music video
programming services via cable, satellite and wire transmission
(hereinafter "music programming") in all major geographic
markets. In addition to the domestic effects arising from the
operation of the American components of the alliance, it is
likely that foreign components substantially affect the domestic
and export commerce of American music programming companies.
The Court should grant the petition and order the
majors promptly to produce the documents and information sought
by the CIDs for the following reasons. First, absent arbitrary
government action or a clear absence of jurisdiction based on
settled law and undisputed facts, the United States has the
authority to investigate all factual issues related to possible
violations of the antitrust laws, including issues relating to
jurisdiction. The majors cannot contend the investigation is
arbitrary, nor can they reasonably claim that the undisputed
-------------------------------------------------------------------------------- Page 3
facts, as a matter of law, foreclose the exercise of U.S.
antitrust jurisdiction over their activities. Accordingly, the
Court need not address the factual questions relating to ultimate
jurisdiction but may rule, simply, that the United States is
entitled to U.S.-located information and documents relevant to
conduct that may be covered and prohibited by the Sherman Act.
Second, should the Court address the issue, it appears
that United States courts will have antitrust jurisdiction over
much of the majors' foreign activity. In this regard, the
foreign conduct may form part of a global conspiracy having U.S.
members, components and effects. Moreover, the foreign conduct
by itself may have a "direct, substantial and reasonably
foreseeable effect" on domestic and export commerce. 15 U.S.C.
§6a.
Third, evidence of the majors' foreign activity is also
relevant, discoverable and ultimately admissible to show the
purpose and character of the joint ventures formed in the United
States. Thus, even were United States courts to lack antitrust
jurisdiction over the majors' foreign conduct, the Department
would nevertheless be entitled to obtain U.S.-located information
and documents regarding such activity in order to evaluate the
nature and intent of domestic transactions that the majors
concede to be encompassed by the Sherman Act.
STATEMENT OF FACTS
This investigation has barely proceeded beyond the
preliminary stages. The following is a brief summary of the
-------------------------------------------------------------------------------- Page 4
preliminary evidence that has led to, and is being developed in,
the ongoing investigation.
I. Background.
The majors and their affiliates collectively account
for approximately eighty to eighty-five percent of the U.S. and
world-wide markets for pre-recorded records, tapes and compact
discs (the "record market"). Although individual market shares
fluctuate from country to country, it is believed that the eighty
percent figure remains relatively constant throughout the world.
Warner, possessing the largest U.S. market share, is an American
company.1 The other CID recipients are
large domestic subsidiaries of foreign parents.2
Beginning in the late 1970s and early 1980s, music
companies began to produce short movies, known as "music videos,"
designed to promote record sales by providing a visual experience
to accompany the music recorded by artists. Although music
videos can be sold directly to consumers or licensed to bars and
nightclubs, by far the most important outlets are music video
-------------------------------------------------------------------------------- Page 5
programmers who disseminate the videos broadly over networks
carried on cable and satellite television systems. The majors
account for at least ninety percent of the music videos aired by
music video programmers.
In the 1990s, several innovative companies began
providing "digital radio" services through which multiple
channels of CD-quality audio programming is delivered via cable
or satellite to consumers in their homes. Subscribers pay a
monthly fee for this service over and above the charge for
"basic" cable or satellite service. The vast majority of music
played on digital radio networks originates with the majors.
A. Programmers.
It is believed that the United States leads the world
in the domestic broadcast and export of music programming
services. Thus far, the United States has identified six U.S.
music video and digital radio programmers that may be affected by
the majors' foreign and domestic conduct.
1. Gaylord Entertainment Company, Inc.
Gaylord Entertainment Company, Inc. (Gaylord) is the
parent company of The Nashville Network (TNN), Country Music
Television (CMT) and Z Music Television (Z). Both TNN and CMT
air country music programming. TNN delivers country life-style
programming consisting of country music videos and original
programming such as outdoor programs and car racing. CMT is
devoted entirely to music video programming. Z broadcasts
contemporary Christian music videos mixed with original
-------------------------------------------------------------------------------- Page 6
programming consisting of interviews, news, information and
specials. All three networks originate from Nashville,
Tennessee, and are broadcast via satellite and cable television
in the United States, Canada and Mexico.
In 1992, Gaylord launched CMT Europe, a music video
programming service currently reaching approximately eight
million homes in Europe. The music videos and interstitial
material3 shown on CMT Europe's network
are assembled into a unified block of programming in Nashville,
Tennessee, and transmitted via satellite "uplinks" to cable
systems and satellite dishes throughout Europe. From the point
of assembly in Nashville to the point of delivery to the consumer
in Europe, the content of the signal remains the same.
In October 1994, Gaylord launched its CMT Pacific
