Warner Music In More Trouble

The Department Of Justice Launches Anti-Trust Probe Into "Total Music"

February 8. 2008

Warner Bros is not having a good month. Not only is its CEO Edgar Bronfman Jr. under formal investigation in France for insider trading and a massive stock buyback, the Department Of Justice in America has launched a probe into Total Music, a web site that the company is apart of along with Sony BMG and Universal. Bronfman also has ties to Universal.

Total Music was supposed to be the rival of Apple's iTunes, which launched the iPod media player and 99 cent song downloads site.

"Warner Music chief accused of insider trading"

Warner Music Group CEO Edgar Bronfman Jr. faces preliminary charges of insider trading as part of a probe into alleged wrongdoing at French media and telecom group Vivendi Universal, French judicial officials said Thursday. He is a former vice chairman of Vivendi.

In another development, Universal Music Group, the world's largest record company, has been asked by the U.S. Justice Department about its proposal to form a digital music service with competitors, a person familiar with the matter said. Universal is a unit of Vivendi. http://www.chron.com

When an entire industry colludes to set terms and pricing, the Department of Justice tends to get interested for antitrust reasons.

Apparently, that is what is happening. According to the Music Ally newsletter, the DoJ has served Universal and Sony/BMG with notices to find out more about Total Music, and has also requested information from Warner Music Group and EMI (see update below). http://blog.wired.com