CD Makers Aim to Be Small Targets for Trustbusters

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Microsoft may be fighting the government's anti-monopoly men to the last bullet, but a group of similarly accused corporate giants have decided to raise the white flag. The result: That coveted CD of Britney Spears' warblings will now be $2 to $5 cheaper at a music store near you. The music biz's Big Five — Sony, Bertelsmann, EMI, Universal and Time Warner (corporate cousin to this web site) — which control 85 percent of the $15 billion CD market, settled with the FTC Wednesday on charges that they've been leaning for years on music retailers to fix CD prices by threatening to withhold promotional budgets from stores that don't adhere to a so-called "minimum advertised price" (MAP). The three-year price-fixing binge, according to FTC chairman Robert Pitofsky, cost consumers a total of $480 million. The MAP programs will now cease, and teen-idol fans will now have more money in their piggy banks.

Maybe the boom-box behemoths are feeling generous after putting free-music clearinghouse on the legal ropes Wednesday. But there's another good reason for these guys to play nice with the feds. "This is a time when there are not only a lot of big corporate mergers, but also a reemergence of an aggressive application of antitrust law in Washington," says TIME legal correspondent Adam Cohen. "This case, just like Microsoft, probably wouldn't have been brought five years ago." And with Time Warner not only looking to merge its music division with that of EMI but also hoping the FTC will approve its swallowing by AOL, a no-fuss settlement is an excellent way to signal to the trustbusters that it's a gentle giant. "In this climate, it doesn't want to look like it's using its size or connections unfairly," says Cohen. Click here to forward this story to Bill Gates.