service, which broadcasts to Asia and the Pacific Rim, including
Australia and New Zealand. CMT Pacific's programming is
identical to that of CMT in the U.S., except that U.S.
commercials are removed and new custom material is inserted at a
facility in California, from which the signal is beamed to a
satellite for distribution in Asia and the Pacific Rim. Gaylord
has announced plans to create a service in 1995 for Central and
Latin America.
2. Viacom International, Inc.
-------------------------------------------------------------------------------- Page 7
Viacom International Inc. (Viacom), a subsidiary of
Viacom, Inc., is headquartered in New York City. MTV Networks, a
division of Viacom, operates the MTV and VH-1 music video
programming services. MTV's programming consists of music videos
in a rock/pop/urban format, interstitial material and long-form
original programming. Between thirty and forty percent of MTV's
domestic programming consists of original programming developed
and produced in the United States, and much of that programming
is exported to Viacom's foreign subsidiaries. Similarly, VH-1's
programming contains a mix of music video and original
programming.
Viacom's music services reach over 250 million homes
throughout the world. In addition to MTV, Viacom currently has
four international MTV affiliates: MTV Europe, MTV Japan, MTV
Latino, and MTV Brasil. A fifth international MTV affiliate, MTV
Asia, was on the air from September 1991 to May 1994. Viacom
plans to re-launch MTV Asia in English and Mandarin later this
year and has additional plans for individual countries in Asia.
Recently, Viacom launched its VH-1 service in the United Kingdom.
All of Viacom's foreign programming incorporates MTV's or VH-1's
logo, formats, original programming and interstitial material as
well as a substantial number of U.S.-made music videos.
In Europe, Japan, Brasil and Asia, Viacom provides or
will provide its service through subsidiaries formed in the
region where the service is provided, with the subsidiary
incorporating some foreign videos and making other programming
-------------------------------------------------------------------------------- Page 8
adjustments required to tailor the service to the local culture.
MTV-Latino, however, is assembled in the United States and beamed
unchanged from an uplink facility in Florida to a satellite, from
which it is distributed to parts of the United States and most of
Central and South America.
3. Black Entertainment Holdings, Inc.
Washington, D.C.-based Black Entertainment Holdings,
Inc. owns the BET Cable Network ("BET"). BET is the first and
only basic cable network that specifically targets the viewing
interests of African Americans. The "footprint" of satellites
carrying BET encompasses Canada and the Caribbean countries. BET
distributes its U.S. music video programming to Identity
Television Limited (Identity), a London-based cable service,
targeting viewers in the United Kingdom. BET loaned start-up
capital to Identity and holds an option to purchase an equity
interest in the venture. BET sends tapes of original programming
that incorporates music video programming, such as "Caribbean
Rhythm" and "Rap City," to the United Kingdom via courier.
Similarly, BET delivers original programming, some of which
incorporates music videos, to South Africa, Zimbabwe, Kenya,
Tanzania and Uganda. In 1995, BET plans to launch a jazz music
video channel, first in the U.S., Canada and the Caribbean, and
then expanding to Europe and other regions.
4. MOR Music TV
New entrant MOR Music TV of St. Petersburg, Florida,
uses music video programming as a vehicle for direct over-the-
-------------------------------------------------------------------------------- Page 9
phone selling of compact discs and cassettes. The operating
premise is this: while a music video is being played, a
computer-generated L-shaped menu appears on the viewer's screen
providing a telephone number to call and describing the artist,
song, album and price of a CD. Operated as a video "record
club," MOR Music TV also sells music-oriented material such as
promotional T-shirts. The company plans to expand its music
video home-shopping service into Europe in 1995. All programming
decisions will be made in the United States, and the plan is to
beam the channel from the United States via satellite to the
United Kingdom, where it will be delivered unchanged to
consumers. A joint venture partner will help distribute
merchandise overseas.
5. Video Jukebox Network, Inc.
"The Box" is a service of Video Jukebox Network, Inc.
(VJN), headquartered in Miami, Florida. The Box is a viewer-
interactive music video television service that operates 24 hours
per day. Through a combination of technologies, viewers may
select music videos by choosing them from a menu appearing on
their television screens. The order is placed by making a "900"
number telephone call. A "box" consisting of a computer, video
cassette recorders, and a laser disc player is located in the
viewer's local cable company office or broadcast station. When a
telephone order is received, the "box" programs the order and
cues the videotape or laser disc, which then transmits the music
video to everyone receiving the signal. Typically, a selected
-------------------------------------------------------------------------------- Page 10
video appears on the viewer's screen within twenty minutes.
Similar to an ordinary juke box, no music videos are played if no
one makes a call. Currently, VJN offers its music video
programming service in the United Kingdom and plans to extend its
service throughout Europe and to other regions. A London-based
affiliate has discretion over programming. However, the laser
disc containing a "menu" of music videos is produced in the
United States and then sent by VJN to the United Kingdom. VJN
also sends the "boxes" to the United Kingdom. Maintenance and
repair of the boxes is performed in the United States.

