The Legal Environment of Business: Text and Cases (MindTap Course List)
10th Edition
ISBN: 9781305967304
Author: Frank B. Cross, Roger LeRoy Miller
Publisher: Cengage Learning
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Chapter 27, Problem 4BCP
Summary Introduction
Case summary:Company EI, company BGM, company UMR, and company WMG together licensed, produced and distributed 80 percent of the digital music that is sold in the US market. They formed a company MN to vend music to the online services which sold songs to the listeners/consumers. Company MN needed all of the useful services to sell songs for the similar price and subject to the same kind of restriction. Music digitization became cheaper but company MN decided to keep its price same.
To find: The violation of the antitrust law by MN.
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Price Fixing. Together, EMI, Sony BMG MusicEntertainment, Universal Music Group Recordings, Inc., andWarner Music Group Corp. produced, licensed, and distributed 80 percent 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 allof the services to sell the songs at the same price and subject tothe same restrictions. Digitization of music became cheaper,but MusicNet did not change its prices. Did MusicNet violatethe antitrust laws? Explain. [Starr v. Sony BMG Music Entertainment, 592 F.3d 314 (2d Cir. 2010)] (See Section 1 of theSherman Act.)
In August 2014 online retailer, Amazon, paid $970m to buy video-gaming service Twitch. Formerly known as Twitch.tv, Twitch enables users to watch other people play video games online. Amazon's acquisition of Twitch was in response to the emergence of YouTube and Netflix. The purchase of Twitch enabled Amazon to reach committed gamers, and was seen by many as a natural extension of Amazon's existing offering. Amazon's Prime service already allows subscribers to stream television shows and movies. Why it horizontal integration?
A computer manufacturer terminating an electronic store retailer's contract to sell the manufacturer's computers because the electronic store sold the manufacturer's computers at a price which the manufacturer deemed too low is:
a per se violation of the Sherman Act.
resale price maintenance subject to a rule of reason review.
price fixing.
none of the above.
Chapter 27 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
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