Business Law: Principles for Today's Commercial Environment 3rd Edition by Marianne Moody Jennings, David Twomey, Marianne Jennings

Exercise 3

The major record companies settled an antitrust suit brought by 40 state attorneys general against them for alleged price-fixing in the sale of CDs. The record companies agreed to pay $67.4 million to consumers who purchased CDs during the period from 1995 to 2000. The consent decree stipulated that the record companies had required retailers that accepted subsidies from record companies for advertising CDs not to advertise CDs for sale at a price agreed upon in advance. The record companies said that the policy helped keep independent retailers in business because they could not afford to price at Wal-Mart levels. Wal- Mart always advertised CDs for sale at a price below the floor agreed to by the subsidized independent retailers and the record companies. The record companies did not admit any wrongdoing and, in addition to agreeing to the $67.4 million, also agreed to provide 5.5 million CDs to libraries, schools, and nonprofit organizations (worth $75.7 million). What antitrust violation were the attorneys general alleging Is a minimum price a violation of antitrust laws