6. International Cablecasting Technologies, Inc.
International Cablecasting Technologies, Inc. ("ICT")
d\b\a Digital Music Express ("DMX"), operates a twenty-four hour
subscription digital radio service. DMX offers thirty channels
of CD-quality audio programming with no commercial or dee-jay
interruption. DMX uses remote control devices that serve the
twin functions of permitting the subscriber to change channels
and of displaying information (e.g., the artist and song title)
on a screen incorporated into the device.
ICT launched its DMX service in Europe in 1993. As
with CMT, MOR Music TV and MTV-Latino, the DMX service is
"packaged" in the United States and beamed, through several wire
and satellite connections, to European subscribers without any
change in programming content. In 1995, ICT intends to launch a
direct-to-home satellite service that will dramatically increase
-------------------------------------------------------------------------------- Page 11
its exposure. ICT projects over two million European subscribers
by the year 2000.
B. The Supply of Music Videos in the U.S.
The principal focus of the investigation is on access
to music programming inputs. The majors control access to
records and music videos that they produce or contract with
others to produce. A collective refusal to physically deliver
music videos to programmers, or a collective decision to charge a
high price before making such a delivery, might adversely affect
programmers' ability to compete. More importantly, the majors
also control the various intellectual property rights that attach
to their records and music videos. The nature of these
intellectual property rights, and the majors' use of them,
require some elaboration.
Depending on international treaties and the laws of
various countries, a music video may contain several major
copyright and other intellectual property rights that must be
licensed before a programmer is free to air the video. For
present purposes, the most important of these is the "public
performance right" in the sound recording of the musical
composition and the video. This right does not exist under the
laws of the United States but is often protected in other
nations. A programmer operating in England, for example, cannot
broadcast a music video without first obtaining a license for the
right to "perform" the video. Typically, the music company holds
of this right.
-------------------------------------------------------------------------------- Page 12
Similarly, many countries have created a performance
right in music companies for pre-recorded music such as records,
CDs and tapes. Again, that right does not exist in the United
States, although the music industry has sought legislation to
create such a right applicable to digital (as opposed to
broadcast) radio transmissions. For the moment, at least, a
digital radio programmer operating in the United States can buy a
CD from a retailer and broadcast the music over its system
without a license from the music company. In Europe, on the
other hand, the programmer would violate the music company's
performance right if it did not first obtain a license.
In the United States, music video programmers typically
pay nothing for the music videos they broadcast on their
networks. This has less to do with the absence of a performance
right than with the dynamics of the market. Music videos,
although products in themselves and essential elements of a music
video programmer's service, are used by the majors principally as
a promotional tool for records. It is considered essential for a
music company's music videos to appear as often as possible on
programmers' networks. Although the music companies would prefer
to receive compensation for music videos, individually they lack
the economic power to force programmers to pay. As with other
forms of advertising, the benefits accruing to record sales
outweigh the costs of production.
C. Collective Licensing.
Outside the United States, the majors have refused to
-------------------------------------------------------------------------------- Page 13
license the rights to their music and music videos except through
associations called "copyright societies".
The International Federation of the Phonographic
Industry ("IFPI") is an international copyright society which,
among other things, guards against copyright piracy and advances
the music companies' legislative agenda throughout the world.
Beneath the IFPI umbrella, the majors have formed national
copyright societies in many countries. In the United Kingdom,
the music video copyright society is Video Performance, Limited
("VPL"), and the copyright society having jurisdiction over
digital radio is Phonographic Performance, Limited ("PPL").
Although these copyright societies have numerous member music
companies, they are controlled by the majors.
In addition to their other functions, the copyright
societies act as collective licensing bodies for performance
rights. As a condition of membership in VPL, for example, a
music company assigns or exclusively licenses the rights to its
music videos to VPL.4 In order to play the same
videos on their -------------------------------------------------------------------------------- Page 14
European networks as they do on their channels in the United
States, The Box, Viacom, CMT, BET and MOR Music TV must pay a
blanket licensing fee to VPL for the rights to all U.S.- and
foreign-produced music videos. In the case of digital radio
programmers, the fee would be paid to PPL. The fee demanded is
typically 20 percent of all revenues, though in the case of The
Box the initial demand was a staggering 50 percent of revenue.
Pursuant to various agreements and formulas, VPL or PPL then
distributes the fees to the other affected copyright societies
and to the majors.
It appears that copyright societies similar to VPL
exist in almost every European country, Canada, Israel, Australia
and New Zealand. They may exist in other countries. In Asia,
IFPI appears to act as the collective licensing authority. At
least in Sweden, Asia and Australia, programmers appear to be
-------------------------------------------------------------------------------- Page 15
subject to a 20-percent demand. In Latin America, although no
copyright societies are yet in place, the majors may nevertheless
be collaborating on license fees charged to MTV-Latino, each
demanding similar fees derived from the 20 percent benchmark set
by copyright societies in other regions.
On June 10, 1992, MTV filed a complaint with the
Commission of the European Communities (EC) alleging that the
majors, through VPL and IFPI's collective licensing practices,
had created a price-fixing cartel. In a Statement of Objections
issued March 10, 1994, the Commission preliminarily concluded
that the collective licensing provisions violated Articles 85 and
86 of the Treaty of Rome, which govern competition policy in the
European Union.
After the filing of the European complaint, the EC
brokered an interim licensing agreement between Viacom and
VPL/IFPI. With some modifications, it extended an earlier
licensing agreement that capped payments at 15 percent of
revenue. When Viacom recently attempted to expand its service
into Spain and Czechoslovakia, regions not covered by the EC-
brokered agreement, IFPI wrote to Viacom's customer broadcast
stations saying that Viacom did not have the right to perform its
videos in those countries. Viacom is facing a current demand of
20 percent of revenues in order to expand its operations into
these and other regions.
D. Joint Ventures.
Beginning in 1992, the majors began forming or joining
-------------------------------------------------------------------------------- Page 16
music programming joint ventures that compete directly with
existing programmers.
DCR is a U.S. joint venture among three of the majors
(Sony, Warner, and EMI), a cable equipment manufacturer, and six
cable television multiple system operators (MSOs). The three DCR
music company partners account for 50 percent of the U.S. record
market, and each holds an 11.6% interest in the DCR joint
venture. At least two of the remaining majors, BMG and PolyGram,
may have been invited to join the DCR joint venture. When Warner
and Sony joined the venture in 1992, DCR agreed to pay each music
company 2% of revenue, and later agreed to pay the same amount to
EMI when that company joined.5 A European version of the DCR
joint venture has been formed in Europe, with Warner owning a
controlling interest. Details of that transaction are unclear.
The majors (four of the six) have created one music
video programming joint venture in Germany and are in the process
of creating a similar joint venture in the United States (five of
the six) and Asia (four of the six). As reported in the trade
press, each of these ventures will be targeted at MTV's audience,
though the ventures appear to have the capacity to compete
against programmers operating in other niches of the music
programming market. Again, it is believed that other majors have
-------------------------------------------------------------------------------- Page 17
been invited to join, or have expressed interest in joining,
these ventures. It is believed that further joint ventures are
being planned.
II. Procedural History
The Department of Justice is currently conducting an
investigation into possible violations of the Sherman Antitrust
Act, 15 U.S.C. §§ 1 and 2, in connection with the restraint or
monopolization of domestic and international markets for cable,
wire, and satellite-delivered music programming.
On July 7, 1994, CIDs were issued to Warner, Sony, EMI,
BMG and PolyGram by the Department directing the companies to
produce documentary material and to answer interrogatories
described in the attached schedule by August 15, 1994. A CID and
schedule were issued to MCA on July 18, 1994 directing that
company to respond by August 22, 1994. With the exception of the
CID addressed to Warner, the CID document requests were limited
in the first instance to documents located in the United
States.6 In the case of Warner, the
initial search for documents has been limited by agreement to
U.S. entities represented to be principally involved in the U.S.
joint ventures.
The United States has granted substantial extensions of
time in which to respond to the CIDs and has reached agreement
with the parties clarifying or reducing the burden of various
-------------------------------------------------------------------------------- Page 18
interrogatories and document requests.7
Each of the majors has produced some information and documents
related to the domestic joint ventures described above. With
respect to foreign activities, however, the majors have uniformly
objected to producing information or documents related to foreign
activities. With minor exceptions, no documents relating to
foreign activities have been produced.8
The petition to enforce is brought pursuant to Section
104(a) of the Antitrust Civil Process Act, 15 U.S.C. § 1314(a),
which provides for such an action.





