U.S. drops probe of Pressplay, MusicNet

The U.S. Department of Justice (DOJ) has dropped an antitrust investigation of two online music services backed by major record labels after concluding the services have not harmed consumers or competition.

The department has found no evidence that Pressplay and MusicNet, joint ventures launched in 2001 to offer digital music online for a price, have harmed competition or consumers of digital music, according to a statement attributed to Assistant Attorney General R. Hewitt Pate that was send to the media on Tuesday.

Consumers have an increasing variety of places to purchase digital music and are using those services in growing numbers, the DOJ said. The labels did not illegally coordinate the terms on which they would license their music to third-party services, and the expansion of the online music market shows that the labels did not stifle the industry to protect their competitive positions, it said. The department launched its investigation in 2001.

The DOJ also cited Sony Music Entertainment and Universal Music Group's sales of their controlling interests in Pressplay as helping to ease its concern over the arrangements. Software vendor Roxio bought Pressplay in May in a cash and stock deal valued at about $39.5 million. MusicNet is a joint venture of Bertelsmann, Time Warner, EMI Group and RealNetworks.