US follows EU online music inquiry

The US competition watchdog is investigating the online music industry, following concerns that the five biggest record labels will come to dominate the web market.

Recently the EU announced that it would also be investigating the major players for similar reasons. Companies potentially in the dock include Music Net (AOL Time Warner, RealNetworks, EMI and Bertelsmann) and Pressplay (Vivendi and Sony) – both are due to begin offering services next month.

Although the US department of Justice will not comment on ongoing enquiries, it is thought that the investigation concerns how the record labels and their joint ventures are using copyright laws and licensing agreements to control the market for online music. Music Net and Pressplay declined to comment on the inquiry.

The discovery that millions of consumers were using Napster for free has prompted major recording companies to get to grips with online music distribution, but the technology is sure to prove a headache. Piracy prevention across several different consumer devices is tricky, and users are unlikely to pay for a service that does not come up to expectations.

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