ARGUMENT
I. Unless Jurisdiction is Plainly Lacking
Based on Clear Authority and Undisputed
Facts, the Government Has the Right to
Investigate All Factual Issues Relating
to a Potential Antitrust Violation,
Including Issues Relevant to
Jurisdiction.
-------------------------------------------------------------------------------- Page 19

In ruling on the instant petition, the Court need not
address the complex legal and factual issues relating to its
ultimate subject-matter jurisdiction over the majors' foreign
activity. The threshold and dispositive issue is whether the
Government is entitled to investigate the factual basis for an
antitrust claim, including evidence regarding jurisdictional
questions, through a CID. Clearly, it is.
Section 102 of the Antitrust Civil Process Act (ACPA)
provides that a CID may issue
[w]henever the Attorney General, or
the Assistant Attorney General in
charge of the Antitrust Division of
the Department of Justice, has
reason to believe that any person
may be in possession, custody, or
control of any documentary
material, or may have any
information, relevant to a civil
antitrust investigation . . . .

15 U.S.C. § 1312(a). The term "antitrust investigation," in
turn, means "any inquiry conducted . . . for the purpose of
ascertaining whether any person is or has been engaged in any
antitrust violation . . . ." 15 U.S.C. § 1311(c).
Whenever an antitrust investigation encompasses some
overseas conduct, "ascertaining" the existence of an "antitrust
violation" necessarily entails an inquiry into the nature of that
conduct and whether the activity triggers U.S. jurisdiction under
the antitrust laws, i.e., whether there is "conduct" involving
"commerce with foreign nations" that has the requisite impact on
domestic, import or export commerce. See 15 U.S.C. §§ 1-2,
6a; -------------------------------------------------------------------------------- Page 20
Hartford Fire Ins. Co. v. California, 113 S.Ct. 2891 (1993).
Logically, therefore, CID responses that shed light on the
existence, nature or intent of the foreign conduct and its
effects constitute "information" and "documentary materials" that
are "relevant to a civil antitrust investigation." 15 U.S.C. §
1312(a).
The case law fully supports this conclusion. Thus, the
Supreme Court has held that a regulatory subpoena duces tecum,
provided for by statute, may be used to investigate whether the
statute "covers" the recipient of the subpoena at all.
Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186,
214-18 (1946).9 In Oklahoma Press, the Court
held that statutory language similar to that contained in the
ACPA, and lacking any "express condition requiring showing of
coverage,"10 clearly authorized the
administrative agency to issue subpoenas seeking "the production
-------------------------------------------------------------------------------- Page 21
of specified records to determine whether [the recipients] were
violating the Fair Labor Standards Act, including records
relating to coverage." Id. at 189, 200. Courts in this Circuit
have applied the Oklahoma Press doctrine to regulatory
subpoenas, FTC v. Ernstthal, 607 F.2d 488, 490 (D.C. Cir. 1979)
(ordinarily, a party may not challenge an agency's jurisdiction
in subpoena enforcement proceeding), and, most importantly, to
Civil Investigative Demands. Australia/Eastern U.S.A. Shipping
Conference v. United States, 1982-1 Tr. Cas. (CCH) ¶64,721
(D.D.C. 1981) (rejecting challenge to CID requests alleged to
relate to activities outside the Antitrust Division's
jurisdiction).11
Under these precedents, a party may not raise a
jurisdictional challenge to a regulatory subpoena except in
extraordinary circumstances, and any party attempting to make
such a challenge bears an extremely heavy burden. In Oklahoma
Press, the Court rejected the proposition that the agency
must show "probable cause, that is, probability in fact, of
coverage" before it could be entitled to the records sought,
concluding that the agency's
-------------------------------------------------------------------------------- Page 22
investigative function, in searching out
violations with a view to securing
enforcement of the Act, is essentially the
same as the grand jury's, or the court's in
issuing . . . orders for discovery of
evidence, and is governed by the same
limitations. These are that [it] shall not
act arbitrarily or in excess of [its]
statutory authority, but this does not mean
that [its] inquiry must be "limited . . . by
forecasts of the probable result of the
investigation . . ."

Id. at 216 (quoting Blair, 250 U.S. at 282) (footnote omitted).
Thus, the strong presumption of authority to investigate can be
overcome only where the investigation is arbitrary, cf.
Chattanooga Pharm. Ass'n v. United States Dep't of Justice, 358
F.2d 864, 865 (6th Cir. 1966) (setting CID aside based on
uncontradicted allegations that CID was issued to harass and
intimidate the recipient), or where settled law and
uncontroverted facts show that the agency or department clearly
lacks jurisdiction. Ernstthal, 607 F.2d at 490 (where the agency
"does not plainly lack jurisdiction, and the jurisdictional
question turns on issues of fact, the agency is not obliged to
prove its jurisdiction in a subpoena enforcement proceeding . .
."); Australia/Eastern, 1982-1 Tr. Cas. (CCH) ¶64,721, p.74,062
("where the question is not absolutely determined by authority,
and facts surrounding the question of the coverage of the
antitrust laws are unresolved, the Antitrust Division is
authorized by the ACPA to fully investigate those facts") (citing
Amateur Softball, 467 F.2d 312, 316 (10th Cir. 1972)). As Judge
Greene concluded in Australia/Eastern:
-------------------------------------------------------------------------------- Page 23
To summarize the status of
jurisdictional challenges to CIDs under the
ACPA, there is no statutory language directly
stating that such challenges are appropriate,
or should be treated differently from similar
challenges to the subpoenas of other
agencies. The House Report does reflect that
the limitation by definition of the ACPA to
antitrust violations permits challenges based
upon clear exemptions from the antitrust laws.
The case law on the matter is scant, but
appears to allow such challenges only when no
factual development is required to determine
the issue. In conclusion, there appears
to be little, if any, difference between the
standards that have traditionally been
applied in subpoena enforcement cases . . .
and those that should be applied to CIDs
under the ACPA.

Id. at 74,062-63 (emphasis added).
The Antitrust Division's investigation cannot be
regarded as arbitrary. The formation and operation of license
fee collecting societies raise substantial antitrust issues, see
Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441
U.S. 1 (1979),12 as does the formation of a
programming joint -------------------------------------------------------------------------------- Page 24
venture in which the major suppliers of
programming participate. See United States v. Columbia Pictures
Industries, Inc., 507 F. Supp. 412, 429-30 (S.D.N.Y. 1980)
(programming joint venture including major movie studios
condemned as per se illegal), aff'd mem., 659 F.2d 1963 (2d Cir.
1981). The European Commission has issued a Statement of
Objections suggesting that some of the majors' foreign activity
is anticompetitive. Under these circumstances, it is hardly
surprising or unreasonable for the United States to undertake its
own investigation of these potential antitrust violations and
their effects on U.S. domestic and export commerce.
Nor can the majors reasonably claim that the law or the
facts compel a finding that the United States clearly lacks
jurisdiction. Foreign activities may be subject to U.S.
antitrust laws in a variety of circumstances, see 15 U.S.C. §6a
(conduct having a direct, substantial and reasonably foreseeable
effect on U.S. domestic or export commerce supports Sherman Act
jurisdiction), and any determination of what constitutes an
appropriate jurisdiction-triggering "effect" on export or
domestic commerce is inherently fact-specific. Cf. Ernstthal,
607 F.2d at 491 (where jurisdiction rested on factual issue of
classification, regulatory subpoena would be enforced).
Accordingly, and given that the majors have entered into a series
of collaborative arrangements in the United States and abroad,
any further inquiry into ultimate jurisdiction is unnecessary at
this stage, and the Court should grant the petition without
-------------------------------------------------------------------------------- Page 25
hesitation.
II. Available Information Suggests Several
Grounds on Which the Majors' Conduct May
Be Subject to the Sherman Act.

We do not believe that it is necessary for the court to
consider the issue of subject-matter jurisdiction over various
violations that may be uncovered in this investigation in order
to grant the instant petition. Nor do we believe that it is
necessary or appropriate at this stage of the investigation to
discuss in detail all possible theories related to jurisdiction.
The majors, however, have asserted that no reasonable basis
exists for the exercise of jurisdiction in this case. In fact,
there is such a basis.
The CIDs in question were issued to investigate
possible violations of Sections 1 and 2 of the Sherman Act, both
of which apply to "commerce among the several states, or with
foreign nations." 15 U.S.C. §§1,2. It has long been clear that
anticompetitive behavior is not immune from U.S. antitrust
scrutiny simply because it occurs overseas, so long as it has
substantial effects on American commerce. Hartford Fire Ins.
Co. v. California, 113 S.Ct. 2891, 2909 (1993); United States v.
Aluminum Co. of Am., 148 F.2d 416, 444 (2d Cir. 1945).13
-------------------------------------------------------------------------------- Page 26
The Foreign Trade Antitrust Improvements Act of 1982
clarified the case law relating to "foreign commerce"
jurisdiction under the Sherman Act and provides in pertinent
part:
Sections 1 through 7 of [the Sherman
Act] shall not apply to conduct involving
trade or commerce (other than import trade or
import commerce) with foreign nations unless
--


(1) such conduct has a direct, substantial
and reasonably foreseeable effect--


(A) on trade or commerce which is
not trade or commerce with foreign
nations . . .; or

(B) on export trade or export
commerce with foreign nations, of a
person engaged in such trade or
commerce in the United States
. . . .

15 U.S.C. § 6a.
Here, there is reason to believe that the major
American and foreign music companies, through various
associations, ventures and agreements, may have formed an
international conspiracy designed to dominate, discipline,
eliminate or extract monopoly prices from music programmers. As
set forth above, the majors have (1) created a web of "copyright
-------------------------------------------------------------------------------- Page 27
societies" that collectively negotiate licensing fees and thus
may have fixed the price of the intellectual property rights to
pre-recorded music and music videos; (2) formed an international
network of digital radio and music video programming joint
ventures which may operate to raise the price of music videos
supplied to all programmers or tend to eliminate competition in
the music programming market; and (3) entered into collateral
agreements supportive of an international price-fixing scheme.
Depending on the exact nature and characteristics of these
arrangements, these collaborative endeavors may support
jurisdiction in any of several ways.14
A. The United States has Jurisdiction Over
an International Conspiracy Having
Domestic Members, Components and
Effects.

Where an antitrust conspiracy affecting American
commerce is composed of domestic and foreign components, Sherman
Act jurisdiction applies to the entire conspiracy so long as the
domestic effects are direct, substantial and reasonably
foreseeable. 15 U.S.C. §6a; Continental Ore Co. v. Union Carbide
& Carbon Corp., 370 U.S. 690 (1962). In Continental Ore,
cited with approval in the FTAIA's legislative history, the
Supreme -------------------------------------------------------------------------------- Page 28
Court held that the trial court erred in excluding evidence
relating to the Canadian components of a conspiracy
having U.S. members, components and effects. Id. at 702-07.15
Just as important to this investigation--which includes various
transactions that may be part of a single unlawful scheme--the
unanimous opinion in Continental Ore held that courts should not
"tightly compartmentaliz[e]" the various factual components of
an alleged antitrust conspiracy but should give plaintiffs "the
full benefit of their proof" and judge the character and effect
of the conspiracy "by looking at it as a whole." Id. at 699.16 Concluding that the appellate
court erred in examining the
individual parts of the defendants' conduct seriatim, id. at 698-
99, the Court remanded for "a new trial of the entire case in
view of the close interconnection between the Canadian and
domestic issues . . . ." Id. at 708.
Here, the available information, viewed as a whole and
in light of the fact that the investigation is at an early stage,
suggests that the majors have entered into a conspiracy that
includes U.S. members, components and effects. With respect to
-------------------------------------------------------------------------------- Page 29
participation, Time Warner is an American company and, in
addition, appears to be the driving force behind many of the
collaborative associations and agreements under consideration.
Other CID recipients, though subsidiaries of foreign parents, are
well-known and substantial American companies. It is believed
that, by themselves, the American CID recipients and their
subsidiaries are collectively responsible for the majority of
records and music videos heard and seen throughout the world.
Many of the agreements and decisions relating to foreign
activities were likely negotiated and made in the United States,
though this cannot be confirmed without access to all of the
relevant documents.
More importantly, the majors entered into two American
music programming joint ventures. While their stated purpose is
to provide audio and video music programming to United States
audiences, they appear to be "closely interconnected" with the
majors' foreign collaborative activities. See Continental Ore,
370 U.S. at 708. As with the copyright societies, for example,
one underlying intent and effect of the U.S. joint ventures
appears to be to raise the price of music and music videos
provided to all U.S. programmers.17
Moreover, to the extent that -------------------------------------------------------------------------------- Page 30
the conspiracy is intended to dominate high-technology
distribution systems, and eventually retail distribution of tapes
and CDs through home-shopping services provided through the same
systems, the domestic joint ventures may share that purpose and
effect with the foreign joint ventures. Both U.S. joint
ventures, moreover, share common ownership, timing of creation
and subject-matter with their
foreign counterpart ventures. See Adam Sandler, They Want Their
MTV, Daily Variety, Jan. 21, 1994, at 7 ("[t]he first phase of
the launch of the new channel, according to sources, would be the
creation of several foreign music channels . . .").18
If an unlawful conspiracy exists, therefore, purely American
activities form a significant and inseparable segment of the
scheme. An investigation directed at establishing any such
connection is clearly consistent with the jurisdictional approach
of Continental Ore.






-------------------------------------------------------------------------------- Page 31


B. The United States has Jurisdiction Over
Foreign Conduct Having Direct,
Substantial and Foreseeable Effects on
U.S. Domestic and Export Commerce.

1. Domestic Effects.

The activities of the foreign "copyright societies", in
the context of this industry, may have direct, substantial and
reasonably foreseeable effects on domestic commerce under the
FTAIA. For example, a horizontal price fix of music video rights
licensed to MTV-Latino would affect domestic commerce, since MTV-
Latino's signal encompasses part of the United States. Moreover,
the collective licensing scheme in foreign countries may
constitute a horizontal agreement among competitors not to
provide world-wide licenses to U.S. programmers.19
The effect of such a collective refusal to deal may be (1) to
support an agreement among the majors not to pay for airplay on
programmers' networks in the United States or (2) to eventually
coerce U.S. programmers into paying higher-than-competitive fees
for any such world-wide licenses, which by definition encompass
programmers' foreign and U.S. programming inputs.
Further, the collective licensing arrangement by VPL
and other copyright societies requires programmers to pay a
percentage of their total revenue, regardless of the percentage
of programming actually devoted to the licensed music videos.
-------------------------------------------------------------------------------- Page 32
This licensing scheme may have the effect of decreasing
programmers' revenues for original programming as well as video
programming. Moreover, in light of the majors' antipathy to such
original programming, it is possible that this was not only an
effect, but a principal intent underlying the total-revenue
structure of the collective licensing scheme.
Accordingly, the United States is seeking to determine
the extent to which these arrangements directly affect commerce
in the United States.
2. The Majors' Foreign Activity Has Direct,
Substantial and Reasonably Foreseeable
Effects on U.S. Export Commerce.

In addition to the numerous domestic effects set forth
above, the majors' foreign conduct directly, substantially and
foreseeably affects the export trade of American music
programmers.
a. The Relevant Exports.
Although exports and imports of services are less
tangible than commodities hauled to a loading dock, they are
entitled to the same treatment for jurisdictional purposes. See,
e.g., Laker Airways, 731 F.2d 909 (D.C. Cir. 1984); Pacific
Seafarers, Inc. v. Pacific Far East Line, Inc., 404 F.2d 804
(D.C. Cir. 196, cert. denied, 393 U.S. 1093 (1969). Each of
the U.S. programming exporters has developed a complex, unique,
consistent and recognizable type of service in the United States,
which the company then brings to market in foreign countries.
The total service package generally includes substantial numbers
-------------------------------------------------------------------------------- Page 33
of U.S.-produced music videos, trade and service marks, other
intellectual property rights and know-how, original programming,
interstitial material, art and formats--all developed in the
United States. Foreign consumers, businesses and governments
typically identify these services as American in origin.
Indeed, several of the music programmers package each day's
programming in the United States, from which it is beamed
unchanged via satellite uplinks to foreign consumers. In other
cases, the American company exports its service through a
foreign subsidiary that tailors the service to the local culture.
In addition, programmers like Viacom exports to that subsidiary a
substantial quantity of U.S.-produced original programming.20
These transfers, whether effectuated by electromagnetic wave
transmission, a foreign branch or subsidiary, or physical
delivery clearly constitute export commerce under the FTAIA.21
-------------------------------------------------------------------------------- Page 34
b. Effects on Export Commerce.
Effects on these U.S. exports may well prove to be
direct, substantial and reasonably foreseeable. First, the
investigation may show that the collective licensing scheme
raises costs to the point where some programmers will find it
unprofitable to export their programming at all. Whether they
exit, choose not to enter, or choose not to expand to the next
country, region or cable system, the foreclosure effect on
exports is substantial. Second, for programmers like Viacom, the
price fix may have the possibly intended effect of eliminating or
reducing original programming exported from the United States so
that airplay of the majors' music videos is increased. Third,
the potential effects of the various overseas joint ventures on
exports by U.S. programmers are severe. To the extent that the
majors restrict programmer access to the rights to music and
music videos played on the channel, the ability to export music
programming necessarily is impeded. Likewise, to the extent that
such ventures are formed as a means of coercing other programmers
into acquiescing to the price fixed by the copyright societies,
they contribute to the adverse effects described above.
In short, the available facts indicate numerous ways in
which U.S. jurisdiction based on anticompetitive harm to domestic
-------------------------------------------------------------------------------- Page 35
and export commerce may result from the majors' collaborative
efforts overseas.
III. The United States is Entitled to the
Information and Materials Requested in
the CID Because Evidence of the Majors'
Activity Overseas is Relevant to Show
the Character and Purpose of the Majors'
Domestic Conduct.

Even if the potential impact of the majors' foreign
activities on domestic and export commerce would not, under any
theory or any set of circumstances, be direct and
substantial enough to confer jurisdiction, the United States is
entitled to discover U.S.-located information and materials
relating to the foreign copyright societies and joint ventures
because such evidence is highly relevant to the intent, nature
and effects of the two domestic joint ventures.
If this matter proceeds to trial, such evidence will be
admissible pursuant to Rule 404(b) of the Federal Rules of
Evidence (evidence of other crimes, wrongs or acts admissible to
prove, inter alia, motive, intent, plan and knowledge). Clearly,
evidence related to the foreign copyright societies and joint
ventures is relevant to the issues of intent, motive and
knowledge with respect to the majors' contemporaneous domestic
joint ventures. See Rothberg v. Rosenbloom, 771 F.2d 818, 823
(3d Cir. 1985) (trial court properly admitted evidence of four
joint ventures not at issue in the case to show the "nature and
purposes" of two other joint ventures alleged to have violated
-------------------------------------------------------------------------------- Page 36
federal securities laws).22
Rule 404(b) codified, inter alia, "the established
judicial rule of evidence that testimony of prior or subsequent
transactions, which for some reason are barred from forming the
basis for a suit, may nevertheless be introduced if it tends
reasonably to show the purpose and character of the particular
transactions under scrutiny." United Mine Workers of Am. v.
Pennington, 381 U.S. 657, 670-71 n.3 (1965) (internal
quotations, citations omitted); Local Lodge No. 1424, Int'l Ass'n
of Machinists, AFL-CIO v. NLRB, 264 F.2d 575, 580 (D.C. Cir.
1959)(evidence of acts outside the period received to "illuminate
and explain events within the period"), rev'd on other grounds,
362 U.S. 411 (1960). This rule applies whether or not the
conduct in question was legal, Pennington, 381 U.S. at 670-71
-------------------------------------------------------------------------------- Page 37
n.3, or outside the subject-matter jurisdiction of the court.
See, e.g., Standard Oil Co. of New Jersey v. United States, 221
U.S. 1, 46-47 (1911) (activity prior to passage of the Sherman
Act admitted to show nature of subsequent conduct); Whittaker
Corp. v. Execuair Corp., 736 F.2d 1341, 1347 (9th Cir. 1984)
("Evidence of events or transactions which cannot be the subject
of a suit by virtue of a statute of limitations bar may be
introduced to show the nature and character of transactions under
scrutiny or to establish a course of conduct").
CONCLUSION
The United States is entitled to the documents and
interrogatory answers sought by its CIDs because it is authorized
to investigate the factual basis for a potential antitrust claim,
because U.S. courts probably have jurisdiction to hear such a
claim, and because the information is otherwise relevant to
understanding, and admissible to establish, the full nature and
intent of the majors' domestic activities over which U.S.
jurisdiction is undisputed.
WHEREFORE, the United States requests that the instant
petition be granted.
Respectfully submitted,
ANNE K. BINGAMAN ___________________________
Assistant Attorney General Robert P. Faulkner (430163)

ROBERT E. LITAN ___________________________
Deputy Assistant Attorney General Minaksi Bhatt (43444

MARK SCHECHTER ___________________________
Deputy Director of Operations Stacy S. Nelson

-------------------------------------------------------------------------------- Page 38
Attorneys
U.S. Department of Justice
Antitrust Division
Civil Task Force
1401 H. Street, N.W.
Suite 3700
Washington, DC 20005
Telephone: (202) 514-8398
--------------------------------------------------------------------------------FOOTNOTES
1
Warner accounts for 21.6 percent of the U.S. record
market.
2
Sony, a U.S. subsidiary of Sony Corporation of Japan,
controls 16.1 percent of the U.S. record market. PolyGram
Holding, Inc., a U.S. subsidiary of PolyGram N.V. of The
Netherlands, controls 11.3 percent of the U.S. music market. EMI
Music, a U.S. subsidiary of Thorn EMI Plc. of the United Kingdom,
controls 12 percent of the U.S. music market. BMG, a U.S.
subsidiary of Bertelsmann AG of Germany, controls 13.9 percent of
the U.S. record market. MCA, Inc., a U.S. subsidiary of
Matsushita Electric Industrial Company, Ltd. of Japan, accounts
for 11.4 percent of the U.S. record market.
3
In the industry, "interstitial material" refers to
short segments of original programming such as short promotional
ads, lead-ins, public service announcements, and computer-
generated information identifying a music video for the viewer.
4
At least in the case of Europe, the copyright societies
appear specifically designed to avoid the "American" model of
music video licensing and to target American programming services
that attempt to follow that model. For example, according to its
Consultant Director, VPL was formed in 1984 for the following
purpose:

Europe's record companies feared that MTV
type operations were being planned for Europe
and that the UK record industry would allow
these operations to get access to the videos
of certain American-based companies on a
free-of-charge basis and then, for
promotional purposes, the rest of the
industry would be bound also to license their
videos to these operations on a free-of-charge basis.
This was the experience in the early days of MTV.

To prevent this happening, the UK industry
formed VPL . . . to negotiate a blanket
license . . . .

Roger Drage, Opinion: Business Growth v Rights, International
Media Law 50 (1985). In 1986, when MTV entered the European
market, it attempted to negotiate individual licenses, but these
attempts were rebuffed. Eventually it signed a blanket license
agreement of the type described in the text. In April 1991,
after Viacom had begun more vigorous attempts to negotiate
individual licenses with the majors, the majors-dominated VPL
Board adopted and enforced a resolution requiring member
companies to assign all "performing" and "dubbing rights" rights
to VPL.
5
Each of the license agreements between DCR and the
majors contains a most-favored-nation clause which, in operation,
guarantees that the license fees will remain uniform for each
major. In light of the absence of a performance right in the
United States, it is unclear what rights are "licensed" under
these agreements.
6
Letters requesting voluntary production of information
and documents were sent to foreign parents.
7
The majors have also raised a number of "boilerplate"
objections, including claims of burdensomeness and ambiguity.
The United States anticipates that such objections can be
resolved through negotiation.
8
Some documents relating to Latin American activities
have been produced, apparently in recognition that the MTV-Latino
signal encompasses some parts of the United States. EMI, while
maintaining its jurisdictional objection, has produced some
information and documents relating to foreign joint ventures.
9
Similarly, it has long been recognized that "the grand
jury ha[s] authority and jurisdiction to investigate the facts in
order to determine the question whether the facts show a case
within [its] jurisdiction." Blair v. United States, 250 U.S.
273, 282-83 (1919); accord United States v. Partin, 552 F.2d 621,
630 (5th Cir. 1977). The simple yet compelling rationale for
this holding is that "the identity of the offender, and the
precise nature of the offense, if there be one, normally are
developed at the conclusion of the grand jury's labors, not at
the beginning." Blair, 250 U.S. at 282.
10
Section 11(a) of the Fair Labor Standards Act provided
at that time for the Administrator of the Wage and Hour Division
of the U.S. Department of Labor to inspect places and documents
"`and investigate such facts, conditions, practices, or matters
as he may deem necessary or appropriate to determine whether any
person has violated any provision of this Act, or which may aid
in the enforcement of the provisions of this Act.'" Oklahoma
Press, 327 U.S. at 199 (emphasis added) (quoting 29 U.S.C. §
211(a)).
11
See also Associated Container Transp. (Australia), Ltd.
v. United States, 705 F.2d 53, 60 (2d Cir. 1983) (Antitrust
Division CID similar to agency subpoena: "[o]nly when permitted
to utilize its investigating authority will the Division be able
to exercise its expertise to determine . . . whether the Noerr-
Pennington doctrine immunizes appellees' conduct"); Amateur
Softball Ass'n of America v. United States, 467 F.2d 312 (10th
Cir. 1972)(permitting Antitrust Division to use CID to fully
investigate facts of conduct alleged by recipients to fall
outside the Division's subject-matter jurisdiction).
12
Although the investigation is not complete, the
"copyright societies" at issue here appear to bear little
relationship to the types of collective licensing organizations
judged under the antitrust "rule of reason" in Broadcast Music.
The American Society of Composers, Authors and Publishers
("ASCAP") and Broadcast Music, Inc. ("BMI"), are organizations
representing tens of thousands of individual composers and other
holders of copyrights in musical compositions. Copyright owners
grant ASCAP and BMI the non-exclusive right to license their
musical compositions.

In contrast, the copyright societies under
consideration have fewer members, are controlled by a handful of
music companies and require, as a condition of membership, that
members assign or exclusively license all performance and dubbing
rights to the organization, thus preventing programmers from
negotiating directly with a music company.
13
"Foreign commerce" jurisdiction has often been directed
at the collusive anticompetitive behavior of international
cartels, see Zenith Radio Corp. v. Hazeltine Research, Inc., 395
U.S. 100, 114-15 (1969); Laker Airways, Ltd. v. Sabena, Belgian
World Airlines, 731 F.2d 909, 916-17 (D.C. Cir. 1984); Daishowa,
Int'l v. North Coast Export Co., 1982-2 Tr. Cas. (CCH) ¶ 64,774,
p. 71,786 (N.D. Cal. 1982), including their control over
intellectual property rights. Zenith, 395 U.S. at 114-15; United
States v. Westinghouse Elec. Corp., 471 F. Supp. 532, 538 (N.D.
Cal. 197, aff'd in part, rev'd in part, 648 F.2d 642 (9th Cir.
1981), see also United States v. Imperial Chem. Indus., Ltd., 100
F. Supp. 504, 517 (S.D.N.Y. 1951); United States v. General Elec.
Co., 82 F. Supp. 753, 798 (D.N.J. 1949); United States v. Timken
Roller Bearing Co., 83 F. Supp. 284, 290 (N.D. Ohio 1949); United
States v. General Elec. Co., 80 F. Supp. 989, 1004 (S.D.N.Y.
194.
14
Considerations of comity may also bear on the
Department of Justice's decision regarding the nature and extent
of any action it might bring at the conclusion of its
investigation. See Antitrust Enforcement Guidelines for
International Operations 1994, Draft for Public Comment, 59 Fed.
Reg. 52,810, 52,818-19 (October 13, 1994). The evidence that
bears on the jurisdictional and substantive antitrust issues in
the investigation will also be relevant to the Department's
consideration of comity factors.
15
In so holding, the Court rejected arguments that the
defendants' foreign conduct was immune because it occurred
outside the United States, because there was some foreign
government involvement, and because the conduct was legal under
foreign law. Id. at 704-07.
16
Accord Avis Rent-A-Car System v. Hertz Corp., 782 F.2d
381, 385 (2d Cir. 1986) (court must look at "entire mosaic");
Regency Oldsmobile, Inc. v. General Motors Corp., 723 F. Supp.
250, 258 (D.N.J. 1989) ("the Court must strive to see the
constellation from the stars").
17
The licensing agreements between DCR and, respectively,
Warner, Sony and EMI contain identical language calling for a
uniform license fee (2 percent of revenue) supported by most
favored nations clauses. An original draft of the U.S. music
video joint venture partnership agreement provided for the
payment of licensing fees identical to the 20 percent figure
routinely demanded by the majors-dominated copyright societies
abroad. Even now, the U.S. music video joint venture channel is
seen as a price-setting "example" to other programmers. See
Martin Peers, Bertelsmann Joins Rival MTV Channel, New York Post,
June 29,

WOW. I have time and all, but WOW.

If you take the time to read through this (I was going to spare you), you'll see that except for a few instances which can easily be replaced by a more current example only because the parties in question saw their businesses evaporated by the RIAA over the past 10 years.

Nothing has really changed. Nothing at all.

Has the law changed? Do these same actions not still constitute antitrust? Especially since the main points of the original allegations have proven to be fact, not conjecture?

Other than the fact that the FBI now works FOR the RIAA.

Gonna have to warm up the ol' ezoffice text reader for this one...

(even still, good work in posting this leflaw, needed done!)

Shmoo

So...the RIAA is bad, right ?
~CW

excellent article by the way George!

Since they are foreign companies the RIAA should file as a Foreign Agent

This post sure does like the top of the page....

It's a time warp. I didn't even write it yet.

Jack Valenti, head of the Motion Picture Association of America, has suggested that consumers have no legitimate need for such software, telling The Associated Press in November, "If you buy a DVD you have a copy. If you want a backup copy you buy another one."

(from CNN article about ruling against 321 Studios)

WTF?!?!?! I thought we had the right to make a copy of CDs/VHS/DVD etc? Valenti is basically saying that by buying a DVD, we are buying a "copy" Well duh. I certainly did not pay for the orignal film used. Isn't that the point of any media? But he is basically saying that if I scratch or otherwise damage my DVD, well then I can just go on down to the nearest store and shell out another $20 for something I already owned! Why, Mr. Valenti, am I not allowed to make a copy to protect my investment? That quote is the most stupid thing I've ever heard.

I love in-fighting! Eminem is suing Apple because they use one his songs in a commercial without his permission. Hee hee hee!

Correct me if I am wrong, but wasn't Valenti also the same moron who sayed that skipping over commercials should be considered a crime?

Shmoo

Valenti was reportedly Lady Bird Johnson's boyfriend. Check it out.

Foreign companys are used to getting their way. Ever buy a diamond? DeBeers controls the entire market. They even paid off congressman in the 30s to make the only place known to have diamonds that at the time in the US a National Park. Ever been to Arkansas?
History is full of such cases, the Swiss screwing the relatives of the victims of the Nazis, among others.
Why should this time be any different?

Too bad this got chased off the news by BushII backing the marrage ammendment. This guy will do anything to get reelected.

RIAA =

Sony
BMG
VIVENDI
EMI


Americans? BULLSHIT

THEY DON'T REPRESENT AMERICANS.

Hack Valenti probably has aluminum foil over his windows during the daytime.

No one yet has reported seeing his reflection in a mirror...

How he walks in sunlight without bursting into flames is a mystery....

Wear garlic and crosses if you ever go to a hearing with Hack !

~Word to the Wise....

"Are the labels still foreign owned?

If so, then they have no authority to come after US citizens, do they?"

This is an excellent point. The labels can't have their cake and eat it, too. Either they are subject to U.S. law or they aren't. If they aren't, they shouldn't be allowed to use our court system to their advantage, or even sell their "product" here.